Sweetcrude August 2016 by Sweetcrude reports

Investors, experts optimistic of large oil discovery in Chad Basin P/09

Nigeria on track to end gas flaring by 2020 - Ladan

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A Review Of The Nigerian Energy Industry VOL 03 N0. 39

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Govt to draw funds from JV firms for Ogoni clean up

he Nigerian government says it will draw resources from joint venture companies, JVCs, as part of its counterpart funding to begin the long due clean up of Ogoni land. This comes as President Muhammadu Buhari inaugurated a Governing Council and a Board of Trustees, BoT, to manage the Trust Fund for the Hydrocarbon Pollution Remediation Project, HYPREP, which is responsible for the Ogoni clean up, as recommended by the United Nation’s Environment Programme, UNEP, report two months after the groundbreaking ceremony to commence the process. “The funding, bulk of which is going to be contributed by the SPDC JV and for clarity, the SPDC JV has Shell, Total, Agip, and NNPC. So, we

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Militants

Nigerian govt, militants in game of cat & mouse Urgent resolution required to bail out Budget 2016 Oil above benchmark price Output remains below expectation

Contents

2016 August, SweetcrudeReports

Editor’s note

he Nigerian economy remains in the doldrums even as oil prices have risen above its earlier sub-$30 low and the $38 per barrel benchmark price projected in the nation's 2016 budget. Prices are expected to move higher, going by the prediction of the Organisation of the Petroleum Exporting Countries, OPEC, president and Qatar's Energy Minister, Mohammed Bin Saleh Al-Sada. But, the Nigerian economy, which is dependent almost entirely on crude oil sales, would not likely see any improvement. Renewed attacks on oil installations by militants in the Niger Delta have denied the nation the possibility of pumping 2.2 million barrels of crude oil per day, which is the budget estimate, ensuring that revenue to fund the budget remains meagre. The situation is not helped by the cat and mouse game between the government and the militants over talks that would bring a cease fire by the militants and return oil production to normalcy. So, even if oil prices were to rise above the $53 per barrel high achieved in June, Nigeria is not expected to benefit maximally from the development given her abysmally low output. It is not surprising that the National Bureau of Statistics reports in this edition of your favourite Newspaper that Nigeria’s oil sector growth slowed by 1.89 percent in the first quarter of 2016, due to the reduction in the country’s daily production occasioned by pipeline vandalism attributed to militants

4 7 15 17 21 27 31 34 35 38 40 43

while data from the Central Bank of Nigeria indicates that earnings from the oil and gas sector dropped to N185.8 billion in the month of May. The prostrate state of the nation's economy is President Muhammadu Buhari's biggest headache and how well he navigates the country out of this logjam may well define the future of his government. This is our cover story for this edition. Still on petroleum, it is gratifying that gas flaring in the country has dropped from a previous level of 65 per cent to 20 per cent, giving added impetus to the nation's march toward zero-flaring by 2020. Leading this march, the multinational company, Shell reduced gas flaring in its operations by 85 percent. According to the company in its 2015 Annual Sustainability Report, "flaring from Shell Nigeria facilities decreased in 2015 due to divestments and improved operations at our assets. Progress was also made on several gas-gathering projects, which are now at advanced stages of completion." The implication of all these, according to outgoing managing director of the Nigeria LNG Limited, Babs Omotowa, is that Nigeria is no longer in the league of top five gas flaring countries in the world. Does this call for celebration? Indeed. On this celebration note, we say welcome to August. What you have in your hands is a bumper package. Please, enjoy.

COVER

Nigerian govt, militants in game of cat and mouse

OIL

Asian bookings: Nigerian crude slips lower

FOCUS

Oil market rebalancing, OPEC important to world economy - Al-Sada

GAS

Nigeria on track to end gas flaring by 2020 -Ladan

POWER

TCN, NBET get $473m facility from AfDB to boost power supply

FINANCE Govt moves against tax evasion by multinationals

LABOUR Oil workers demand clear policy on kerosene

SOLID MINERAL Nuclear experts in Adamawa over uranium radiation

FREIGHT Value of second-hand vessel sales halved in July

MOTORING

Early-build Tesla Model X SUVs face quality issues

TECHNOLOGY

Electricity generation

COMMUNITY Govt, SNEPCo explore health partnership opportunities.

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2016 August, SweetcrudeReports

Cover Story

2016 August, SweetcrudeReports

Nigerian govt, militants in game of cat and mouse Urgent resolution required to bail out Budget 2016 Oil above benchmark price Output remains below expectation

Militants OSCARLINE ONWUEMENYI, Abuja

he brick-a-bat between the N i g e r i a n government and militants blowing up hydrocarbon assets in the Niger Delta has devolved into a righteous foodfight over who may be speaking the truth about ongoing peace efforts, if any, and who is not. Even as President Muhammadu Buhari reportedly confirmed that his administration is in talks with Niger Delta militants with the help of oil companies and lawenforcement agencies to find a lasting solution to the insecurity in the region, the militants have come out quickly to deny any such event. Similar statements of entreaties attributed to government officials in the past have been rapidly dismissed as non-existent and an effort to deceive the public. In the absence of any direct or indirect talks, many Nigerians are wondering how any resolution may be reached on the crisis in the region.

In the meantime, the Niger Delta Avengers, NDA, arguably the most destructive of the militant groups operating in the region, has claimed responsibility for the recent wave of attacks on oil assets in the region. Most recently, it issued another threat to oil workers, asking all of them to vacate the oil fields and terminals because it was ready to wage a dirty war. Many industry watchers acknowledged to our correspondent that in the face of collapsed oil prices and continuing uncertainty in the global crude market, and given the country’s singular reliance on oil for economic survival, the government needs to engage the militant groups if there is to be any hope of peace in the region, which will allow for the continued exploitation of crude oil resources. Urgency for a resolution The urgency for a sustainable resolution to the carnage in the Niger Delta is sharpened in the face of increasing revenue losses, which has threatened the Federal Government's implementation of the 2016

A statement issued in Abuja by the president's media aide, Mr. Garba Shehu, said Buhari spoke of the government's engagement with the militants in the oil-rich region when he met with the outgoing German ambassador, Mr. Michael Zinner, at the State House b u d g e t . R e c e n t l y, t h e government admitted that the Nigerian economy is in a recession, expressing worries that unless the militancy in the oil-rich Delta is checked there may not be much hope of an economic improvement. Finance Minister, Mrs. Kemi Adeosun, made the admission of the recession while briefing Senators in plenary on the state of the economy, issues relating to the implementation of the 2016 budget and measures by the government to bail

out the economy. Speaking in Abuja also, the Group Managing Director of the Nigerian National Petroleum Corporation NNPC, Dr. Maikanti Baru, lamented that due to the activities of pipeline vandals, over 3,000 vandalism incidents were recorded every year from 2010-2015, while in 2015 alone, pipeline losses of petrol volume of over 643 million litres were incurred. He noted that “From January to May this year, almost 1,447 cases of pipeline hacking were recorded, resulting in a loss of 109 million litres of petrol and

560,000 barrels of crude oil to refineries, posing a great threat to the nation’s economy and the 2016 federal budget. “The 2016 budget plan was based on 2.2 million barrels per day, b/d, of crude oil production. However, the budget plan is now grossly impacted due to renewed militancy with about 700,000 b/d of oil production curtailed due to pipeline vandalism." A statement issued in Abuja by the president's media aide, Mr. Garba Shehu, said Buhari spoke of the government's engagement with the militants in the oil-rich region when he met with the outgoing German ambassador, Mr. Michael Zinner, at the State House. Buhari assured his guest: "We understand their feelings. We are studying the instruments. We h a v e t o s e c u r e t h e environment, otherwise investment will not come. We will do our best for the country." The President's attempts in the past to use strong-arm tactics and threats to corral the militants have met with little or no success. Military deployment of personnel and

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Cover

2016 August, SweetcrudeReports

Oil platform

Nigerian govt, militants in game of cat and mouse CONTINUED FROM PAGE 4 equipment such as gun boats and helicopters to the area has yielded minimal results. And international observers have warned the government that an outright military action in the region would only worsen the state of affairs in the region. Govt deceiving the people, international community Militants In response to government's claims of being in talks to resolve the crisis, the group, Niger Delta Avengers, NDA, told President Buhari to stop deceiving the people and international community that his administration is in talks with its members in the region. In a statement signed by its spokesman, Murdoch Agbinibo, NDA said there was no such meeting with the Federal Government. It noted that if there was any such meeting, it then means that the President was talking to his mercenaries sent to disturb the genuine

struggle of the agitators “Our attention has been drawn to media report that the President is in touch with Niger Delta agitators including the Niger Delta Avengers but the truth is that we are not aware of any peace talk. “If there is any such peace talk, it means the President is talking to their mercenaries set to disturb the genuine struggle of the agitators. “The President Buhari-led government is not sincere to the Nigerian people and their foreign allies. “If we are to engage in any peace talk, we made it clear that the international community must be part of it. The President knows our demands. So they should stop deceiving the international oil companies, the general public and the international community”, it stated. But as Buhari assured the ambassador of peace talks in the oil region, the Avengers issued another threat to oil workers, asking them to vacate

the oil fields and terminals. In the statement also by Agbinibo, the militant group specifically warned the two major oil workers' unions in the country - the Nigeria Union of Petroleum and Natural Gas Wo r k e r s , N U P E N G , a n d Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN - and foreign oil company workers to lea v e t he oil field s a nd terminals because "it will soon be very dirty". Another group, the Ijaw Youth Council, IYC, dismissed the government’s position, noting in a statement by its spokesperson, Mr. Eric Omare, that President Buhari's claim of talks with militants showed lack of seriousness by the government to end the attacks on oil facilities. “The Ijaw Youth Council worldwide says that President Buhari and the Federal Government of Nigeria should stop deceiving Nigerians and the international community about talks with Niger Delta

But as Buhari assured the ambassador of peace talks in the oil region, the Avengers issued another threat to oil workers, asking them to vacate the oil fields and terminals militants on how to stop attacks on oil facilities in the Niger Delta region. “It is highly ridiculous for President Buhari to say that his government is negotiating with Niger Delta militants through oil companies and law enforcement agencies during the farewell audience with Mr. Michael Zinner, the outgoing Ambassador from Germany on Thursday, on the 21st of July, 2016,” the statement said. The group argued that what was happening in the region was beyond what oil

companies and security authorities could handle without the direct involvement of the government. “The IYC wonders if Nigeria is back to the pre-colonial and preindependence Royal Niger Company days when international companies governed Nigeria. The point must be made that the issues at stake are completely beyond the capacity of oil companies to resolve. “For the umpteenth time, the IYC calls on the aides and advisers to President Buhari to

