Sweetcrude july edition by Sweetcrude reports

Shell places limit on Bonny Light export P/10

ExxonMobil boss admits to Nigerian Content violations P/9

A Review Of The Nigerian Energy facebook.com/sweetcrudereports

VOL 04 N0. 48

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JULY, 2017

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Nigeria: Seven oil licenses illegally awarded between 2008 & 2011 Iyabo Obasanjo-Bello benefited from deal How DPR shot itself in the foot

62 58 54 50 46 42 38 34 30 26 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17

IOCs resort to selling Nigerian crude cheaper

oading data at ports have shown that due to an overhang of Nigerian crude at ports, International Oil Companies, IOCs, operating in the country have resorted to selling the country’s crude oil at cheaper prices. According to shipping data made available to SweetcrudeReports, an Indian tender had to take in some of Nigeria’s excess crude. We were told that major oil companies took some of Nigeria’s unsold crude oil into their refining system, while Angolan cargoes loading for August, were reported to have been sold out. As at early July, 40 cargoes of Nigeria’s crude oil booked for August

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Oil well head

Nigeria consumes over 17bn litres of PMS annually

P/12

Egina FPSO arrival in Nigeria suffers set back P/15

2017 July, SweetcrudeReports

Editor’s note

he Nigerian oil and gas sector is like a bottom-less pit when it comes to corruption and other shady dealings. That is what our cover story for this edition has shown. Almost 10 years after, we have stumbled on a confidential document showing how seven oil blocks were discretionally allocated by the office of the Minister of Petroleum Resources in 2008, 2009 and 2011. These dates fall into the period of the tenure of embattled former Petroleum Minister, Mrs. Diezani Alison-Madueke, in the ministry. Her tenure is noted for alleged wanton corruption, and it is not surprising that this would come up. Surprisingly, however, the name of Mrs. Iyabo Obasanjo-Bello, the daughter of Nigeria's former president, Olusegun Obasanjo, featured as a beneficiary of the secret award through her company, All Grace Energy. But of more concern is the fact that of the $414.45 million revealed by the document at our disposal as expected revenue from the discretionary allocations, only $231.79 million has been paid to date. $183 million remains outstanding and is due to the nation’s treasury. An investigation by the House of Representatives, which opened in June 2016, became inconclusive and mum has since become the word concerning

4 7 15

the illegal awards. Just as we were packaging the above for publication, Managing Director of ExxonMobil Nigeria, Mr. Paul McGrath, made a confession, admitting to Nigerian Content violations by his company. McGrath agreed though that compliance with the provisions of the Nigerian Content Act was a legal and moral obligation for operating and servicing oil and gas companies in the country, and pledged that ExxonMobil would henceforth comply with all provisions of the Act alongside associated regulations in the country. Also, information obtained by SweetcrudeReports indicated that Shell Nigeria has placed limits on Bonny Light exports. The peg we gathered, was due to the resumption of the Trans Forcados pipeline. We have also learnt that the multi billion-dollar Egina FPSO's arrival in Nigeria has suffered a set back, and it is now uncertain when the vessel will reach the country from Samsung Heavy Industries, SHI, shipyard in Geoje, South Korea. Please, turn the pages for details of all these and much more in this edition.

COVER

Nigeria: Seven oil licenses illegally awarded between 2008 & 2011

OIL

40 cargoes of Nigeria's crude for August loading unsold

FOCUS Power - For Abundant Living in Africa

16 19 26 30 32 34 38

GAS

40 43

TECHNOLOGY

Oil firms flare N23bn-worth of gas in one month

POWER

How Nigeria lost almost 48,000MW in June

FINANCE Nigeria’s crude oil, gas export revenue dips to $985m

LABOUR

Govt commends oil workers for normalcy in downstream, others

SOLID MINERAL

Stakeholders blast Kogi governor, others over plan to acquire Ajaokuta Steel

FREIGHT 87 maritime piracy incidents reported in first half of 2017 MOTORING

Volvo makes moves to be come electric car brand

Corrosion

COMMUNITY

Group launches petition for relocation of ExxonMobil headquarters to Akwa Ibom

EDITOR-IN-CHIEF Hector IGBIKIOWUBO EDITOR Chuks ISIWU ASSISTANT EDITORS Ike AMOS Toju VINCENT Eluonye KOYEGWUAEHI

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2017 July, SweetcrudeReports

Cover Story

2017 July, SweetcrudeReports

Nigeria: Seven oil licenses illegally awarded between 2008 & 2011 Iyabo Obasanjo-Bello benefited from deal How DPR shot itself in the foot

Oil well head OPEOLUWANI AKINTAYO

confidential d o c u m e n t o b t a i n e d recently by SweetcrudeRepo rts has shown how seven oil blocks were discretionally allocated by the office of the Minister of Petroleum Resources in 2008, 2009 and 2011. The expected revenue from the discretionary allocations, we found, was $414.45 million. Of this expected $414.45 million, only $231.79 million has been paid to date and $183 million remains outstanding and is due to the nation’s treasury. The signature bonuses per

concession over the period under reviewed range from $150,000 to $310 million. Of the $414.45 million expected for the seven discretionary allocations, three were awarded at $150,000 each to Afren Energy Services/Oriental, All Grace Energy and Green Energy Nigeria Limited. Under the Nigerian Petroleum Act, the Federal Ministry of Petroleum Resources, through the Department of Petroleum Resources, DPR, exercises its regulatory functions. The DPR was formerly known as the Petroleum Inspectorate, which was part of the NNPC. However,

f o l l o w i n g t h e commercialisation of the NNPC, the inspectorate arm was removed from the NNPC and renamed as the DPR. The responsibilities of the DPR include issuing permits and licences for all activities connected with petroleum exploration and the refining, storage, marketing, transportation and distribution thereof. The DPR is also responsible for the day-to-day monitoring of the petroleum industry. It supervises all the petroleum industry operations carried out under licences and leases in the country, with a view to ensuring compliance with the applicable laws and

regulations in line with good oil field practices. The DPR also establishes and enforces environmental regulations. Under the Licensing regime, DPR issues Oil Exploration Licence, OEL, permitting a licensee to explore for petroleum in the licence area for one year, renewable upon satisfaction of certain conditions. After the OEL, the licensee is given the Oil Prospecting Licence, OPL, which grants licensee exclusive rights of exploration. Duration is determined by the Minister. Lastly is the Oil Mining Lease, OML, granted to holder of OPL upon satisfaction of all conditions of the licence or the

Petroleum Act and having discovered oil in commercial quantity (i.e. a flow rate of 10,000 barrels per day, bpd). Duration is for 20 years, renewable upon fulfilment of prescribed conditions. However, one of the factors that have marred the process is discretionary allocation of oil blocks to unqualified bidders, who end up abandoning them for either lack of money or lack of expertise and technology to develop the fields, thereby denying the country revenues from the oil blocks. Also over the years, the process had been characterised by secrecy. According to the Petroleum Revenue Special Task Force, PRSTF, quoted in the Ribadu Report with Mallam Nuhu Ribadu as the Chairman and Olasupo Shasore (SAN ) as M e m b e r / S e c r e t a r y, t h e Department of Petroleum Resources, DPR, provided it with information indicating that 67 licenses were awarded between January 1, 2005 and December 31, 2011; with an outstanding balance of $566 million in signature bonuses. For the seven discretionary allocations reviewed, the Task Force found $183 million outstanding, due to the nation’s treasury. Summing up the outstanding $566 million from the 67 licenses awarded from 20052011, and the $183 million outstanding from the 7 discretionally awarded blocs, brings the outstanding to $749 million. “We were however informed that of the total $749 million outstanding in signature bonuses, $321 million was legally disputed”, according to the Ribadu Report. Signature bonuses are paid to the State in order to secure the rights to explore a certain oil and gas field or block. The amounts to be paid are determined by the Ministry of Petroleum Resources and collected by the DPR. T h e H o u s e o f Representatives as at June 2016, started investigation into the $566 million unpaid signature bonuses, leaving out the issue of discretionally oil blocs which Ribadu said were