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2016 August, SweetcrudeReports

Govt, militants in game of cat and mouse

President Buhari Militants CONTINUED FROM PAGE 5 properly advise him on how to solve the current hostilities in the Niger Delta region and equally display a determination to resolve the problem as his predecessors did. â&#x20AC;&#x153;Only a sincere and holistic dialogue with the people of the Niger Delta region which is aimed at addressing the remote causes of recurrent militancy can bring permanent peace to the Niger Delta region. This can only happen when President Buhari as the political leader of Nigeria comes down to the negotiation table.â&#x20AC;? President Buhari, one may conclude from his body language and utterances so far, is unlikely to personally engage the agitators any time soon. As a former general, he may be inclined to believe that only a total and unconditional surrender by the militants is acceptable. But, remarkably, the militants have refused to play his game. They are indignant in their righteous claim to the natural resources from the region and have staked their claim. In the meantime, the region, soaked in oil, burns everyday, even as the national economy continues its spiral into deeper recession. The truth however is that the

government must find a lasting solution to the crisis if it had any hope of raising enough revenue to fund the 2016 budget, run the economy and fulfil its many obligations to the people. Wooing ex-militants with stipends To woo Niger Delta exmilitants and avoid a further escalation of an already bad situation, the government has resumed payment of stipends to the ex-militants, abandoned by the Buhari administration for lack of funds. The stipends are being administered under the Presidential Amnesty Programme initiated during the regime of late President Umar Yarâ&#x20AC;&#x2122;Adua at the height of the militancy in the Niger

Delta. The government has under the programme been allocating and spending billions of Naira in the rehabilitation of the former militants, including on scholarships to study abroad a n d l o c a l l y, a n d o t h e r payments. This was suspended by the present government. But, Special Adviser to the President on Niger Delta/Coordinator of the Presidential Amnesty Programme, Brig-Gen. Paul Boroh (rtd.), announced recently that the payment has recommenced. The assurance for the payment of the stipends was given in a statement signed by Piriye Kiyaramo of the Media and Communication Department of the Amnesty

He said Buhari attaches so much importance to the Amnesty Programme, commending the ex-agitators and the people of the Niger Delta for their cooperation

Office and made available to journalists in Abuja. Boroh, who expressed concern over the plight of the exagitators in respect of the stipends, maintained that President Muhammadu Buhari appreciates their patience and that the hiccups in the payment of their stipends are already being addressed. He said Buhari attaches so much importance to the Amnesty Programme, commending the ex-agitators and the people of the Niger Delta for their cooperation. He reiterated the commitment of the Federal Government in making the amnesty programme to run better for the benefit of the 30,000 exagitators and other youths in the region. Boroh further noted that President Buhari, is already putting together a youth d e v e l o p m e n t a n d empowerment package that would directly impact the exmilitants and other youth in the region. The government's resumption of payment of the stipends was mainly informed by protests by the ex-militants along major roads in the Delta in respect of the suspended stipends, but sources within the Presidency

maintained that it was a move to reach out to both the exmilitants and the current agitators as means of achieving peace. How far this will go to assist in achieving the desired peace and ensure increased oil and gas production that would enable the government reap maximum income from the oil and gas investment in the Niger Delta, is left to be seen. Oil market blues Meanwhile, the situation in the international oil market has not shown that the Federal Government is close to meeting its expectations as contained in the 2016 budget. Going by the budget, the government plans to spend N6.06 trillion during the year. This expenditure is expected to be funded by revenue from oil, predicated on a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day. Oil prices may have gradually risen above the projected benchmark price (last week, prices were about $43 per barrel), but, the militant attacks in the Niger Delta have ensured the budget, with its inbuilt N2.2 trillion deficit, remains under threat.

Oil

2016 August, SweetcrudeReports

Asian bookings: Nigerian crude slips lower …Indian buyers forced to cancel Qua Iboe loading

Oil vessel

argoes of Nigerian and other West African crude oil sailing east are on track to fall in August due to fierce competition, shaky demand and disruptions in Nigerian loadings, going by indications from a Reuters survey of shipping fixtures and traders. According to the survey, a total of 55 cargoes, for 1.685 million barrels per day, b/d, are booked to sail to Asia this month. The total is just under 2 percent lower than the planned bookings in July but is more than 8 percent lower than August last year. Overall buying in Asia is in question as refinery margins hit five-year lows last month due to a growing excess of refined products. Some refineries are already processing less crude, while others are preparing for maintenance later in the third quarter. At the same time, nearly all crude oil sellers are targeting Asia. Imports of Iranian crude from China, India, Japan and South Korea

increased markedly in June, the latest month of data available, as Iran's efforts to regain market share lost during years of sanctions paid off. As a result, some Nigerian oil has been edged out. The biggest difference from a year earlier was in bookings for India, due in part to the unpredictability of Nigerian oil loadings. While the shipments to India were slightly higher than July, they are some 36 percent lower on a barrels per day basis compared with August 2015. State-run refiner HPCL was forced to cancel its booking of the VLCC Desh Vaibhav last month after ExxonMobil declared force majeure on Qua Iboe crude due to a pipeline problem. While IOC rebooked the same vessel to carry other Nigerian grades, including Agbami, to India, Exxon has yet to reissue a Qua Iboe loading programme. India is set to take an almost equal amount of Angolan and Nigerian cargoes in August, with six of the former and seven of the latter.

As a result, some Nigerian oil has been edged out. The biggest difference from a year earlier was in bookings for India, due in part to the unpredictability of Nigerian oil loadings China's bookings fell slightly from July. Key trader Unipec had offered some of its August-loading Angolan oil cargoes for sale elsewhere in the Asia, which sources said was related in part to flooding across China that disrupted some refinery operations. Energy Aspects had estimated that refinery throughput would fall by around 200,000 b/d in July, which others said would have a knock-on effect on the crude the country chose to import later. In another development, India’s Bharat Petroleum Corporation Ltd issued a spot tender to purchase several

Malaysian light sweet crude grades, raising expectations that more Indian end-users could switch their focus to Southeast Asian supplies amid growing uncertainty over the exports of Nigerian and Mediterranean crude grades. BPCL is seeking up to one million barrels of various Southeast Asian light sweet crudes, including Malaysia's Miri Light, Labuan, Tapis, Kikeh, Kimanis and Bintulu as well as Brunei's Seria Light and

Champion crudes for loading o v e r S e p t e m b e r 11 - 2 0 , according to an official tender notice seen by S&P Global Platts. The tender closes July 22, with validity until July 26. The latest spot tender raised a few eyebrows in the AsiaPacific sweet crude market, as the Indian state-owned company does not regularly seek Malaysian and Bruneian crude grades in the spot market. BPCL's latest move was seen a s n e c e s s a r y, a s t h e procurement of any Nigerian crude grades would be a big risk amid ongoing production hiccups caused by militant attacks in the Niger Delta, a company source said. According to the source, "BPCL, like many other Indian state-run companies, prefer to take Nigerian light sweet crudes like Qua Iboe and Bonny Light. Those are the number one choices," the source said, adding that "when production (of light sweet Nigerian grades is) in doubt, the next best option would be Malaysian (grades).”

2016 August, SweetcrudeReports

Oil

Oil rig

Revenue from oil, gas drops to N186bn in one month

igeria’s earning from the oil and gas sector d r o p p e d slightly by 0.48 per cent to N185.8 billion in the month of May 2016, according to data from the Central Bank of Nigeria, CBN. The CBN, in its Economic Report for May 2016, disclosed that oil revenue declined by N900 million from N186.7 billion recorded in the preceding month. The May figure also represented a decline of N81.4 billion or 30.46 per cent from N267.2 billion recorded in May 2015. In general, the CBN stated that gross federally-collected revenue in May 2016 stood at N384.88 billion, falling short of the provisional monthly budget estimate of N814.87 billion by 52.8 per cent. It added that gross federallycollected was also lower than the receipt of the preceding month by 1.6 per cent. It noted that the development, relative to the provisional monthly budget

estimate was attributed to the decline in oil and non-oil revenue. According to the CBN, at N185.76 billion or 48.3 per cent of the total revenue, gross oil receipts fell short of both the provisional monthly budget estimate of N452.60 and the preceding month’s receipts of N227.69 billion by 59.0 and 0.5 per cent, respectively. The CBN attributed the decrease in oil revenue relative to the monthly budget estimate to the decline in domestic crude oil/gas sales owing to shut-downs and shut-ins in production arising from repairs at some NNPC terminals. It added that pipeline destruction, vandalism and the persistent decline in crude oil prices also contributed to the decline. Further breakdown of oil revenue revealed that crude oil and gas export sales stood at N57.1 billion in May, rising sharply by 111 per cent from N27 billion recorded in the preceding month, while

earnings from Petroleum Profit Tax, PPT and Royalties dropped to N65.7 per cent, from N83.6 billion recorded in April 2016.

omestic crude oil and gas sales also dropped to N56.2 billion from N69.5 billion recorded in April 2015, while other earnings from the petroleum industry rose slightly to N6.8 billion from N6.6 billion in April 2016. In the month of May 2015,

the CBN data showed that oil revenue stood at N267.2 billion, broken down into crude oil and gas export sales N80.4 billion, PPT/Royalties N94.3 billion, domestic crude oil and gas sales N83.8 billion and others N8.7 billion. In its further analysis of the May 2016 figure, the CBN said, “Of the gross federally-collected revenue, the sums of N57.11 billion, N1.20

According to the CBN, at N185.76 billion or 48.3 per cent of the total revenue, gross oil receipts fell short of both the provisional monthly budget estimate of N452.60 and the preceding month’s receipts of N227.69 billion by 59.0 and 0.5 per cent, respectively

billion and N6.33 billion were deducted from the gross oil revenue in respect of Joint Venture Contract (JVC) Cash Calls, DPR cost of collection and NNPC Refunds, respectively; leaving a net balance of N121.12 billion as oil receipts. “Similarly, the sum of N7.35 billion was deducted as cost of collection by the FIRS and NCS from the gross non-oil receipt, leaving a net balance of N191.77 billion. Overall, the total federally-collected revenue (net) amounted to N312.89 billion. “Of the total federallycollected revenue (net), the sum of N207.88 billion was transferred to the Federation Account for distribution among the three tiers of government, N62.65 billion to VAT Pool Account, N27.08 billion to the Federal Government Independent Revenue and N15.28 billion to ‘others’ (including Tertiary E d u c a t i o n Tr u s t F u n d , National Information Technology Development Fund and Customs Special Levies).”