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Cover

2017 July, SweetcrudeReports

Nigeria: Seven oil licenses illegally awarded between 2008 & 2011 CONTINUED FROM PAGE 4 illegally awarded. Although investigation into the unpaid bonuses is inconclusive yet, there has been no update from the House of Representatives to the public. In April, news broke that 51 OPLs and OMLs expired between 2010 and 2017, and that a additional 85 will expire between April 2017 and 2029. However, nobody has come out to say what the government is doing about retrieving oil blocs illegally awarded by past administrations. In his reaction to the report that oil blocks were awarded illegally, then Director of the Department of Petroleum R e s o u r c e s , M r. O s t e n Olorunshola, had said the president was empowered by law to make such discretionary allocations. In 2010, then Petroleum Minister Diezani AlisonMadueke said government was trying to “sort out some issues” surrounding the previous bid rounds before it starts fresh ones. The last public oil bid was conducted during President Olusegun Obasanjo’s regime in 2007. A player in the oil and gas industry, who craved for a n o n y m i t y, t o l d SweetcrudeReports that the government’s action

concerning discretional award of licenses discourages competition among indigenous oil operators and also sends wrong signals to international investors. But, Reverend David Ugolor, Executive Director, African Network for Environment and Economic Justice, ANEEJ, said discretionary allocations of oil blocks by a president in the country was not a new thing. “In any case, the development contravenes

Nigerian workers on the oil-drilling platform Baltic, about 25 miles offshore from the Niger Delta. allowed potential investors, both local and international, to make huge financial commitment in the sector. Nigeria is losing huge

Nigerians are also kept in the dark as to how much accrued to the country from the exercise. The unresolved regulatory issues have not allowed potential investors, both local and international, to make huge financial commitment global best practice of open competitive bidding and as such should be discouraged,” Ugolor said. “Nigerians are also kept in the dark as to how much accrued to the country from the exercise. The unresolved regulatory issues has not

resources from the dwindling investment in the sector and there is also loss of potential revenue from royalties,” he added. When SweetcrudeReports contacted the spokesman for the Nigerian Extractive I n d u s t r y Tr a n s p a r e n c y

Initiative, NEITI, Mr. Orji Ogbonnaya Orji, he said it is not the responsibility of NEITI to decide how oil bid rounds will be conducted. He, however, added that NEITI expects to be invited to observe the process in line with the country's constitution. Investigations revealed that the 67 discretionary allocations were in the marginal oil fields which were secretly given out to companies belonging to cronies, family members and associates. Former Group Managing Director of NNPC, Mr. Funsho Kupolokun, during his presentation to the Ad-hoc Committee of the House of Representatives investigating Oil Prospecting Licences, OPLs, and Oil Mining Leases, OMLs, granted by past administrations, said the committee needed to address the manner of allocation of the oil blocks given the fact that the law allows the minister to go by way of competitive bidding or using discretionary power.

However, industry experts have said secret allocations are against international best practices, and a slap on the face of the government’s declaration that the process of awarding oil licenses were to be done publicly through competitive bidding.

Iyabo Obasanjo-Bello benefitted from deal According to documents obtained from the Corporate Affairs Commission, CAC, Iyabo Obasanjo-Bello, the daughter of ex-President Olusegun Obasanjo, was one of the beneficiaries of the illegally distributed oil blocks. The document says she is the major shareholder of All Grace Energy, which was registered on July 12, 2006 with N30 million share capital. All Grace Energy was one of the companies listed in the Ribadu report as beneficiaries of the discretional allocation within the reviewed years. Mrs. Obasanjo-Bello has six million shares, followed by

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Cover

2017 July, SweetcrudeReports

Offshore oil rig

Seven oil licenses illegally awarded between 2008 & 2011 CONTINUED FROM PAGE 4 other directors/shareholders: Abe Magnus Ngei (2 million), Mrs Abiri Dorcas (3 million), Dr. Adenikinju Adeola (3 million), Ugbeya Donatus (1 million), Alabi Yekini (1 million) and Alhaji Abubakar Abdullahi (1 million). A source at DPR said that the process of awarding the oil blocks to Obasanjo-Bello's company actually started during her father ’s administration but “a disagreement between Shell and DPR over the area to farmout could not be reached until when the Malabu Oil block deal was sealed between the Federal Government and the multinationals.” However, the source did not confirm or deny that ObasanjoBello’s company was given the oil block but said the marginal fields were awarded based on some conditions which i n c l u d e d t h e development/execution of a public private partnership, PPP, model for three pilot projects under the small scale gas utilisation scheme.

How DPR shot itself in the foot Checks on DPR’s list of marginal field owners revealed just 30 companies officially registered and presently in

operations. Obasanjo-Bello’s All Grace Energy and other 29 were registered as “Already Producing Fields” however, reports coming from Ubima community in Ikwerre local government area of Rivers state, where the field is located, revealed there was no indication that such onshore project is being developed. According to CAC records, the company was registered “to operate marginal fields for the purpose of producing

petroleum, natural gas, liquefied petroleum gas etc,” but had filed annual returns only up to 2007. Investigations showed that each of Nigeria’s bid rounds in 2000, 2005 and 2007 drew less interest and fewer qualified bidders. The only contestants left by 2007 were small independents and indigenous players with low capacity. Only 57 percent of blocks offered in 2005 drew even a single bid; by 2007, the number was 40 percent. This

came at a time of strong global competition. In comparison, Libya's 2005 auction attracted 100 bids for 15 blocks. Nearly half of the awards in 2005 ended in default. Overall, it appeared that less than 50 contracts were signed on the roughly 175 blocks offered in 2000-2007. Acreage which in 2005 attracted signature bonuses of over $100 million, but saw bidders default, fetched less than $20 million when reoffered in 2006 and 2007. One

OPL netting government $76 million went for $6.5 million two years later. Compare this with Angola, which in the same period captured recordbreaking bonuses through open, well-managed bid rounds. Conduct of past bid rounds also undermined the stated goals of boosting local content and nurturing serious Nigerian operators. Of the 24 marginal fields awarded in the early 2000s, less than 10 have produced oil.

IOCs resort to selling Nigerian crude cheaper CONTINUED FROM PAGE 1 loading was said to have proven hard to get buyers. It was gathered that since Nigeria’s production had increased, there is excess crude oil supply for August loading. Nigeria’s crude oil exports quickly sprang to a high after unrest in the Niger Delta which had shut-in some of its exports. Our source said Chevron last week put up Nigeria’s crude from Agbami loading for Aug. 26-27 at dated Brent minus 30 cents a barrel. On its side, Reuters said Vitol was showing cargoes of Bonny Light and Forcados.

Shell is also retaining a large volume of Nigerian cargoes for its own refining system after failing to find buyers due to a global oversupply of light, sweet crude. The grades being kept by shell include Forcados, Bonga, Bonny Light and Akpo condensate, some of which is heading to the United States. ExxonMobil was reported to have offered Nigerian Qua Iboe at around dated Brent plus 85 cents a barrel but deal levels were still pegged at below dated Brent plus 50 cents a barrel owing to weaker Chinese demand and an oversupply of light sweet crude, according to Reuters. Sources also hinted that August loading for Angolan cargoes was nearly

sold out. Reuters had earlier reported that refiner Indian Oil Corp awarded part of its tender to Chevron with a cargo of Agbami loading Aug. 30-31 and it is also taking a VLCC from Total but grade details were not disclosed. Chevron also tendered to buy U.S. sour crude to fill a gap left by OPEC production cuts. India is also taking more sour Russian crude. The market reports that shortage of sour crude has led to buying of North Sea sour grades as well as heavy Angolan crude. Also in the first 20 days of Norwegian Grane August programme, the sour grade was said to have sold out.

Oil

2017 July, SweetcrudeReports

40 cargoes of Nigeria's crude for August loading unsold Shell says it's committed to transparency, to build trust

Crude oil vessel OPEOLUWANI AKINTAYO

orty cargoes of Nigeria’s crude oil booked for August loading is proving hard to get buyers, according to shipping and loading data made available to SweetcrudeReports. Oil trading sources told this Newspaper that the country’s already booked crude oil, over 1.6 million barrels, are hanging at the ports, as buyers now prefer Angola’s crude. Sources said Angola’s crude cargoes were quickly bought by the Chinese. Oil traders hinted that at least 40 unsold August cargoes of Nigeria’s crude are looking for buyers. We gathered that since Nigeria’s production had increased, there are excess crude oil supply for August loading. Nigeria’s crude oil exports quickly sprang to a high after unrest in the Niger Delta which had shut-in some of its exports cleared due mainly to recent government's peace initiatives in the region.

According to Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, Nigeria’s oil production which was recently around 1.6 million barrels per day, would hit 2 million barrels per day in August. After Nigeria reaches its expected mark, Kachukwu said the country would then join the Organisation of the Petroleum Exporting Countries, OPEC’s, cut deal. This is not the first time Nigeria’s crude oil would be reported to have been slow to find buyers. However, International Energy Agency, IEA, forecast has said excesses such as

This is really the peak demand season and it does not feel particularly strong in the crude oil market

Nigeria’s, will soon fade in few months’ time. The head of the IEA said increases by key producers could hamper the rebalancing. "It is still a buyer's market," said Olivier Jakob, analyst at Petromatrix. "This is really the peak demand season and it does not feel particularly strong in the crude oil market." Yet, Reuters’ report said some Nigerian crude grades for August are selling well, such as distillate-rich crude Forcados, and traders say the number of remaining Julyloading cargoes has dwindled to less than 10.

lobal oil giant, Royal Dutch Shell Plc, has reiterated its commitment to transparency as a means of building trust. The company revealed this in its ‘Report on Payments to Governments for the Year 2016’ where it revealed payment of $3.638 billion to the Nigerian government last year for its oil and gas exploration activities in the country. Nigeria’s revenue from the oil major was the highest out of the 31 countries to which Shell made payments last year. It said it paid $2.172 billion to the Nigerian National Petroleum Corporation, NNPC, as production entitlement. The oil major said $1.18 billion was paid to the Federal Inland Revenue Service as taxes, $160.71 million and $239,189 to the Department of Petroleum Resources, DPR, as royalties and fees, respectively, and $125.14 million to the Niger Delta Development Commission, NDDC, as fees. The company stated: “Tax binds governments, communities and businesses t o g e t h e r. R e v e n u e transparency provides citizens with important information to hold their government representatives accountable and to advance good governance. Shell is committed to transparency as it builds trust.

Pipeline leakages, low wellhead pressure drag down Nigeria's oil output

espite the Nigerian government's success in achieving relative peace in the Niger Delta region and ensuring security for oil production, pipeline leakages and low wellhead pressure dragged the nation's oil output down to 1.6 million barrels per day in April, the Nigerian National Petroleum

Corporation, NNPC, has said. The corporation stated this in its Monthly Production and Financial Reports for the month of April released in Abuja, which noted that Nigeria’s 1.6 million barrels per day oil production during the month showed a some 12.04 percent decline from its February 2017 production. The report added that

despite the government’s continuous engagements with militants in oil-rich Niger Delta, some of the issues that still dragged down production during the period were incessant deferred production due to leakages in the Trans Niger Pipeline, TNP, and Nembe Creek Trunk Line, NCTL, as well as leakages and low wellhead pressure at QuaIboe Terminal.

Leaking oil pipeline

2017 July, SweetcrudeReports

Oil

Fuel depot

Nigeria govt fails to enforce July 1 ban on dirty fuel imports

he Nigerian government’s ban on the importation of dirty fuels into the country failed to come into effect on July 1, 2017 as announced in December last year. A report by Public Eye in September last year exposed how European trading companies were exploiting the weak regulatory standards in West African countries, allowing for the exportation of fuels with sulphur levels up to 300 times higher than was permitted in Europe. On December 1, 2016 in Abuja, five West African countries, including Nigeria, Benin, Togo, Ghana and Cote d’Ivoire, agreed to ban the importation of Europe’s dirty fuels, limiting sulphur in fuels from 3,000 parts per million to 50 ppm. The then Minister of Env ironment , Mrs. A mina Mohammed, said the enforcement of the ban in Nigeria would begin from July 1, 2017. Mohammed stated that the Federal Government had decided that the sulphur in fuels imported into the country should be reduced from 3,000 parts per million to 50 parts per million, as this would result in major air quality benefits in Nigerian cities and would allow the country to set modern vehicle standards. “From July 1, 2017, we will commence the enforcement of the 50ppm sulphur in fuel. And the July deadline is on all fuels, your diesel, petrol and kerosene. Everybody knows that this is going to take some efforts, which is why we gave the six months’ notice. What is more important is that we are working with the

refineries on a long-term approach,” Mohammed, who has since moved on to a role in the United Nations, had said. She added that, “Some of the new refineries that are coming into position in Nigeria are coming in at 10ppm; South Africa is 15ppm. But for us, it is a West African problem and we hope that we can lead in West Africa by reducing it. So, there is no reason why we can’t do that.” According to the Standards Organisation of Nigeria, the case for 100 ppm was made for the 2015/2016 fuel specifications, but the levels w e r e maintained at 3,000 ppm for diesel; 1,000 p p m f o r P r e m i u m Motor Spirit (petrol); and 1,000 ppm for Household Kerosene. Compared to other parts of the world, such as Europe and North America, fuel quality in many African countries, including Nigeria, is very poor. European standards for fuel quality include Euro IV (50 ppm for petrol and diesel) and Euro V (10 ppm). According to the United Nations Environmental Programme, the move to ban dirty fuel imports by Nigeria and others will dramatically reduce vehicle emissions and help more than 250 million people to breathe safer and cleaner air. When contacted, the Assistant Director, Press, Federal Ministry of Environment, Mr. Atuora Obed, could not comment on the issue, saying, “My director is not

around now.” The Nigerian National Petroleum Corporation, NNPC, is a major supplier of imported petroleum products in the country, supplying at least 50 per cent of the products in the market. The Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, said that he was aware that at the refineries, measures had been put in place to control quality to ensure that “we keep to the internationally acceptable sulphur content.”