Oil

2016 August, SweetcrudeReports

Investors, experts optimistic of large oil discovery in Chad Basin

Chad Basin Lake Chad OSCARLINE ONWUEMENYI, Abuja

he Federal Government's plans to resume oil and gas exploration in the Chad Basin in the last quarter of this year have received a boost as investors, experts and other stakeholders in the nation's oil and gas sector expressed optimism at the possibility of discovering oil in large commercial quantity in the region. President Muhammadu Buhari disclosed recently that his administration had commenced the process of implementing carefully conceived initiatives which would see the country hitting a production target of 2.8 million barrels per day (bpd) of crude oil through a series of actions aimed at extending oil and gas exploration into new fields in the Lake Chad Basin in the northeast, and in the coastal states like Lagos where oil has been discovered in commercial quantity. Investors in the nation's oil and gas sector have commended the government's initiative, saying the northern region of Nigeria has about 2.3 billion barrels of oil and about 14.65 trillion standard cubic feet of

natural gas in the Chad Basin. This, in addition to about 37 billion barrels of proven oil reserves and about 187 trillion standard cubic feet of gas in the South, means more income for the nation, especially at the critical time when the nation is facing serious agitations from militants in the oil-rich Niger Delta region. Also, oil and gas experts have reaffirmed their confidence in the 3D seismic studies generated from the Chad Basin recently which revealed that oil may well be very close to being found now in Lake Chad. The search for oil in Nigeria's Chad basin, which is adjacent to Niger Republic, Cameroon and Chad, had been on for three decades. Former Minister of Interior and Chairman of Integrated Oil and Gas Ltd, Capt. Emmanuel Iheanacho, noted in an interview recently that there was a strong possibility that oil would be found in the region soon. He also said the development of a fledging oil and gas industry in the northeast would boost the economic fortunes of the country. The President of the Nigerian Mining and Geosciences Society (NMGS), Professor Gbenga Okunlola, expressed the hope that the country's north has massive quantities of

oil judging by the discoveries of commercial oil in neighbouring countries like Chad and Niger and even farther away in Uganda and Kenya. "There should be in ours, too, because the geology that exist there are the same with the ones we have in our inland basins. It would make economic and socio-economic sense to explore for oil and gas in these basins if only to increase Nigeria's hydrocarbon resources," he said. Also, Dr Ibrahim Mohammed, special adviser on petroleum resources to former President Olusegun Obasanjo and former military head of state, General Abdulsalami Abubakar (rtd), said the discovery of oil in nearby countries "should serve as booster, encourage and stimulate" the government to explore for hydrocarbons in Benue, Chad, Anambra and other inland basins." Mohammed also said government should consider energy security as very important and note that the concentration of oil exploration in one part of the country would be counterproductive if serious security issues arise in the area.

Also, oil and gas experts have reaffirmed their confidence in the 3D seismic studies generated from the Chad Basin recently which revealed that oil may well be very close to being found now in Lake Chad.

He blamed inconsistency in policies and the inability of successive regimes to continue the activities started by previous governments as the major reasons exploration work had not begun in the region. According to him, it would make economic and socioeconomic sense to explore for oil and gas in these basins if only to increase Nigeria's hydrocarbon resources. "If oil is explored here in the north, the over-dependence on oil in the Niger Delta will be reduced and, of course, the social and economic welfare of the people will be improved as many jobs will be created and the region will be better for it," he maintained. The Director-General of the

Lagos Chamber of Commerce and Industry, Muda Yusuf, also advised the government to put in more efforts to ensure the realisation of the project. On whether the insurgency in the region will create a challenge, Yusuf argued that "insurgency cannot last forever and, more so, the trend is declining." He asserted that the current volatility in the oil sector has taught the country a lesson, adding that synergies should be built and new approaches adopted to enable the country e x p a n d i t s e c o n o m y, infrastructure, manpower base, maintain domestic and regional peace and protect the environment.

2016 August, SweetcrudeReports

Oil

Facility for ExxonMobil’s Satellite Field project, fabricated by indigenous company, Nigerdock

NCDMB's new $100m Fund will boost oil & gas operations - Executive Sec CHUKS ISIWU

he Nigerian C o n t e n t Development and Monitoring Board, NCDMB, says its new $100 million Nigerian Content Intervention Fund, NCI Fund, will be utilised to finance existing and intending manufacturers, oil and gas servicing companies and original equipment manufacturers in the Nigerian oil and gas sector. Specifically, the Fund will help them acquire machinery and ancillary equipment as well as initial stocks or increase in stocks of raw materials, spare parts and components. It will also help in leasing of industrial and business equipment, and marine vessels. These will go to boost oil and gas operations in the country, according to Acting Executive Secretary of the board, Mr. Patrick Obah. The NCI Fund was launched last week in Lagos by NCDMB and partners, the Bank of Industry, BOI, at a ceremony which also featured the signing of a Memorandum of Understanding, MOU, between NCDMB and BOI, spelling out the conditions for the operation of the Fund. The Bank of Industry is the custodian and manager of the Fund. Obah said the Fund, sourced from the Nigerian Content

Development Fund, NCDF – created by Section 104 of the Nigerian Oil and Gas Content Development, NOGICD, Act – will be accessible to eligible players at a single digit interest rate of 8 per cent. Other key features of the product include tenor range from 1 to 10 years, maximum moratorium of 12 months (from date of loan disbursement), maximum $10 million obligor limit and speedy processing. “This Fund was motivated by the desire to re-engineer the operations of the NCDF, increase access and grow indigenous participation in the oil and gas industry,” the Acting Executive Secretary said. Emphasising that NCDMB will continue to work at expanding the capacity of local companies, Obah invited industry operators to take step toward accessing the Fund, as he disclosed that the collaboration between the board and BOI in operating the Fund is driven by BOI’s expertise and specialisation as a development bank created to speed up the industrialisation of the Nigerian economy. Also speaking, Acting Managing Director, BOI, Mr. Waheed Olangunju, described the institution of the NCI Fund as a welcome development, expressing hope that the partnership between his bank and NCDMB in its

“This Fund was motivated by the desire to re-engineer the operations of the NCDF, increase access and grow indigenous participation in the oil and gas industry,” the Acting Executive Secretary said

administration would touch the lives of Nigerians. He also expressed optimism that the Fund would drive industrialisation in the country. Olagunju stated that the target of the fund would be small, medium and large scale enterprises as he maintained that the coming of the fund would contribute in gradually reducing the nation’s dependence on external sources for materials and expertise.

Deepwater projects in Nigeria face tough times – Report

eepwater projects in Nigeria’s oil and gas sector are currently under pressure as global upstream and exploration spending has dropped by more than $1 trillion since the start of the oil price slump in mid-2014, a recent report by Wood Mackenzie has noted. The report equally said that most major conventional oil projects are at risk of cancellation or deferral if global prices remain at $50 a barrel. The report specifically remarked on developments in the Nigerian oil and gas industry, which is feeling the heat as majority of the oil service firms have downsized in huge numbers while many indigenous operators are finding it difficult to meet their financial obligations to their banks as a result of frequent cancellation of contracts by International Oil Corporations, IOCs. Wood Mackenzie, which publishes regular assessments of the economics of the world’s oil and gas fields, said especially deepwater projects offshore west Africa and in non-OPEC

nations won’t make any money at the current market price of $50 a barrel. “In conventional oil projects, deepwater West Africa is a tough place to be. A number of projects in Angola and in Nigeria have been pushed out of our analysis,” Simon Flowers, Wood Mackenzie’s chief analyst, told a news agency. Meanwhile, Angola’s state oil company, Sonangol has suspended all talks relating to assets sales and in Nigeria, the government has warned about using funds set aside for oil projects to fill budget shortfalls. Nevertheless, Wood Mackenzie’s analysis showed that aggressive cost cutting had increased the percentage of projects viable below $60 a barrel to 70 percent, up from 50 percent a year ago. Reductions of around 15 percent in global oil service costs, including payments for drilling rigs or personnel, have helped boost some project economics, especially in the U.S. tight oil market, the report said.

2016 August, SweetcrudeReports

Oil

We've no plans to resume oil production in Ogoniland - Shell

Gas facility MKPOIKANA UDOMA, Port Harcourt

h e S h e l l P e t r o l e u m Development Company, SPDC, has said it has no plans to recommence oil production in Ogoniland. SPDC also described as baseless and untrue, allegations that it is using the Nigerian Petroleum D e v e l o p m e n t C o m p a n y, NPDC, to cause division amongst Ogoni people and derail the Ogoni environmental remediation and restoration process as recommended by the UNEP report. Recall that the Movement for the Survival of Ogoni People, MOSOP, alleged recently that Shell was using the NPDC - a subsidiary of the Nigerian National Petroleum Corporation, NNPC - to resume oil exploration and production in Ogoniland. The Ogonis had also raised the alarm that the present attempt to resume oil

The Movement for the Survival of Ogoni People, MOSOP, alleged recently that Shell was using the NPDC - a subsidiary of the Nigerian National Petroleum Corporation, NNPC - to resume oil exploration and production in Ogoniland

production in the area was a ploy by SPDC and the NPDC, both of whom are joint venture partners, to stall the implementation of the UNEP report. But the Nigerian arm of the Dutch multinational oil c o m p a n y, t h r o u g h i t s spokesperson, Mr. Precious Okolobo, told our

correspondent in Port Harcourt that SPDC had no plans to resume operations in the area. According to Okolobo, "SPDC remains committed to play its part in implementing the recommendations of the UNEP Report. SPDC has no plans to resume oil production in Ogoni land.â&#x20AC;?

Senate worried by PIB delay

he Senate has expressed worry over Federal Government's delay in submitting the Petroleum Industrial Bill, PIB, to the 8th Assembly. This was made known by a Senate delegation which visited Belema Oil Producing Limited's facilities at Robert-kiri, Kula in Akuku-Toru Local Government Area of the Rivers State. The delegation, led by Sen. Barau Jibrin, expressed displeasure over the continued delay by the Executive arm of government in submitting the PIB to the Senate for consideration and passage. According to him, â&#x20AC;&#x153;The PIB was not introduced in this very Senate. It was introduced in the Senate in the 7th Assembly and as we speak, the executive arm of government has not brought the PIB to us." Sen. Jibrin further stated that although the Federal Government has not submitted anything to the senate yet, the legislative body was working put on PIB plans for the nation.

Senate Chambers "But we have initiated a PIB because of the concern that the current Senate has for the petroleum industry, which is the backbone of our economy. We are working hard and as soon as possible and as time allows, we are going to get the bill and get it passed. We are really concerned about the problem we are having in the petroleum sector," he said.