According to the United Nations Environmental Programme, the move to ban dirty fuel imports by Nigeria and others will dramatically reduce vehicle emissions and help more than 250 million people to breathe safer and cleaner air “But as regards imported products, I will find out from the unit responsible for it,” he said. No update had been received as of the time of filing this report. Platts reported last month that the subject of

CONTINUED 0N PAGE 09

Local refineries could be obsolete in four years, says Kachikwu Artistic impression of a small refinery

he Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has said the nation's three refineries in Warri, Kaduna and Port Harcourt could become obsolete in the next three to four years, hence the move by the government to repair and upgrade them. Speaking at the 5th Triennial National Delegates’ Conference of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Kachikwu stressed that no attempt had been made to sell the nation’s refineries. “There has been no attempt, no approval to concession refineries or sell. What we have approval for is to bring financing mechanisms that enable us to find the resource to upgrade the refineries.

"In their present epileptic nature, they would probably be obsolete in the next three to four years. The reality is that once the private sector players begin to build their own refineries, whatever we think we are concessioning, will disappear. Unless we move very quickly to reposition those refineries in such a way that they can compete, we would lose the refineries completely,” he said. Kachikwu stated that the financing mechanisms for the refineries would pass through the board of the Nigerian National Petroleum Corporation, NNPC, in a competitive and transparent manner, adding that all the processes would be done with the management of the refineries and NNPC in place. The minister declared that oil and gas are changing transformatively with the tumbling of prices below $46 despite the intervention of the Organisation of Petroleum Exporting Countries, OPEC.

2017 July, SweetcrudeReports

Oil

ExxonMobil boss admits to Nigerian Content violations ...NCDMB warns against single sourcing, selective tendering

Welding and fabrication OSCARLINE ONWUEMENYI, Abuja

ompliance with the provisions of the Nigerian Content Act is not only a legal and moral obligation for operating and servicing oil and gas companies but also a good strategy for improving profitability and sustainability of operations, the Managing Director of ExxonMobil Nigeria, Mr. Paul McGrath, has said. McGrath, who spoke when he received the management of the Nigerian Content Development and Monitoring Board, NCDMB, led by the Executive Secretary, Engr. Simbi Wabote, promised that ExxonMobil will collaborate with the Board to achieve its mandate, assuring that “together we can transform things.” Admitting that the company had defaulted in complying with some provisions of the Act in the past, McGrath who was appointed in March 2017, assured that the oil giant would henceforth comply with all provisions of the Act alongside associated regulations. He added that the company would also seek the Board’s guidance and assistance when faced with difficulties and

exigencies of business. “The new leadership has zero tolerance for Nigerian Content violations and non-compliance issues. If we must do, we have to first discuss with NCDMB for guidance.” He also underscored the collaboration ExxonMobil had enjoyed from the NCDMB overtime, which contributed to the company’s successes. Speaking further, the MD pledged the company total s u p p o r t f o r t h e B o a r d ’s initiatives, stating that it is open to staff exchange between the two organisations and is working to open a liaison office in the Board’s new headquarters when completed in Yenagoa, Bayelsa State. In his presentation, Engr. Wabote explained that the visit was in line with the Board’s efforts to encourage and support operating companies to introduce and execute new projects needed to sustain and grow Nigerian Content in the oil and gas industry. He reiterated the Board’s determination to shorten the industry contracting cycle, which informed the adoption of definite timelines for statutory approvals and pioneering the development and use of Service Level Agreements, SLAs.

The first SLA was signed between the Board and the Nigerian Liquefied Natural Gas Company, NLNG, and it commits the parties to comply with Nigerian Content Act and timely approvals of documents respectively. The model will soon be replicated with other operating companies. Wa b o t e a l s o a d v i s e d ExxonMobil to begin early to engage the Board on the development of its Owowo field

to enhance utilization of incountry capacities. S p e a k i n g f u r t h e r, t h e Executive Secretary cautioned operating companies against engaging in single sourcing and selective tendering, stressing that reasons for such must be justifiable and discussed with the Board ahead of execution. He also warned companies against irregular spot hiring and utilization of vessels under the

guise of emergency. On the status of the Nigerian Content Intervention Fund, NCIF, Wabote explained that disbursement to deserving companies was yet to start because the Board is working to perfect the governance process. He added that the Funds would only be disbursed through a banking process, after proper risk assessments so as to create the needed confidence and trust.

Nigeria govt fails to enforce July 1 ban on dirty fuel imports CONTINUES ON PAGE 8 an announced fuel specification change was holding up the country’s much-delayed direct sale of crude oil and direct purchase of products’ programme for 2017, citing trading sources. It said the NNPC and government officials had previously said that from July 1, the specification of petrol imports would change to 150 ppm sulphur maximum from 1,000 ppm. Under the DSDP model, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for delivery of an equal value of petrol and other refined products to the NNPC. The scheme, which started in April 2016, usually covers a period of 12 months, although the 2016 programme has already been extended. A civil rights organisation, Africa Network for Environment and Economic Justice, had raised

the alarm that two companies based in Switzerland, Vitol and Trafigura, are allegedly engaged in the importation of dirty fuel to Nigeria. The ANEEJ advised the government to “work closely with the National Assembly and help to activate all environmental laws that will check the illegitimate business activities of Vitol and Trafigura.” The Executive Director, ANEEJ, Rev. David Ugolor, at a press briefing in Abuja, challenged the Federal Government to pay serious attention to the dangers posed to the health of the citizens by the development. He also suggested that there should be an increase in the oversight function of regulatory bodies like the Petroleum Products Pricing Regulatory Agency, while a task force should be set up in the West African sub-region to embark

2017 July, SweetcrudeReports

Oil

Shell installation

Shell places limit on Bonny light export OPEOLUWANI AKINTAAYO

nformation obtained by SweetCrude Reports indicates that Shell Nigeria, the operator of Bonny export terminal, has placed limits on crude oil exports from the Bonny pipeline. A source close to the company and shipping schedule, told this Newspaper that the peg was due to the Trans Forcados pipeline which resumed exports last month. ? According to him, Shell wants Forcados to recover from the long term shutdown. Nigeria’s production is recovering after Shell lifted restrictions on shipments of Forcados crude oil, a key export grade, following a disruption that lasted 472 days. The return of Forcados may add as much as 250,000 barrels a day of light and sweet crude into the Atlantic. While Shell subsequently placed limits on shipments of Nigeria’s Bonny Light crude, the return of Forcados occurs just as local refiners are overwhelmed with similar grades from the US, North Sea and Africa, our source said. If Nigeria does not quickly regain its market share, similar products,

particularly from the US shale producers, might soon replace it, the source added. The source, however, did not disclose how many barrels are being limited from export. Nigeria’s oil production will soon hit 1.8 million barrels per day due to Forcados coming back on stream. According to a statement issued by Shell last month, Nigeria’s oil exports is now

back fully for the first time in 16 months since its shutdown. However, the down-turn for Nigeria would be its joining of OPEC cut deal once production hits the 1.8mbpd target. OPEC producers agreed last

Civil societies kick against PIGB over host communities, issues

number of Civil Society Organisations, CSOs, have kicked against the Petroleum Industry Governance Bill, PIGB, recently passed by the Senate, saying it failed to adequately address environment issues and rights of host communities. The CSOs, coordinated by the Social Development Integrated Centre (Social Action), kicked against the PIGB at a news conference in Abuja. The participants included Civil Society Legislative Advocacy Centre; Zero Corruption Coalition; Socialist Workers League; Global Rescue Mission; and Keen and Care I. The Director, Social Action, Dr. Isaac Asume-

month to extend output cuts of about 1.8 million bpd until March 2018. Forcados had been under force majeure since February 2016 after a militant attack on it. In our e a r l i e r r e p o r t , SweetcrudeReports gathered

A gas flare looming over Akaraolu community in the Niger Delta Osuoka, who read the text of the briefing, accused the National Assembly, specifically the Senate, of an “attempt to legalise the appropriation of national oil and gas assets to some powerful private interests.” The CSOs argued that the creation of new institutions by the bill without first making adequate provisions for their operations did not make sense. They noted that, “the ill-advised separation of a hitherto comprehensive bill into bits has created a sufficient setback to a holistic and more effective effort to revamp the oil sector in Nigeria for the benefit of citizens”.

that TFS resumed sometime between May 15 and 20, 2017, but most companies involved have been quiet about it. The facility is being operated by Shell, and ten Nigerian independents: Seplat, Elcrest, Shoreline, Neconde, S h e l l P e t r o l e u m Development Company, Pan Ocean, NDWestern, Pillar, Midwestern, Energia and Platform. Until it was shut down in February 2016, Forcados was the only pipeline through which the likes of Seplat, Elcrest, Shoreline, Neconde, Pan Ocean and NDWestern, e x p o r t e d t h e i r products.? However, the likes of Pillar Oil, Midwestern, Energia and Platform Oil, used it as a secondary export line. ? Within the period that the shut-in lasted, we gathered that Seplat, Elcrest, Neconde and Shoreline, had sourced for alternative routes of exporting like through shipping. Forcados came back up last November, nine months after the original blast, but it was immediately vandalised again, by oil militants. Meanwhile, the oil market has continuously expressed fear over the return of Nigeria’s oil into the Atlantic.

Oil

2017 July, SweetcrudeReports

Oil

2017 July, SweetcrudeReports

Nigeria could lose billions over Bonga Southwest, Bonga North projects -Report CHUKS ISIWU

igeria could end up losing funds so far invested in t w o k e y projects, the Bonga Southwest and Bonga North projects, over climate targets. This is according to a report, which showed that oil majors, including Royal Dutch Shell and ExxonMobil risk wasting more than a third of their budgets on projects that would not be needed if climate targets are to be met. The report by the Carbon Tr a c k e r t h i n k t a n k a n d

institutional investors showed that over $2 trillion of planned investment in oil and gas projects by 2025, including the two projects in Nigeria being promoted by Royal Dutch Shell, could be redundant if governments stick to targets to lower carbon emissions to limit global warming to 2 degrees Celsius. Specifically, the report, quoted by Reuters, listed five of the most expensive projects that are affected to include the extension of Kazakhstan's giant Kashagan field and Bonga

Congo to launch new incensing round in October

he Republic of Congo plans to offer new acreage under a licensing round that would be unveiled in October It is a follow up to a previous deep-water licensing exercise that is yet to be concluded. The country's Hydrocarbons

Oil rig

Minister Jean-Marc Thystere Tchicaya is expected to announce modalities for the new licensing round in October. Of the several companies that lined up for the deep-water acreage on offer in the previous licensing round, only seven confirmed interest the acreage. They are currently negotiating the final terms of the production sharing contracts with the government, Thystere Tchicaya, officially launched a new oil and gas licensing round on October 28, 2015. The licensing round was originally expected to be completed in 2016. Some ten onshore and offshore oil blocks were to be made available, including blocks in the Coastal and Cuvette Basins. The government indicated that the licensing round is to be governed by the new Petroleum Code.

Bonga facility Southwest and Bonga North in Nigeria, saying they will not be needed if the global warming target is to be met. It compared the carbon intensity of oil and gas projects planned by 69 c o m p a n i e s w i t h requirements needed to meet the warming target set by the 2015 Paris agreement, which will require curbing fossil fuel consumption. It found Exxon, the world's top publicly-traded oil and gas company, risks wasting up to half its budget on new fields that will not be needed, according to the report quoted by Reuters. Shell and France's Total would see up to 40 percent of their budgets misspent. Fossil fuel producers have come under growing pressure from investors to reduce carbon emissions and increase transparency over future investment. Sweden's largest national pension fund, AP7, one of the authors of the report, said last week it had wound down investments in six companies, including Exxon,

which it said had violated the Paris agreement. Top energy companies have voiced support for the Paris agreement reached by nearly 200 countries. Many of them have urged governments to impose a tax on carbon emissions to support cleaner sources of energy such as gas. US President Donald Trump said this month he would withdraw the United States

Saudi Arabia's state-run Aramco, widely considered the lowest cost oil producer, would see up to 10 percent of its production rendered uneconomical, the report said

from the Paris accord which he said would undermine the US economy. Around two thirds of the potential oil and gas production which would be surplus to requirement is controlled by the private sector, "demonstrating how the risk is skewed towards listed companies rather than national oil companies", the report said. Saudi Arabia's state-run Aramco, widely considered the lowest cost oil producer, would see up to 10 percent of its production rendered uneconomical, the report said. The report's authors said their discussions with oil companies had shown the companies wanted to remain flexible to respond to future developments and possible changes in the oil price. Companies including Shell and BP have rejected the idea that assets could end up redundant, saying the reserves they hold are too small to be affected by any long-term decline in demand.

Oil

2017 July, SweetcrudeReports

MKPOIKANA UDOMA, Port Harcourt

government is not meeting up with their part of the JV funding; although the Minister of State for Petroleum, Mr. Ibe Kachikwu, has come up with an alternative where JV partners, especially the operators will look for money elsewhere to operated and later get their money back from production, we need that to be implemented." In her remark, the Port Harcourt Zonal Operations Controller of DPR, Mrs. Chioma Njoku, said the agency as a regulator remains a partner to the rig owners and operators in achieving their goals and aspirations not only commercial goals but also safety for personnel and adherence to global industry practices. Njoku urged the rig owners and operators to consider how they can balance performance, safety and cost whilst remaining profitable. "The DPR as Nigeria's oil and gas regulatory agency will continue to show leadership towards the common goal of working efficiently and cost effectively, while ensuring

ig owners have lamented the high cost of maintaining idle rigs as a result of low activities in the upstream petroleum sector, due to low oil price and lack of counterpart funding from the Federal Government. The rig owners want the government to implement the alternative funding mechanism approved last year for Joint Venture partners (operators) to be able to get funds to operate assets in order to increase crude oil output and ensure the operators get their money back from production. Recall that the new funding mechanism, according to the Federal Government, is expected to eliminate the often difficult cash call regime, which has plagued the oil industry for over a decade, significantly stalling growth in the economy. Chairman, International Association of Drilling Contractors, IADC, Nigerian Chapter, Mr. Ote Enaibe, at the 2017 Annual Rig Owners and Operators Meeting organised by the Department of Petroleum Resources, DPR, in Port Harcourt, said the cost of maintaining an idle rig when there is no work is as expensive as operating a rig when active. Enaibe explained that many rigs have become cold-stacked as a result of no job, thereby increasing unemployment because a single rig when active generates employment for a total of 150 people. He explained that if nothing is urgently done, the industry may suffer, as there will be short cuts and contractors may cut corners, which means rigs that are supposed to work efficiently at 95 to 97 percent operational efficiency may end up operating at 70 percent efficiency. He further stated: "In the last two years, we have seen our members incur cost as a result of no work and as we keep our equipment idle it becomes less efficient just like parking a generator without using it for a long time. So, maintenance of rigs while we have no work is as expensive as operating a rig when there is work. “A lot of rigs are cold stacked, that is, the rigs are not maintained but just kept; if we have to warm-stacked them, that will involve running them regularly, buying diesel and employing people to keep it running so that if there is work, the rig can easily be deployed. But now we can't even keep them running because there is no job. He continued: “This equipment whether they are in use or not (just like car tyres) after a certain number of years will expire, and these equipment cost hundreds of thousands of dollars, for example the Blow-out Preventers, which are very expensive whether they are in use or not you must change them every five years. So whether you only used them for two years

Oil rig

Rig owners want govt to implement alternative funding policy for JV operators and park them for three years, they must be changed. So where do we get $250,000 to change an equipment when we have not

had work for the past two to three years?" “What is killing us in the industry is counterpart funding;

We need to strengthen various options of evaluating our rigs such as enhanced inspection and wear technology to improve rig integrity, evaluation of our helipads, more friendly operational manual with the end user in mind

integrity and safety all times in the operating environment. “We need to strengthen various options of evaluating our rigs such as enhanced inspection and wear technology to improve rig integrity, evaluation of our helipads, more friendly operational manual with the end user in mind. There must also be an improved energy management on our rigs.”