Oil

2016 August, SweetcrudeReports

Vandalised pipeline

Vandalism: Nigeria's oil sector growth falls by 1.89 percent OSCARLINE ONWUEMENYI, Abuja

he real growth of Nigeria’s oil sector slowed by 1.89 percent in first quarter of 2016, due to the reduction in the country’s daily production occasioned by pipeline vandalism by militants in the Niger Delta. The National Bureau of Statistics, NBS, which made this disclosure in its recentlyreleased First Quarter 2016 Gross Domestic Product, GDP, report released in Abuja, noted that this represents an improvement relative to growth recorded in the preceding year of 2015 when growth slowed to 8.15 percent. According to the bureau, the oil sector contributed 10.29 percent of the total GDP, marginally lower from the share recorded in the corresponding period of 2015, yet higher from the share in fourth quarter of 2015 by 2.24 percent points. It stated that in the first quarter of 2016, oil production stood at 2.11 million barrels per day, mbpd - 0.05mbpd lower from production in the fourth quarter of 2015.

It added that oil production was also lower relative to the corresponding quarter in 2015 by 0.07mbpd when output was recorded at 2.18mbpd. On a nominal basis, it added that the mining sand quarrying sector slowed by 34.98 percent during the first quarter of 2016. “This was 11.22 per cent points higher from growth recorded in the first quarter of 2015 and marginally higher from growth recorded in the previous quarter. “The decline in year-on-year growth is attributable to the falling oil prices. The sector contributed 4.14 per cent to overall GDP in the first quarter of 2016, lower than the contribution recorded in the same quarter of 2015 and the preceding quarter by 2.60 percent points and 1.04 per cent points respectively. “In real terms, Mining and Quarrying sector slowed at 2.96 percent in first quarter of 2016, a relative improvement from the first quarter of 2015 by 4.94 per cent points and fourth quarter of 2015 by 5.08 percent points. It added that "While crude oil output weighed on growth, the sector was supported by a substantial improvement in

output in Metal Ores. The contribution of Mining and Quarrying to Real GDP in the first quarter of 2016 was 10.34 per cent, marginally lower relative to the corresponding quarter of 2015 yet higher from the previous quarter by 2.13 percent points." Reviewing the activities in the non-oil sector, the bureau stated

that while crop production, trade and telecommunications and information services supported the growth of the sector, growth was weighed upon by declines in manufacturing, financial institutions, and real estate. It added that the sector slowed by 0.18 per cent in real terms in the first quarter of 2016.

“This was 5.77 per cent points lower from the corresponding quarter in 2014 and 3.32 percent points from the previous quarter. In real terms, the nonoil sector contributed 89.71 percent to the nation’s GDP, marginally higher from shares recorded in the first quarter of 2016, and yet lower from the fourth quarter of 2015.”

NCDMB, NNPC, Imperial College collaborate on oil, gas research

he Nigerian Content Development and Monitoring Board, NCDMB, says it is collaborating with the Nigerian National Petroleum Corporation, NNPC, the Imperial College of London and four leading universities in Nigeria to develop a framework for worldclass research for the Nigerian oil and gas industry. The NCDMB said in a statement obtained by our correspondent that the collaboration seeks to establish a Centre of Excellence, CoE, for oil and gas research at the Federal Universities of Technology, Minna, Niger State; Federal Universities of Technology, Akure, Ondo State; Federal Universities of Technology, Owerri, Imo State, and the Niger Delta University, Yenagoa, Bayelsa State. The aim, it said, was to solve oil and gas industry problems in Nigerian universities and local research centres, thereby growing local

research capacities and retaining huge spend which stakeholders normally spend on research overseas. Speaking at the Needs Assessment Workshop on the Board’s CoE initiative held at Imperial College, London recently, the Acting Executive Secretary of the NCDMB, Mr. Patrick Daziba Obah, explained that the Board conceived the policy to galvanise the development of homegrown research and technology in the oil and gas industry. He listed other objectives of the collaboration to include developing a pool of capable researchers and world-class research centers, linking the oil and gas industry to academia and local supply chain through research programs and creating employment and training opportunities for Nigerians on the back of research projects domiciled in-country.

Oil

2016 August, SweetcrudeReports

BPE demands delineation between operator-regulator roles for NNPC

NNPC Towers, Abuja

he Bureau of Public Enterprises, BPE, wants a separation of the roles of the regulator from the operator and policy formulation in the Nigerian National Petroleum Corporation, NNPC, as currently practised. Acting Director- General of BPE, Dr. Vincent Akpotaire, made the call at the National Stakeholders’ Workshop on the Petroleum Industry Reform in Abuja. He lamented that the Directorate of Petroleum Resources, DPR, which ought to be a regulator for the industry is an arm of the NNPC in the present arrangement. “NNPC currently acts as the policy maker, the regulator, as well as an operator of the policies which go against international best practices. “It was because of the need to reform the sector that the National Council on Privatisation (NCP) in 2009 through the Federal Executive Council (FEC) transmitted to the National Assembly the Petroleum Industry Bill (PIB),” he said in a paper titled, ‘The Petroleum Industry Reform in Nigeria: Reinventing the Wheel by Innovation". He added that, “the challenges we are facing today were envisaged by the BPE over ten years ago hence the articulation

of the Petroleum Sector Reform and the first ever drafted Petroleum Industry. After over a decade, we are still talking about the problems rather than the solution.” Akpotaire pointed out that the delayed reforms in the corporation was meant to enthrone international best practices in the sector. He further lamented that the first attempt to pass the PIB was stalled by the Ministry of Petroleum Resources after it had passed through the first and second reading and subsequently tabled for public hearing. He said, “The ministry at that point made additional legal and regulatory provisions for a third regulator-the mid-stream petroleum sector regulator as well as other ancillary provisions that were claimed to have been omitted in the FEC’s approved draft bill.” According to him, the 2009 version of the PIB sought among others to promote transparency and openness in the administration of the petroleum sector in Nigeria, separate the commercial institutions in the sector from the regulatory and policy making institutions deregulate petroleum product prices, increase domestic supply and put in place a fiscal framework for increased revenue.

This consequently led to the redrafting of other versions the PIB which, he noted, conflict with the NCP’s reform mandate and the globally accepted framework in the sector. He noted, however, that, “The 2015 version of the PIB which is privately sponsored is outlined in only two parts, not properly structured into parts, creates an Asset Management Company, creates a Frontier Exploration Services, does not state who carries out the implementation of the reforms in the oil and gas sector; and also does not state who manages the funds on behalf of the Petroleum Host Communities Fund (PHCF).” Further in a statement by BPE spokesman, Mr. Alex Okoh, the acting DG recommended that since the 2009 PIB approved by FEC had no controversial provisions, having had the benefit of review by stakeholders, it should be represented with necessary adjustments to reflect the current realities in the sector to the National Assembly for enactment.

Artistic impression of an

Nigeria key in shaping global transparency standards - EITI

he Extractive Industries and Transparency Initiative, EITI, a global body which promotes public awareness about how countries manage oil, gas and mineral resources, have commended Nigeria for being one of the first countries to implement its standards. The EITI Country Manager, Mr. Alex Gordy, who led his team to the Nigerian National Petroleum Corporation, NNPC, head-office in Abuja, also stated that out of about 51 countries, Nigeria was key in shaping the global EITI development. Gordy, in the statement signed by the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Garba Deen Muhammad, expressed happiness that Nigeria has expanded the scope of its implementation of the EITI standards, across the e n t i r e value chain of the oil and gas industry as exemplified by the organisation's Nigerian arm, Nigerian Extractive Ind ustry Transparency Initiative, NEITI. He stated that Nigeria last underwent EITI vali dation in 2010 and that the new validation exercise has recently commenced. The EITI validation exercise is done in order to ass ess whether a country is or is not compliant with EITI principles and criteria. These include a commitment to implement EITI standards; commitment to work with civil society and the private sector; having individuals that lead implementation; and a work plan agreed with stakeholders. Earlier in his speech, the Group Managing Director of the NNPC, Dr. Maikanti Kachalla Baru stated that the NNPC r e m a i n s c o m m i t t e d towards full compliance with the standards oil rig required by NEITI.

Oil

2016 August, SweetcrudeReports

Seplat facility

Seplat loses $61m as Forcados Govt to draw funds from remains shut JV firms for Ogoni clean up KUNLE KALEJAYE

e p l a t , a n independent indigenous N i g e r i a n u p s t r e a m exploration and production company, posted a $61 million after tax loss as a result of the shut down and suspension of oil export at the Shell Nigeria-operated Forcados facilities. Earlier in February this year, militants in the oil-rich Niger Delta region blew up the pipeline feeding the Forcados export terminal, leading to a loss of at least 250,000 barrels of crude oil per day. Seplat transports its oil through the Forcados facilities. Meanwhile, Seplat's revenues for the half-year ended June 30, 2016 declined by 42 percent year-on-year to $143.02 million due to the disruption of oil export at the Forcados terminal. Within the same period, the

company's production fell by 21 percent to 25,695 barrels of oil per day compared with 32,580 in 2015 while gas production rose 59 percent year-on-year to 85 standard cubic feet per day, MMscf/d. Seplat’s CEO, Mr. Austin Avuru, said: “The shut-in and suspension of oil exports at the Forcados terminal since mid-February means we have faced significant challenges in the first half of the year. “However, our underlying fundamentals remain strong and we continue to invest to grow our gas business at a rapid rate.” Avuru explained that the Phase II expansion of its Oben gas processing plant in Edo State remains on track, with the arrival of processing modules into the country, noting that installation and commissioning of the modules are expected to take place by year-end. The expanded Oben gas

plant, according to Avuru, is expected to increase the company’s gross processing capacity from the current 300 MMscf/d to a minimum of 525 MMscf/d by year-end. “With this gas production capacity, Seplat will be able to supply gas to meet a third of Nigeria’s power generation needs,” Avuru said. Meanwhile, Seplat was the top loser as stocks sustained five straight days' losing streak at the Nigerian market on August 4. The equities market closed on a negative note, with the Nigerian Stock Exchange, NSE, All Share Index, ASI, depreciating by 0.53% to close at 7,687.80 basis points, compared with the 0.04% depreciation recorded previously. Its Year-to-Date, YTD, return currently stands at -3.33%. Downstream petroleum player, MRS led 17 gainers against Seplat and 23 other losers.