Nigeria consumes over 17bn litres of PMS annually

Fuel dispenser

uditing firm, PricewaterCooper, PwC, has said that Nigeria consumes over 17 billion Premium Motor Spirit, PMS, otherwise known as petrol. According to one of its publication, Nigeria’s Refining Revolution, out of the over 17 billion litres of PMS consumed annually, transportation and power are the major drivers of demand for the product. Nigeria currently imports over 90% of PMS used in the country, and according to the auditing firm, the trend is likely to continue in the future. Nigeria’s imported PMS is primarily sourced from North Western Europe and United States. West Africa consumes over 22 billion litres of PMS annually. In the area of Automative Gas Oil, AGO, known as diesel, the report also said the Country consumes over 3 billion litres yearly. It said that the erratic state of the country's power sector has been the major driver of AGO demand. The power sector is currently plagued by a plethora of challenges, increasing the demand for self-generation options such as AGO-powered generators. Nigeria currently imports about 60% of AGO consumed in the country. West Africa consumes about 11 billion litres of AGO annually, while imports currently account for over 70% of AGO supplied to the region, the report stated. PwC also said Nigeria consumes over 400 million litres of aviation fuel annually, most of which is primarily sourced from the United States. In 2014, Nigeria was the second largest importer of US aviation fuel in the world.

Oil

2017 July, SweetcrudeReports

Nigeria loses $6bn to oil infrastructure vandalism in 5 years

Vandalised part of Escravos-Lagos pipeline MICHAEL JAMES

inister of State for Petroleum Resources, D r . I b e Kachikwu, has revealed that Nigeria lost a whopping $6 billion to vandalism of oil and gas infrastructure in the last five years. The minister, who lamented that Nigeria had been plagued with a continuous import cycle of 92 per cent of its daily fuel consumption, also disclosed that the country spends $28 billion in foreign exchange annually on petroleum products importation. Making these revelations at the recent African Modular Refinery forum in Abuja, organised by the Modular Refiners Association of Nigeria, MRAN, in partnership with the Department of Petroleum Resources, DPR, Kachikwu did not give details of the $6 billion loss to vandalism. The Federal Government last month celebrated three months of not witnessing pipeline vandalism from militant activities in the Niger Delta, but the nation had in the last five years seen ferocious attacks on oil and gas facilities, leading to the $6 billion loss. One the affected facilities, the

Shell Nigeria-operated Forcados pipeline, returned to operation only two weeks ago, after production was disrupted for months following repeated attacks by Niger Delta militants. Besides the loss to oil infrastructure vandalism, the minister also stated that Nigeria incurred subsidies for petrol and kerosene estimated at $65 billion from 2011 to 2015. According to the minister, had the $65 billion loss to fuel subsidy been properly applied, it would have been able to finance and actualise the Vision 20:2020 target of 50 per cent national refining capacity of crude oil produced in Nigeria, to stimulate employment and economic growth, and ensure significant reduction in the foreign exchange expenditure for petrol imports. He lamented that despite the country’s four refineries, Nigeria had been plagued with a continuous import cycle of 92 per cent of its daily fuel consumption. Despite these challenges, the minister said he was focused on the objective of ensuring the nation attained 50 per cent domestic refining capacity by the fourth quarter of 2018 and 100 per cent capacity by the

He lamented that despite the country’s four refineries, Nigeria had been plagued with a continuous import cycle of 92 per cent of its daily fuel consumption

fourth quarter of 2019. On the cost of fuel importation to the country, Kachikwu said Nigeria spends $28 billion in foreign exchange annually on that and that a significant percentage of the amount was being spent on funding the logistics of the importation. “The foreign exchange requirement for importation of petroleum products is estimated at $28 billion (N3.35 trillion) annually, with 40 per cent of the total amount (N1.34 trillion) dedicated to financing the logistics of importation,” Kachikwu said.

NNPC secures $2bn discount from renegotiated upstream contracts

he Nigerian National Petroleum Corporation, NNPC, has secured $2 billion discounts in the last one year from renegotiated upstream contracts being executed by its various service providers. The corporation said the feat was achieved in the quest to continually push down the high cost of production in the industry. This was made known by NNPC Group Managing Director, Dr. Maikanti Baru, in a podcast message to the Corporation’s Staff to mark One-Year Anniversary of his appointment as the Corporation’s helmsman. Dr. Baru, who took over the mantle of leadership of NNPC from the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, July 4 2016, said already NNPC had lowered operating costs of production from $27/barrels to $22/barrels. “For the Upstream, cost reduction and efficiency are key features that we will pay attention to”, Dr. Baru stated in the 25-minute podcast. Dr. Baru directed that focal points for efficiency in each of the Corporation’s Autonomous Business Units, ABUs, and Corporate Services Units, CSUs, should be identified to ensure the realization of the key performance indicators enshrined in the 2017 budget, adding that the Corporation must attain a six-month contracting cycle.

Oil

2017 July, SweetcrudeReports

Oi rig

How Nigeria’s oil reserves remained almost stagnant in four years OPEOLUWANI AKINTAYO

igeria’s proven c r u d e o i l reserves was almost stagnant for four years, from 2012-2016, with just 1.1 percent change. This is according to fresh data g a t h e r e d b y SweetcrudeReports. The data from the Organisation of the Petroleum Exporting Countries,OPEC’s, Annual Statistical Bulletin 2017, shows that Nigeria, with over 177 million population in 2016, had 37.139 billion barrels of crude oil reserves as at the end of that year. The bulletin also showed that total world proven crude oil reserves stood at 1.492 trillion barrels at the end of 2016, increasing slightly by 0.3 percent from the previous year’s level of 1.488 trillion. The largest additions came from Iraq, Venezuela and Norway. Total OPEC members’ proven oil reserves increased by 0.5 per cent to 1.217 trillion barrels at the end of 2016, with a share of 81.5 per cent of total world crude oil reserves. In 2016, proven natural gas reserves increased by 0.4 percent at approximately 200.5 trillion standard cubic metres, the bulletin also reported. This increase in natural gas reserves, according to the report, came on the back of new

discoveries in the Middle East and Africa, almost solely relating to OPEC members. The report indicated that in 2013, Nigeria’s crude oil reserves were 37.071 billion barrels. In 2014, the reserve increased a bit to 37.448 billion barrels while in 2015, it dropped to

37,062 billion barrels. In 2016, the reserves increased to 37.453 billion barrels, an addition of 391 million barrels. However, despite Nigeria’s challenges with militancy in the Niger Delta during the year, the country was the only one to have recorded the any

increase in its oil reserve amongst other African countries. According to the OPEC data, the likes of Algeria did not increase its oil reserves from 2012 to 2016. The country’s reserve within those years remained at 12.2 billion barrels. Angola’s reserves hovered

Global oil sector loses $300bn to non-investment in 2015 and 2016

he global oil and gas sector has lost over $300 billion due to fall in oil and gas exploration and production spending in 2015 to 2016, according to the Organisation of the Petroleum Exporting Countries, OPEC’s, Secretary-General, Mohammed Sanusi Barkindo. Barkindo, who revealed this in a statement in London, said the gravity of the sharp contraction in oil industry investment, had been underscored in the fact that, in both 2015 and 2016, a dramatic rationalisation of projects was witnessed. According to him, the international oil industry cannot afford to see investment levels fall for a third year in a row, pointing out that global oil and gas exploration and production spending fell by around 26 per cent in 2015 and a further 22 per cent in 2016. “Combined, this equates to above $300 billion. This has impacted new projects coming on-stream and new discoveries too,”

he affirmed. He stressed that stability in the oil market today was also vital for stability in the future, given that the oil industry was very much a medium- to long-term business. “Moreover, the industry remains a growth business. We see the world requiring more oil in the years ahead. Oil will remain a fuel of choice for the foreseeable future,” he maintained. In OPEC’s latest World Oil Outlook (WOO), oil was still expected to supply over 26 percent of the world’s energy demand by 2040. Oil demand increased by around 17 million barrels/day between 2015 and 2040 to reach close to 110m b/d, he observed. “This will require significant investments. And new barrels are needed to not only increase production, but also to accommodate for decline rates from existing fields,” he said.

around same figure during the period. The country, Africa’s second largest oil producer after Nigeria, had 9.055 billion barrels reserves in 2012, 9,011 billion in 2013, 8.423 billion barrels in 2014, 9.524 billion in 2015, and 9.523 billion barrels in 2016. Egypt had a non-growing reserve, maintaining 4.400 billion barrels reserves throughout the period under review. Gabon followed suit, maintaining 2 million barrels throughout the four years. Next was Libya, which changes were also not significant enough to be put into percentage. The country’s official data showed that its reserves were 48.472 billion barrels in 2012, 48.363 billion barrels in 2013, 48.363 billion barrels in 2014, 48.363 billion barrels in 2015 and same 48.363 barrels in 2016. Sudan also did not increase its reserves, maintaining 5 billion barrels throughout the four years. Other African countries’ reserves were not strong enough to make important mention, as they were summed up under ‘others’, with reserves at 10.025 billion barrels in 2012, 10.025 billion barrels in 2013, 9.420 barrels in 2014, 9.420 barrels in 2015, and 9.420 billion in 2016.

Focus

2017 July, SweetcrudeReports

Power - For Abundant Living in Africa

Power substation

360-Degree View from Houston - the Energy Capital of t h e Wo r l d : Considering the Economic, Political and Community perspective of U.S. Africa trade relationship There have been several U.S. programmes and initiatives to promote the development of Africa since the end of colonialism and the dawn of independence in the 1960’s. Beginning with President Kennedy who established the Peace Corps, the U.S. has sought to utilise its foreign assistance to help improve the lives of the peoples of Africa. In addition to the development funding from the U.S. and other Western nations and more recently from Asia, Africa has also received billions of dollars from the World Bank and the African Development Bank. Organisations such as the Ford Foundation, Rockefeller Foundation, the Aga Khan Foundation have also contributed large sums of money for targeted programs. These funds programmes range from village wells, malaria and HIV & AIDS, maternal health, education, housing and infrastructure. However, despite

50 plus years of funding from the World Bank, Africa remains severely under developed and known as “the dark continent”. This is because over 600 million people in sub-Saharan Africa or 70% of the population do not have reliable electricity. The images from space of Africa at night shows a continent completely wrapped in darkness except for a smattering of lights in South Africa, the top edges of north Africa and the edges of west Africa – which includes light from the flaring of natural gas. There have been laudable Africa initiatives launched recently by U.S. Presidents including the African Growth and Opportunity Act by President Clinton, the Bush Administration’s President's Emergency Plan for AIDS Relief, and President Obama’s Power Africa initiative which promoted development of 30,000 Mega Watts of power for 60 million new connections by the year 2020. President Obama also signed into law the Electrify Africa Act. This law directs the President to establish a multi-year strategy to assist countries in sub-Saharan Africa in implementing national power strategies including renewable energy.

Without reliable electricity, millions of people in Africa cannot use as lights, cellphones and computers. They cannot refrigerate foods or medicines. The high cost of energy in subSaharan Africa also makes producing goods for export almost impossible. As Mozambique’s President Filipe Jacinto Nyusi, said at the recent Corporate council on Africa’s Investment Summit, “We don’t want energy just to light houses. We need energy for industrialisation.” All of the 54 counties of Africa only produces 1% of the U.S. total imports. Without power, all the development funding spent

However, despite 50 plus years of funding from the World Bank, Africa remains severely under developed and known as “the dark continent”

the last 50 plus years can only have limited sustainable results. The World Bank and other development agencies should consider a radical approach of focusing all their resources on power projects. Because without power, it is not possible to live an abundant life. By SAM SMOOTS Mr. Smoots is President of MBE Global, LLC, a U.S.-based procurement company. He was also Africa Director for the Overseas Private Investment Corporation.

Egina FPSO arrival in Nigeria suffers set back

t is unclear when Total’s Egina FPSO will sail away from Samsung Heavy Industries, SHI shipyard in Geoje, South Korea to arrival Nigeria following an accident which led to multiple fatalities. The accident has forced Total to delay two of its offshore development projects (Egina inclusive) to varying degrees. However, Executive Vice President of Samsung, Mr Younsang Won earlier revealed that the ongoing construction of the multi-billion dollar Egina Floating Production Storage and

Offloading (FPSO) project will arrive Nigeria in August 2017. Younsang Won stated this when the Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside paid a working visit to Samsung Shipyard in the Samsung Heavy Industries in Geoje, South Korea. Younsang did not disclose the actual date the FPSO will sail-away from South Korea but earlier media report indicated that the sail-away might likely be in June.

Gas

2017 July, SweetcrudeReports

Oil handling facility

Oil firms flare N23bn-worth of gas in one month IKE AMOS, Abuja

igeria lost $ 6 3 . 3 4 5 million (about N 2 3 . 4 3 8 billion) to gas flaring as oil and gas firms operating in the country flared 20.50 billion standard cubic feet, SCF, of gas in April 2017. The Nigerian National Petroleum Corporation, NNPC, in its latest financial and operations report, disclosed that the volume of gas flared in April declined by 4.52 per cent when compared to the 21.47 billion SCF flared in the preceding month. The NNPC puts the price of natural gas at $3.09 per 1,000 SCF,while the dollar is currently exchanged at an average of N370 to a dollar. However, the volume of gas flared in the month under review, appreciated by 22.75 per cent when compared to 16.70 billion SCF flared in the same period in 2017. Giving a breakdown of total

gas commercialisation and utilisation in the month of April, the NNPC stated that out of the 242.26 billion SCF of gas supplied in the month, a total of 141.51 billion SCF was commercialised, comprising of 33.02 billion SCF and 108.49 billion SCF for the domestic and export market respectively. This, according to the NNPC, translates to an average daily supply of 1.1 billion SCF per day of gas to the domestic market and 3.616 billion SCF per day of gas supplied to the export market. “This implies that 58.42 per cent of the total gas produced was commercialised while the balance of 41.58 per cent was either re-injected, used as upstream fuel gas or flared. Gas flare rate was 8.46 per cent for the month of March 2017, that is 683.44 million SCF per day compared with average gas flare rate of 9.67 per cent, that is, 682.66 million SCF per day, for the period April 2016 to April 2017,” the report said. In the domestic gas category,

20.15 billion SCF was supplied to the power sector; 12.87 billion SCF was supplied to industries.