CONTINUED FROM PAGE 1 would be contributing the bulk of this and over the five-year period that we expect this to last before we go into the phase of restoration to ensure that the funds based on the work programme that we approve are readily available,” Buhari said. Buhari charged members of the Trust Fund to ensure the highest level of transparency and accountability in the management of the funds, expected to come jointly from IOCs and the government through the JVs. Managing Director, Shell Development Company of Nigeria, SPDC, Mr Osagie Okunbor, told newsmen after the inauguration of the governing council and BoT at the Presidential Villa that, “The bulk of the funding is going to come from the SPDC JV, which has as a 55 percent partner, the NNPC. So, you have to infer that government is in there. “But the whole process of our running our business on a day to day basis as Shell SPDC JV involves constant and revision within the JV, so to that extent you have to see the NNPC element of the JV as the government side.” The constitution and inauguration of the governing board and board of trustees of the $1 billion fund are coming on the heels of conflicting responses on the sources of government’s part of the funding, even as the IOCs said they were awaiting a proper governance structure for the fund by the Nigerian government. UNEP, in its recommendation in 2014, said $1 billion would be injected in the first phase of the clean up. The report had also recommended that the oil firm behind the pollution of the area and the Federal Government contribute the money into an Environmental Restoration Fund for Ogoni, which would be a running fund. Coincidentally, the inauguration of the council also came exactly five years when the extensive report and recommendations of the UNEP was submitted to the previous administration on August 4, 2011.

Focus

2016 August, SweetcrudeReports

Oil market rebalancing, OPEC important to world economy - Al-Sada Al-Sada

atar's Energy M i n i s t e r, D r. Mohammed Bin Saleh Al-Sada, who emerged president of the Organisation of the Petroleum Exporting Countries, OPEC, at the 169th meeting of the OPEC conference in Vienna in June, is working hard to stabilise the oil market. Al-Sada says the market is now on the path to rebalancing despite the recent decline in global oil prices, adding that OPEC has been in continuous talks to stabilise the market. "The recent decline observed in oil prices and the current market volatility is only temporary. "OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market," Al-Sada said in a statement quoted by Reuters. Market rebalancing An informal meeting of OPEC member countries is

scheduled to take place on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria from September 2628, the statement said. Oil prices have risen above the earlier sub-$30 low, lifted by reports of renewed talks by some OPEC members to restrain output. The price rise came on the back of renewed calls by some OPEC members to freeze production in a bid to rein in output, a demand non-OPEC oil producing giant Russia was quick to dismiss. Brent futures were up 15 cents at $44.42 per barrel in the first week of this month, though still lag a 2016 high near $53 a barrel hit in June. Al-Sada said the recent decline in price was "more of an outcome resulting from weaker refinery margins, inventory overhang — particularly of product stocks, timing of Brexit and its impact on the financial futures markets, including that of crude oil". He said an expected "higher crude oil demand in third and

Some OPEC officials had said a revival of talks on a global oil production freeze could be discussed at an informal meeting of OPEC and non-OPEC in Algeria in September, if oil prices weaken fourth quarters of 2016, coupled with a decrease in availability, is leading the analysts to conclude that the current bear market is only temporary and that the oil price will increase in the later part of 2016." Some OPEC officials had said a revival of talks on a global oil production freeze could be discussed at an informal meeting of OPEC and non-OPEC in Algeria in September, if oil prices weaken. OPEC member Iran has been the main opponent of a freeze as it looks to raise its

output to levels seen before the imposition of now-ended Western sanctions. At the last OPEC meeting in June, Al-Sada had told the media: “As we have seen, the worst is over after we all tolerated the drop in oil prices. Over the previous meetings the trend was downward, but between our last meeting and now we have seen that we have reached the bottom and that we also see vividly that the new trend has started with oil prices reaching $50/barrel. And it is likely that this trend will continue.”

Al-Sada stressed that the meeting had found itself on a higher platform as far as prices were concerned. “It is unlikely we will go back to that low platform. It is still just a trend, but we do hope that it will continue to the extent that investment will return to the industry,” he said. Low oil price & investment But, he noted that with prices dropping so significantly over the past two years, leading to a huge shrinkage in investment, OPEC and many non-OPEC producers, as well as the consumers, were now convinced that a fairer oil price was required for everybody associated with the oil sector to have a reasonable return and in a manner that the producers could continue investing in the future. On investments in the OPEC fold, he said they had fallen by an unprecedented level - initially by more than CONTINUES ON PAGE 16

Focus

2016 August, SweetcrudeReports

OPEC headquarters, Vienna, Austria

CONTINUED FROM PAGE 15 20 per cent followed by another 14 per cent. “If the oil price remains at where it is today, it is likely that next year it will show another drop and that will have a further impact on supply and demand. The oilproducing countries in OPEC are looking at this issue very responsibly. The organisation is doing its best,” he affirmed. OPEC & non-OPEC producers Speaking about OPEC’s relationship with non-OPEC countries, the president stateed that the organisation had established a platform for coordination with the producers. “We have a good understanding and good communication with them. We meet on an individual basis as well as between OPEC and non-OPEC. We talk to each other and listen to advice given be each other.” As for production, Al-Sada pointed out that it was evident that the general market share of OPEC and non- OPEC over a number of decades had been to the interest of non-OPEC

Oil market rebalancing, OPEC important to world economy - Al-Sada countries. “It seems that over the past few weeks, things changed and we can see a drop in the market share of non-OPEC producers, while OPEC production has increased,” he said. “The market has been very dynamic and the sentiment now is pretty positive. So the production of oil in OPEC has increased but it would appear that the market has needed this oil which is helping with the rebalancing of supply and demand worldwide,” he added. Asked if OPEC was concerned about oil demand growth in China slowing down, Al Sada said OPEC was always looking at the supply

and demand picture on a large scale and while demand in China was slowing down, it was increasing in other emerging economies, such as India. “Looking at the general incremental demand situation for 2016, it is still 1.2 million b/d higher than in 2015, so an increase in demand is happening and is likely to continue,” he maintained. On whether events in the oil market had spelled the beginning of the end for the OPEC, said: “Throughout its existence OPEC has been a dynamic, living organ that has responded to change. The world has changed and the market has changed. So many

“Looking at the general incremental demand situation for 2016, it is still 1.2 million b/d higher than in 2015, so an increase in demand is happening and is likely to continue,” he maintained things have changed, are changing today and will continue to change in the future. “OPEC has been responsive to these changes, interacting with the facts on the

ground and responding accordingly. It has never been the idea of OPEC to stand still without an appropriate, rational and pragmatic position.”

Gas

2016 August, SweetcrudeReports

Nigeria on track to end gas flaring by 2020 - Ladan

Gas flaring

KUNLE KALEJAYE

irector of the Department of P e t r o l e u m Resources, DPR, M r. M o r d e c a i Ladan, has disclosed that Nigeria is on track to ending gas flaring by 2020. The DPR boss, stated this during the Nigeria Gas Association 2016 Business Forum in Lagos, explaining that the Federal Government has put in place policies and interventions to make this happen, and that these would stimulate gas utilisation and monetisation in order to achieve a viable gas sector. His disclosure came as the outgoing Managing Director of Nigeria Liquefied Natural Gas, NLNG, Mr. Babs Omotowa, revealed that gas flaring, which was previously at 65 per cent, putting the nation on the league of top five gas flaring countries in the world, has reduced to 20 per cent. According to Omotowa, who spoke during the commissioning of NLNG/University of Ilorin Engineering Research Centre, in Ilorin, Kwara State, through

NLNG’s efforts, Nigeria was no longer in the league of top five gas flaring countries in the world. Speaking further on the drive towards ending gas flaring by 2020, Ladan said reforms had been initiated to re-position the gas sector in order to deliver on government’s key aspirations. These aspirations, according to Ladan, include developing a viable domestic market, creating new industry out of the old oil industry, capturing economic value, generating as much revenue from gas as from oil and ending gas flaring by the year 2020. “In recent years, government has begun the implementation of a nationwide gas infrastructure blueprint aimed at connecting all key supply sources to markets across the nation. Also, the Nigerian Gas Transportation Network Code, an enabler that will entrench t r a n s p a r e n c y, e f f i c i e n c y, fairness and non-discriminatory access to gas transportation networks is being implemented. “These interventions and ongoing government reforms in the industry, I believe, holds high prospects and shall boost

investor confidence in the gas sector with the provision of a radical structure that will enable Nigeria consolidate on the multiplier effect of gas on the economy, strengthen Nigeria’s standing in the high value export and domestic markets and manage the country’s gas resources for national energy security,” Ladan stated. Ladan added that an upcoming national gas policy will result in substantial investments in gas development, processing, transmission and downstream utilisation projects which in turn will catapult Nigeria into the League of Nations that have leveraged their strength in the abundance of natural gas to transform their economy. “The continued growth in gas production and utilisation with corresponding decline in flare volumes witnessed over the years despite the many militating challenges further attest to government’s commitment in putting in-place an enabling environment to entrench a win-win situation for all stake holders and providing a veritable platform for stimulating economic growth.” Ladan said.

Ghana’s VRA is WAPCo's biggest debtor -MD

anaging Director of the West African Gas Pipeline Company, WAPCo, Mr. Walt Perez, has revealed that the company was in a serious operational mess due to a huge backlog of monies owed it by its customers for gas supplied to them, as well as a dip in gas volumes allocated to the company. Perez made this known during a meeting of the Committee of Ministers of the West African Gas Pipeline Authority, WAGP, in Abuja, saying since August 2014, WAPCo had not received full and consistent payments for gas delivered to its biggest customer, Ghana’s Volta River Autho He stated that the the multibillion-dollar regional natural gas transmission company is now unable to undertake critical commercial operations because of the huge debts by its customers and that the company's continued commercial survival was now in doubt. According to him, unless member countries take urgent steps to salvage the operations of the company, their investments in the venture may have to go down the drain in a matter of time. Perez called on the ministers to come up with solutions to keep the company up. He said WAGP had for a while remained technically capable of transporting gas volumes up to contractual levels, but that many receipts have within these times remained below contracted levels and have now built up to put the commercial viability of WAGP in significant doubt. He stated that the problem with low gas volumes was exacerbated by a force majeure that was declared in 2013 and which still remains in effect today. He said as long as the direct and indirect effects of low volumes and force majeure persist, WAPCo’s business planning and immediate prospect for growth in the foreseeable future would not materialise unless these conditions change.

Gas

2016 August, SweetcrudeReports

Transcorp halts $1bn power plan due to gas shortage output to 700 megawatts.

ending the attacks on

generation to less than half of

megawatts of electricity in

have cut gas supplies to stations and forced millions of Nigerians to either do without electricity or buy fuel for their own generators. Also, a dollar shortage blamed on a 15month currency peg removed on June 20 has raised import prices and inflation, with the economy contracting in the first quarter. “How do you make the investments when you are generating far below your current capacity due to gas problems," Transcorp's Chief E x e c u t i v e O f f i c e r, M r. Emmanuel Nnorom said in a recent interview. The Niger Delta Minister, Pastor Usani Usani said yesterday the government is in talks with militants about

the Niger Delta Avengers, were part of the discussions as its members are unknown. The partial sale of 17 former state-owned power utilities three years ago was meant to attract the investment needed to expand the grid and end daily blackouts. Yet, private investors have been hampered by increasing debt owed by the government and the inability to obtain foreign exchange. Electricity firms under the umbrella body Electricity Generation Companies in Nigeria said last month they may be compelled to shut down because of the gas and currency shortages. The scarcity of gas has reduced Nigeria’s power

decade, even as the country holds the continent’s largest reserves of the fuel, contributing to the contraction of the economy which may shrink 1.8 percent in 2016, according to the International Monetary Fund. “My number one problem would be gas, owing to much capacity available that is not put to use,” Transcorp Power CEO, Adeoye Fadeyibi said in the same interview. Ughelli’s generation slumped to 70 megawatts this year before rising to 300 megawatts, or less than half of what it’s capable of generating, he said. The nation, which has about 180 million people, generated an average of 2,464

Africa with a third of the population has the capacity to generate more than 40,000 megawatts. Transcorp is in discussions with some foreign companies to diversify its sources of electricity to include solar, which will enable it lower constraints from gas supplies, Fadeyibi said. Nigeria’s Power Ministry signed agreements with 14 solar-electricity generating companies last month to supply 1,125 megawatts of electricity to the national grid. While Transcorp isn’t part of the agreement, it is looking at deals that will be competitive based on its projections, Nnorom said.

OSCARLINE ONWUEMENYI, Since then, attacks on pipelines, but could not the installed capacity of 6,000 June, the Power Ministry Abuja pipelines by militant groups confirm whether one group, megawatts, the lowest in a said. Comparably, South

ransnational Corporation of Nigeria Plc, popularly known as Transcorp, has announced the suspension of plans to build one of the country’s biggest power plants due to gas shortages that has made it difficult to obtain fuel The company said a downturn in Africa’s largest economy has hindered efforts to raise funds for the project. The company in 2014 said it would raise $1 billion to build a 1,000-megawatt gas-fired facility. Two years earlier, it bought the Ughelli plant in the hydrocarbon-rich Niger River delta from the government and more than doubled its

Interpipe focuses on quality key part of nterpipe considers quality control as a ,exceeding the activities to manufacture products lemented at imp customer needs.Quality control is ing from all stages of production process -start i mill and up to min e s u o h continuous casting at the in d pipe ends and nondestructive testing of pipe body an shipping to customers. pliance with The Company has been certified for com andards: nal st requirements of national and internatio

U ISO 9001, Quality Management System acc.to DST ISO 9001,and API Specification Q1; c.to ISO 14001 Environmental Management System ac standard; and ent System Occupational Health and Safety Managem acc.to OHSAS 18001 standard; s products have been certified for Company’ nal and compliance with requirements of natio , IN) 5L,EN D( international standards:API 5CT,API GOST,and TU; gas companies. Company is prequalified by major oil &

Gas

2016 August, SweetcrudeReports

Shell reduces gas flaring in Nigeria by 85%

Gas flaring

OSCARLINE ONWUEMENYI, Abuja

he Shell Petroleum Development Company of Nigeria, S P D C , h a s announced that the flaring volume of gas from its joint-venture facilities has reduced by 85 percent between 2002 and 2015. The company, which is the largest producer of crude oil in Nigeria with its operational tentacles spread across the Niger-Delta region, observed that this action is a significant step towards mitigating environmental effect of crude oil production. The flaring intensity (the amount of gas flared for every ton of oil and gas produced) was reduced by around 70 percent over the same period. According to the company in its 2015 Annual Sustainable Report, flaring from SPDC facilities decreased in 2015, due to divestments and improved operations at our assets. Progress was also made on several gasgathering projects, which are now at advanced stages of completion. For example, it has installed a gas-gathering plant at the Oloma Station that is ready for final commissioning.

Gas flaring contributes to climate change, and acid rains have been linked to the activities of gas flaring. It gives rise to atmospheric contaminants, and the implications on human health are all related to the exposure of those hazardous air pollutants emitted during incomplete combustion of the gas flare. “At Shell, we are working hard to minimise flaring associated with oil and gas production,” the report said. It noted that “Since 2000, all new SPDC JV facilities have been designed to eliminate continuous flaring of associated gas. “In parallel, a multi-year programme was implemented to install equipment for capturing associated gas from older facilities. These efforts have enabled SPDC JV to capture the gas that was previously flared and channel it to both the domestic and export (NLNG) gas markets. Key projects have been implemented as part of the drive to reduce gas flares. “To give you an idea, SPDC JV’s Okoloma Gas Plant in Rivers State supplies feed gas to the Afam VI Power Plant that contributes between 14

percent and 20 percent power to the national grid. Similar facilities in the Obigbo, Imo River, and Agbada axis feed the domestic gas network with supplies to nine industries, three in Aba and six in Port Harcourt. We also supply gas for power supply in Bayelsa State. SPDC JV continues to invest in major gas gathering that will drive further reductions in gas flaring.” It noted, however, that the planned start-up dates for two other major gas gathering projects have been delayed due to

It noted that “Since 2000, all new SPDC JV facilities have been designed to eliminate continuous flaring of associated gas”

lack of adequate JV fund from the government in 2015, including the continued theft of crude oil, reinforced the need to

Total signs long-term LNG agreement with Japan’s Chugoku Electric

otal has signed a binding heads of agreement with Chugoku Electric for the direct supply of liquefied natural gas, LNG, for a period of 17 years starting from 2019. Under the agreement, Total will supply Chugoku Electric with up to 0.4 million tons of LNG per year from the company’s global portfolio. “This supply agreement with one of Japan’s major regional electric utilities is an important milestone for Total in the country where the Group has been a reliable partner in supplying LNG for almost 40 years,” Laurent Vivier, president of gas at Total, said. “Strengthening our presence in Japan, the world’s largest LNG importer, through long-term cooperation with leading LNG buyers, such as Chugoku Electric, is a key component of Total’s strategy.”

maintain the highest standards of safety and security in Nigeria. The report further stated that, “In 2015, the SPDC, which is the operator of the SPDC joint venture (SPDC, Shell interest 30%), divested its interest in three onshore leases and a major pipeline. Our performance metrics for Nigeria this year reflect, in part, these divestments.” In 2015 especially, the gas flared from SPDC JV operations declined by 28 percent and flaring intensity decreased by 15 percent from 2014, partly due to divestments and also to their focus on gas flare reduction. However, a lack of adequate JV funding from its government partner has delayed planned start-up dates for two other major gasgathering projects.

Gas

2016 August, SweetcrudeReports

NLNG partners Warsash on maritime training, safety

NLNG vessel

KUNLE KALEJAYE

he Nigeria LNG Limited, NLNG, has partnered with Southampton Solent University’s Warsash Maritime Academy in United Kingdom to train and develop mariners globally. The partnership was officially launched with the commissioning of NLNG’s new Dual Fuel Diesel Electric, DFDE, vessels at the university. Outgoing Managing Director and Chief Executive of NLNG, Mr. Babs Omotowa, said during the ceremony that the introduction of the mannedmodel vessels was “a deliberate strategy to upscale NLNG’s world-class safety and operations records and achievements.” The facility, according to the company, will join other model used by Warsash Maritime Academy, a world leading marine technology and training academy, to provide training, consultancy and research to NLNG and help improve

mariners in the art of handling a ship.The models are tools of simulation and are built to the correct power to weight ratio as its full sized counterpart. NLNG explained that the model was built to the 1:25 scale after one of the six DFDE vessels was recently commissioned by Bonny Gas Transport, BGT, a subsidiary of NLNG. The company, in 2013, signed a $1.6 billion deal with Samsung Heavy Industries, SHI, and Hyundai Heavy Industries, HHI, to build six vessels. Commenting on the objectives of the partnership, Omotowa said, “NLNG’s current goal is to sustain growth and build upon it, safely. And that is precisely why we are here today. NLNG’s partnership with Warsash Maritime Academy helped us to obtain the required design specification for the manned model, which was delivered from South Korea last month. “The partnership will also deliver the highest quality ship handling training for NLNG

NLNG and Warsash Maritime Academy have a long-standing relation in training and development of skills for personnel manning NLNG vessels

fleet officers and authorised third-party personnel. This is in addition to specialized consultancy services required for the planned NLNG Marine Resource Centre at Bonny Island. “Our two companies may be separated by the oceans and great distances. But I have no doubt that we are united in our joint ambition to be the very best at what we do. It is no big surprise therefore that Nigeria LNG and Warsash have a relationship dating back many years.” He added that through integrity, team work, excellence and caring, NLNG has been built to be a safe, reliable and profitable company. NLNG and Warsash Maritime Academy have a long-standing relation in training and development of skills for ship personnel manning NLNG vessels. Dr Syamantak Bhattacharya, Director of Southampton Solent University’s School of Maritime Science and Engineering, said: “This most recent addition to the fleet demonstrates the importance placed on this type of training by the shipping industry. Our Ship Handling Centre is internationally renowned and Nigeria LNG’s latest i nv e st m e nt re p re se nt s a significant addition to our fleet. We look forward to welcoming Nigeria LNG’s officers to our Ship Handling Centre at Timsbury Lake.”

Compressed Natural Gas plant

Amaechi calls for investment in CNG infrastructure

inister of Transportation, Mr. Rotimi Amaechi, has urged investors to embrace construction of infrastructure for Compressed Natural Gas across the country. Amaechi, who made the appeal at the stakeholders’ workshop on Road Transport Management and Mass Transit Operations in Abuja, said the investments would boost the use of natural gas as an alternative for premium motor spirit or petrol for road transportation. He said that to enhance the use of gas in the country, petroleum agencies and private companies must provide the needed infrastructure. “For CNG to be successful, we must deal with the first issue, which is gas infrastructure, if there is no pipeline in Kano, how can we take CNG to Kano. If they say that we should invest in CNG, the government must be ready to invest in gas infrastructure, meaning that everyone should have access to it on ground. “Apart from the cost reduction, it is environment-friendly, so when the infrastructure is on ground, we can now introduce operators to it," he said. In his own presentation, the Managing Director of Nigeria Gas Company, NGC, Mr. Tunde Bakare, said the company was ready to collaborate with the Ministry of Transportation. He said the company was ready to introduce CNG as a viable substitute to fuel for road transport operations in Nigeria. Bakare, who was represented by Mr. Michael Arinze, said transport operators have depended too much on fuel, hence there was the need to shift to natural gas vehicles to save cost.

Power

2016 August, SweetcrudeReports

TCN, NBET get $473m from AfDB to boost power supply

Power transmission line

OSCARLINE ONWUEMENYI, Abuja

he Nigerian Bulk Electricity Trading Plc, NBET, and the Transmission C o m p a n y o f Nigeria, TCN, are to enjoy a $473 million loan facility from the African Development Bank AfDB, which will be divided into $273 million and $200 million for NBET and TCN respectively. Minister of Power, Works, and H o u s i n g , M r. B a b a t u n d e Fashola, disclosed this in Abuja when he met with a delegation from the International M o n e t a r y F u n d , I M F, explaining that all arrangements for securing the funds have been concluded. A statement by the ministry quoted Fashola as saying the support in loan agreement in the sum of $273 million has been earmarked to provide partial risk guarantee for the off-taker (NBET), while the sum of $200 million will be channeled to TCN for its grid upgrade plans. He said government intends to tackle this challenge in the power sector through holistic approach as contained in the recently unveiled “Road Map to

P o w e r, ” w h i c h c o n t a i n s timelines and planned series of complimentary activities and deliverables. “We are expecting that at the end of the year, our generation capacity will be over 6,000mw by the end of 2016; 10000mw in 2019 and 30,000mw in 2030,” Fashola noted. As planned within the maxim of incremental, stable and uninterrupted power, the minister said government had taken bold steps to harness the solar powered projects by signing off on the power purchase agreements (PPAs), with 14 companies located in 9 states and the FCT, which is expected to bring 1,150mw of solar energy to the national grid. The minister said the President Muhammadu Buhari administration has demonstrated its firm commitment to the diversification of the economy by moving it away from overdependence on oil. He added that for the first time the tone has been set, as the government has reduced the contribution of oil in favour of non-oil revenue especially agriculture and solid minerals.

Speaking on the government’s planned energy mix as contained in the road map document, the minister said that the plan was to have robust mix that will increase the use of coal, hydro, solar, and more gas to power, bearing in mind that energy in large quantum would be required for individual uses, household access and indeed spread of electricity access across the vast country. Also speaking at the meeting, the Permanent Secretary for Power in the ministry, Mr. Louis Edozien, said that the s e c t o r ’s c h a l l e n g e n o w occasioned by incessant vandalism of gas infrastructure has necessitated the development plan which identified stages of growth from 2017 to 2030 on the premise that vulnerability of gas supply will be radically addressed. According to him, a lot of new renewable energy sources would soon come upstream, including the 40mw Gurara dam in Kaduna State, the 40mw Kashimbilla dam in Taraba, 10 MW wind farm in Katsina and the 30mw phase one of Kudendan dual fired plant in Kaduna State.

AEDC appoints new MD, approves new management structure

he Board of Directors, Abuja Electricity Distribution Company, AEDC, has approved the appointment of Mr. Ernest Mupwaya as the new Managing Director and Chief Executive Officer of the company. A statement by the AEDC Head of Media Ahmed Shekarau in Abuja stated that the appointment of Mupwaya took effect from August 1, 2016. It stated that the appointment was subject to the approval of the Nigerian Electricity Regulatory Commission, NERC. It stated that the appointment followed the retirement of the outgoing Managing Director of AEDC, Mr Neil Croucher, after three years of service. It stated that Croucher, who played significant role in steering AEDC successfully through the challenges of post privatisation from 2013 to date, had over 37 years of experience in electricity supply industry. It stated further that the AEDC board approved a new management structure for the company with the creation of a Corporate Services Directorate . According to the statement, the new directorate will supervise the activities of five different units, including the Human Resources, Procurement, Government and Regulatory Relations, Public Relations and Fleet and Facilities Management. Mupawaya, who holds a Bachelor’s degree in Electrical Engineering and a Master of Business Administration, was until his appointment the Director of Commercial Services of the company. He is a member of several professional bodies, including the Nigerian Society of Engineers and the Council for the Regulation of Engineering in Nigeria. According to the statement, Mupawaya who has about 30 years experience in the industry was at different times Managing Director, Director, Divisional Manager, Regional Manager, Project Manager and Senior Engineer for the Zambia Electricity Supply Corporation, ZESCO.

2016 August, SweetcrudeReports

Power

Natural gas handling faciility

Pipeline vandalism impacts 7,562MW of electricity supply

ower supply across the country dipped over the weekend by 4,446Megawatts, MW, following attacks on gas pipelines by various militant groups in the Niger Delta region. The System Operator of the Transmission Company of Nigeria, TCN, noted that were there no constraints, the electricity market would have supplied 7,562MW to distribution companies or Discos but the gas and line challenges keep holding down the power sector. As a result, the Nigeria System Operator could only send out 2,902MW to the 11 electricity distribution companies. The Nigeria Electricity Supply Industry, NESI, on its website yesterday, said there was no water constraint on the day in review. However, NESI noted that the electricity sector which recorded 214MW line constraint lost an equivalent

of N2,237,000,000. “On July 24, 2016, average power sent out was 2902MWh/hour (up by 43 MWh/h). The reported gas constraint was 4446MW. The reported line constraint was 2 1 4 M W, W. T h e w a t e r management constraint was 0MW. The power sector lost the estimated equivalent of N2,237,000,000 on July 24, 2016, due to constraints,” it said.

The NESI had said on July 17, 2016, that average power sent out was 2670MWh/hour (down by 100 MWh/h). The reported gas constraint was 4200MW. The reported line constraint was 438MW

The NESI had said on July 17, 2016, average power sent out was 2670MWh/hour (down by 100 MWh/h). The reported gas constraint was 4200MW. The reported line constraint was 438MW. "The water management constraint was 0MW. The power sector lost the estimated equivalent of N2,226,000,000 on July 17, 2016, due to constraints,” it added.

Govt to prosecute substandard energy equipment contractors

he Federal Government says it would no longer condone substandard electrical installations and the use of poor materials on the power network in the country. It also warned that it would prosecute power equipment contractors who use substandard materials, stressing that no life must be lost due to someone’s negligence or poor judgement. Minister of Power, Works and Housing, Mr. Babatunde Fashola, made this known during the revalidation/certification programme for electrical installation contractors organised by the Nigerian Electricity Management Services Agency,

NEMSA, in Abuja. He said, “The era of substandard products and the period of ‘managing’ electrical installations are terms gone for good. With today’s t h a t p r o g r a m m e o f t h e a l revalidation/certification of Electrical equipment government will no electrical installation contractors, Nigerians will no longer accept bad poles. Our people longer condone substandard electrical will not accept poor materials and poor installations and use of substandard workmanship. Nigerians must get value for electrical materials and equipment within our networks. The life of every single their hard-earned money. Nigerian is important to us”. “I, therefore, wish to state in unequivocal

Power

2016 August, SweetcrudeReports

Inappropriate tariffs have created N300bn funding gap –Discos

Power transmission substation

OSCARLINE ONWUEMENYI, Abuja

he 11 electricity distribution companies in the country are pushing their case for the implementation of the recent tariff hike even as they lamented that the funding gap in the power sector is now over N300 billion due to inappropriate tariff structure in the past three years. Speaking under the umbrella Association of Nigerian Electricity Distributors, ANED, Mr. Sunday Oduntan, urged the Federal Government to create mechanisms to drive further investments into the sector. ANED said the Discos could not get loans from banks under the current tariff as the business was deemed not bankable, adding that this would become more herculean without an increase, especially given the recent court judgment reversing the tariff hike. “I enjoin us to look at the

i s s u e s i n t h e s e c t o r. Inappropriate tariff leads to shortfalls and that leads to funding gaps which has risen above N300billion. “The MYTO (MYTO) 2015 corrects the funding gap but it is spread over 10 years and recovered gradually; if you look at the template, the tariff will go down after the first three years,” Oduntan explained. According to him, a fair Multi Year Tariff Order was meant to cushion the impact but has not been cost reflective until the recent one signed in December last year. Oduntan said the MYTO 2.1 was then suspended till February this year noting that the privatised companies bore the revenue gap of January when the MYTO was not enforced. The ANED spokesman also urged the Federal Government to strengthen transmission services by doing a proper concession on managing and investing in the Transmission Company of Nigeria, TCN. He said the Discos can d i s t r i b u t e o v e r

10,000megawatts (Mw) but are constrianed by inadequate transmission infrastructures citing instances of poor allocation to Kano DisCo. "TCN requires about $7billion to construct a new 10,000Mw grid and another $1.2billion to fix the existing grid," Oduntan said. The Nigerian Electricity Regulatory Commission (NERC) last Friday said it has filed a stay of execution action on the 45 per cent average rise in electricity tariff while appealing against the court ruling. Oduntan admitted that but for vandals’ actions on oil and gas infrastructures since March this year, industry operators expected a rise in generation to about 6,000Mw from the 5,072Mw attained in February, a day after the tariff was enforced. He said significant improvement in power supply would have led to more revenue generation and speedier investments in rolling out meters, transformers and strengthening of networks.

Niger State demands 13% Niger State derivation of electricity from dams

iger State government is demanding 13 percent derivation allocation of electricity generated from generating hydro dams – Shiroro, Jebba and Kainji, all located within the state. The state governor, Alhaji Sani Bello, said at a stakeholders’ meeting with representatives of the communities where the dams are located, power generating, transmission and distribution companies which was held at government house, Minna. Bello demanded that Niger State be given 13 per cent derivation as has been the case with oil producing states that produces the energy resources upon which the country relies. He lamented that despite the fact that the nation’s three major dams are located in the state, citizens have been living in darkness for almost three months now, which has crippled both business and domestic activities without any explanation from those who should know, namely the Abuja Electricity Distribution Company (AEDC). He however, said he convened the meeting of major stakeholders with a view to not only identifying but also finding out lasting solutions to the problem as it affects the government and people of the state. He expressed the hope that the outcome of the meeting would translate into an improved electricity supply after waiting for months expecting that power would improve. Meanwhile, the minister of Power, Works and Housing, Mr. Babatunde Fashola, has inaugurated a committee to brainstorm on how to generate electricity from eight small hydro plants in Nigeria.

Power

2016 August, SweetcrudeReports

Installation of solar panels

Govt, 14 firms sign $1.75bn solar power agreements

n a bid to explore the immense potentials in the renewable energy in the country, the Federal Government has signed a front-runner solar Power Purchase Agreements, PPAs, worth 1.75 billion dollars with 14 companies to build 1.125 Megawatts, MW, capacity of renewable power in the country. Minister of Power, Works and Housing, Mr Babatunde Fashola, who signed the documents on behalf of government, said the agreement was to demonstrate government’s commitment to diversify Nigeria’s power industry. The minister further disclosed that before the year 2030, Nigeria would have achieved 30 per cent capacity in renewable energy, adding that Nigeria would invest in renewable power in areas such as biomass and coal. He explained that the era had gone when the country would depend on one source to generate its electricity. Fashola listed the companies as Pan Africa Solar with 75mw of electricity to be located in Kankia Local Government in Katsina and Nigerian Solar Capital Partners, 100mw located in Ganjuwa, Bauchi

state. Others are Afrinergia Power Limited, 50mw located in Kokowa, Nasarawa State; Motir Dusable Limited, 100 mw in Udi, Enugu State and Nova Solar 5 Farm Limited, 100mw located in Katsina State. Also Kvk Power Nigeria Pvt Limited, 100mw located in Yabo of Sokoto state; Middle Band Solar One Limited, 100mw in Lokoja West in Kogi and LR Aaron Power Limited, 100mw in FCT; Nova Scotia Power Development Limited, 80mw located in Dutse; CT Cosmos, 70 mw located in Kaduna West in Kaduna State and Oriental Renewable Solutions, 50mw in Kakowa, Jigawa. Quaint Abiba Power Limited, 50mw located in Manchor Local Government of Kaduna State and Anjeed Innova Group, 100mw located in Kafanchan, also in Kaduna State, round off the participating companies. Fashola lauded the participating firms for taking advantage of the opportunity to invest in Nigeria's energy sector, even as he added that the PPAs are the heart and soul of financing the power industry. He added that Nigeria sited many of its solar energy projects

in the northern part of the country because the area had more sun radiation than other parts. The minister expressed happiness over the confidence the investors had to invest in Nigeria’s power sector not minding challenges in the industry. He assured the investors that the Federal Government would provide them with good investment climate but would not tolerate low standard in the quality of their projects. Speaking earlier, the Acting Managing Director, Nigerian B u l k E l e c t r i c i t y Tr a d i n g (NBET), Mr Waziri Bintube, expressed happiness that the energy sector was making progress in ensuring that Nigerians had quality and stable electricity. Mr. Marcus Heal, Managing Director of Pan Africa Solar, who spoke on behalf of the investors, thanked states, Federal Government and other agencies that assisted the investors to succeed in getting their PPAs. He expressed dissatisfaction with the low rate of the tariff regime in the sector, adding that the investors had expected high tariff in the energy industry.

Govt to enforce energy conservation in national building code

he Federal Government has indicated that it would review the National Building Code to enforce energy efficiency and conservation rules towards ensuring and efficient and proper management of power in its bid to achieve uninterrupted supply in the years to come. The Minister of Power, Works, and Housing, Mr. Babatunde Fashola, who made the observation at a meeting in Abuja, noted that the current administration was focused on rolling out efforts at enhancing transmission capacity to rise up to the challenge of being able to evacuate additional power to be produced in this short term plan. Fashola also emphasised the need to collate effective and reliable data on energy usage in the country even as the sector moves to the next stage on the newly-launched Roadmap for Power, which is a stable power supply. He said, “We must know how many we are and how many we are going to be in the years ahead. This can only be through census – head count. It is after this exercise that we will know on an annual basis what additional population we must provide for, otherwise, even if we increase supply, we may not have stable power”.

Power

2016 August, SweetcrudeReports

4 Discos to pay N27.41m for breach of licence terms

Electricity substation

he Nigerian E l e c t r i c i t y R e g u l a t o r y Commission, NERC, has ordered four electricity distribution companies or Discos to pay fines amounting to N27.41 million due to what it called “failure to treat customers’ complaints and submit statutory quarterly reports.” According to NERC's communication specialist, Mr. Mike Faloseyi, the actions of the affected Discos constituted a breach of their licensing terms and conditions as provided in the Electric Power Sector Reform Act (2005) and regulations of the commission. Two of the erring companies, Port Harcourt and Enugu Discos, were sanctioned for their failure to submit quarterly reports on their key performance indicators, whereas Ibadan and Ikeja Discos were fined over failure to attend to customers’ complaints severally referred to them. The power sector regulator in various directives communicated to the Discos in question said the erring licensees should pay fines of various sums within two weeks, beginning on July 25, 2016, when the directives were signed by the acting chairman of NERC, Dr. Anthony Akah, and the general manager, legal, licensing and enforcement of the commission, Mrs. Olufunke

Dinneh. It also warned that failure to pay the recommended fines within the stipulated period would attract five per cent daily interests until remedial steps are taken. According to directive 152, the Ibadan Electricity Distribution Company (IBEDC) flouted the Electric Power Sector Reform (EPSR) Act 2005, its licensing terms and conditions as well as NERC Customer Complaints Handling: Standards and Procedures (CCHSP) Regulation 2006. “The Commission received several complaints directly from electricity customers in IBEDC operational jurisdiction, based on which same was forwarded via letters dated October 27, 2015, and April 15, 2016, to IBEDC’s Customer Care Unit for resolution, in line with CCHSP, 2006, NERC wrote in the statement. “However, IBEDC failed or refused to comply with the Commission’s request/directive to resolve the customer complaints in accordance with the provisions of the CCSHP 2006,” the statement further read. IBEDC was subsequently fined N10, 000.00 on each of the three grounds of misdemeanour beginning from April 22, 2016, till July 25, 2016, which totaled N2.850 million and due for payment within two weeks

Both Enugu (EEDC) and Port Harcourt (PHEDC) electricity distribution companies were found liable for their failure to submit quarterly reports on their key performance indicators, which runs contrary to terms and conditions of their license, Section 63 (1) of the EPSR Act 2005 beginning from the July date when the directives were signed.

In a similar development, Ikeja Electricity Distribution Company (IKEDC) was in Directive 151 found guilty on three grounds of violating its licensing terms and conditions, EPSR Act 2005 and CCHSP that compel it to obey every directives of the NERC, treat customer complaints within a stipulated time frame, as well as oblige the regulator every information sought from the company. The company was, therefore, fined N10, 000. 00 per day on each of the three ground of misdemeanour beginning from April 22, 2016, till July 25, 2016, when the directive was signed, also totalling N2.85 million.

PHED laments spate of transformer vandalism in Calabar, P'Harcourt

he Chief Executive Officer of the Port Harcourt Electricity Distribution Company, PHED, Mr. Jay McCoskey, has raised the alarm over the spate of transformer vandalism in recent times by unknown persons in its area of coverage. He raised the alarm following the vandalism of over 37 transformers at different locations under the coverage of the company. According to McCoskey, the Garden City Industrial Integrated Business Centre, IBC, Trans Amadi in Port Harcout lost 14 transformers to the dastardly acts of vandals. "The substations affected by these ugly incidents under the mentioned IBC include

Apamini, Woji, Ochari, Eleme, Amadi, Odum, Woji, Betico, Elelenwo among others in Rivers state. "The Garden City New, Rumuodomaya was not spared as nine transformers were vandalised. Okemini, Borrow-pit and Rukpakulusi sub-stations were tampered with by the vandals." At Paradise City Main IBC in Calabar, McCoskey said, "the vandals went away with armoured cables of different sizes in eight substations that affected Technology Substation, Calabar, Mbukpa, Maifa and Akaiba all in Calabar South Council of Cross Rivers State."

Power

2016 August, SweetcrudeReports

Shiroro hydro power plant

Nigeria needs sustainable energy to achieve Vision 2020 – Minister

inister of Science and Technology, Dr. Ogbonnaya Onu, has called for a secured, equitable and environmentally sustainable energy supply if Nigeria must fulfil the vision 2020:20. The Minister made this submission during a two-day technical validation workshop on Sustainable Energy For All Conference in Abuja, said only through partnership with private companies and international organisations can the country achieve its aspirations of becoming one of the most industrialised nations in the next few years. He said the Federal Government committed to the acceleration of the development of renewable energy and energy efficiency in the country through the National Energy Policy, the Renewable Energy Master Plan, REMP, and the vision 2020-20. Onu stated that this can be achieved through the transformation of the nation’s economy from one based mainly on fossil fuel to a low carbon economy based on renewable energy and energy efficiency. The Minister said though

sustainable energy for all initiative which was a global agenda was launched in 2011 during the United Nations General Assembly, it was important for all relevant stakeholders to deliberate in making it an action-plan for the realisation of sustainable energy for all in the country. The Representative of the United Nations Development Program UNDP Country Director Mr. Muyiwa Odele pointed out that the SE4ALL initiative, will go a long way to c o m p l e m e n t g o v e r n m e n t ’s efforts at increasing Nigeria’s access to electricity and other modern energy services for economic growth. Odele said it has become imperative to meet the energy need of many Nigerians both in the rural and urban areas, through the promotion of renewable energy technologies and energy efficiency. According to him, “The UNDP has been working tirelessly in partnership with the Energy Commission of Nigeria ECN and support from the Global Environment Facility GEF to put in place minimum energy performance standards for lighting and refrigerators for

regulation of Sub-Saharan products. “And also the establishment of standard energy efficiency testing laboratories for quality standardization for the Standard Organisation of Nigeria (SON)." Odele announced that the UNDP and ECN energy efficiency project which is parts of its contribution to ongoing national efforts to rebuild the Northeast which was destroyed by the terrorist group Boko Haram, in off-grid communities has been extended to ten more communities in Adamawa state. The Director of the Energy Commission of Nigeria Professor Eli Jidere Bala said the agency has been working with other stakeholders since 2012, when the sustainable energy for all initiative was launched in Nigeria to domesticate the United Nations initiative in the country. He explained that through series of workshops and meetings held since 2012, it was time for the preparation of country-specific action agenda across government ministries and departments, to bridge the gaps earlier identified in line with an international template.

Firm to launch first solar powered vehicle assembly plant

Nigerianbased renewable energy company, Arthur Energy Technology Limited, has announced plans to invest $1.57 million in the

Solar-powered vehicle assembly plant

country’s first solar-powered vehicle assembly plant. CEO of Arthur Energy Technology Limited, Mr. Arthur Anthony Okeyika, stated at a recent Climate Change and Energy Summit, that his company will inject the stated amount towards the first solar powered vehicle assembly plant, set to be built in Akwa Ibom state. He said, “We cannot ignore the ‘green’ market potential of Nigeria particularly now that we're faced with our current economic realities. Fossil fuel as the sole energy source for Nigerian cars, homes and industries is not a sustainable option if the conversation on nation building is to be taken seriously." Okeyika added that “We need an integrated solution to power our lives for the future and at Arthur Energy Technology limited we believe the solution is solar power.” He also announced his company’s long-term investment plan in clean transport, stating the revived push for Clean Development Mechanism, CDM, by state governments, international agencies and private sector to deepen the CDM market in sub-Saharan Africa is a welcomed development.