In the export category, 0.72 billion SCF was supplied to the West African Gas Pipeline Company; 5.72 billion was

Nigeria spends N23bn on importation of gas turbines

igeria imported gas turbines for electricity generation valued at N22.607 billion in the first quarter of 2017, according to data obtained from the National Bureau of Statistics, NBS. The NBS, in its First Quarter 2017 Foreign Trade Statistics, disclosed that the amount was expended on the acquisition of 5,000 kilowatts, KW, turbines from four different countries. Specifically, gas turbines valued at N21.44 billion were imported from Germany; the United States sold gas turbines valued at N1.248 billion to Nigerian companies; while N0.792 million gas turbines were imported from India. Nigeria's defence on imported gas turbines will be redressed beginning from next year when US multinational company, General Electric, GE, will commence the operation of a gas turbine assembly plant in the country. Chief Executive Officer, GE Nigeria, Mr. Lazarus Angbazo, revealed recently that the company had invested over $100 million on the plant and that construction work on the plant, which is located in Calabar, Cross River State, would be completed in December. According to him, GE wants to support the development of Nigeria’s gas reserve, which is largely untapped, and has invested in some local power plants. Officials said demand for gas in the country was estimated to rise to three billion standard cubic feet per day by 2017 from 1.2 billion scf per day in 2015, 10 times the 300 million scf of eight years ago.

utilised by the Escravos Gas to Liquid project; while Natural Gas Liquid/Liquefied Petroleum Gas, NGL/LPG, and Nigeria Liquefied Natural Gas, NLNG, utilised 3.22 billion SCF and 98.84 billion SCF respectively. In the category of noncommercialised gas, the report stated that 68.36 billion SCF of gas was reinjected; 11.89 billion SCF was used as fuel gas; while 20.50 billion SCF was flared. The report also revealed that in the first four months of the year, a total of 87.16 billion SCF of gas was flared, translating to a loss of $269.32 million, about N99.65 billion to the country. This was in comparison to 79.51 billion SCF of gas flared in the first four months of 2016, translating to a loss of $245.686 million, about N90.904 billion. However, in the last four months of 2016, from September to December 2016, 90.08 billion SCF of gas was flared, equivalent to a loss of $278.347 million, about N102.99 billion.

Gas

2017 July, SweetcrudeReports

Nigerian govt to begin periodic review, update of national gas policy

Gas facility OSCARLINE ONWEMENYI, Abuja

he Nigerian government says the recentlyapproved National Gas Policy would be reviewed and updated periodically to ensure it was consistent with government policy objectives at all times. The Ministry of Petroleum Resources, in a statement by its Director of Press, Mr. Idang Alibi, said the policy document builds on the policy goals of the Federal Government for the gas sector as presented in the 7 Big Wins initiative developed by the Ministry and the National Economic Recovery and Growth Plan, ERGP, 2017 – 2020. Alibi said the policy articulated the vision of the Federal Government, set goals, strategies and an implementation plan for the introduction of an appropriate institutional, legal, regulatory and commercial framework for the gas sector, adding that it was intended to remove the barriers affecting investment and development of the sector. According to him, “The gas policy intends to move Nigeria from an oil-based to an oil and gas-based industrial economy, which will be driven by the core principles including separating the respective roles and responsibilities of government and the private sector; establish a single independent petroleum regulatory authority. “Implement full legal separation of the upstream from the midstream; implement full

legal separation of gas infrastructure ownership and operations from gas trading; realise more of the LNG international downstream value; pursue a project-based, rather than a centrally-planned domestic gas development approach.” Others, he said, include: “Make a strong maintenance and safety culture a priority; Implement international best practice for environmental protection; Establish strong linkages with electric power, agriculture, transport and industrial sector; Establish payment discipline throughout the energy chain. “Honour stability of contract terms; ensure security of assets and ensure compliance with the Nigerian Content Act.” Alibi disclosed that the main aspects of the recently approved National Gas Policy covered governance (Legislation and Regulation); industry structure; development of gas resources; infrastructure; building gas markets and developing national human resources. Giving a background of the policy, Alibi said the Federal Executive Council, FEC, meeting held on June 28, 2017, in Abuja, and presided over by Acting P r e s i d e n t Ye m i O s i n b a j o , approved the National Gas Policy. He said the Minister of State for P e t r o l e u m R e s o u r c e s , D r. Emmanuel Ibe Kachikwu, while speaking at the fifth Triennial National Delegates’ Conference of the Petroleum and Natural Gas Senior Staff Association of

Nigeria, PENGASSAN, disclosed that the National Gas Policy was approved, following his presentation to the council. He quoted Kachikwu as saying that Nigeria needed major changes in policy to make gas a hub of the nation’s economy, while also highlighting the need to have a stream of revenues between petroleum and gas in order to see an improvement in the nation’s economy and leverage on opportunities for gains from the oil and gas sector.

Wike to rally south-south governors against NLNG Act amendment

ivers State governor, Chief Nyesom Ezenwo Wike, has stated that his administration will join forces with other governors of the South-South geo-political zone to prevent the amendment of Nigeria Liquefied Natural Gas, NLNG, Act, which is pending before the National Assembly. The governor also stated that agitations in the South-South have remained because the Federal Government ignores the geo-political zone even though the zone produces the wealth

Alibi said the Federal Executive Council, FEC, meeting held on June 28, 2017, in Abuja, and presided over by Acting President Yemi Osinbajo, approved the National Gas Policy

that sustains the nation. Speaking at the Government House, Port Harcourt, during a courtesy visit by the management of the Nigeria LNG Limited, NLNG, Wike said the state government would mobilise the state's representatives at the National Assembly to ensure that the NLNG remained in good stead to continue with its operations. He urged the Federal Government not to allow the amendment of the NLNG Act to sail through at the National Assembly because of the negative multiplier effects it would have on the economy.

Earlier, the Managing Director of NLNG, Mr Tony Attah, appealed to the Rivers State government to work with other stakeholders to ensure that the NLNG Bill was not amended as it would negatively affect the operations of the company on the international stage. Attah said that the NLNG currently operates six trains which produces more than 20 million tonnes of liquefied natural gas, making it the fourth largest in the global ranking of LNG producers. He added that NLNG was building its trains 7 and 8, which will take the capacity of the NLNG plant on Bonny Island, Rivers State, to 30 million tonnes and make it the third largest in the world.

Gas

2017 July, SweetcrudeReports

Gas storage facility

Gas cylinders

NLNG fails to meet target of 350,000 tonnes of cooking gas OPEOLUWANI AKINTAYO

he management of Nigeria Liquefied Natural Gas, NLNG, has said the company had committed to supply 350,000 tonnes of Liquefied Petroleum Gas, LPG, or cooking gas into the local market in 2016, but was able to supply only 262,000 tonnes of the product.. Mr. Tony A t t a h , N L N G ’s M a n a g i n g Director, disclosed this on Tuesday during a visit to some LPG terminal facilities in Lagos. Atta, who said the company had committed over N150 million to support the refurbishment and upgrading of the Petroleum Wharf, Apapa, PWA, New Oil Jetty, NOJ, and Bulk Oil Platform, BOP, to increase cooking gas supply to the domestic market, disclosed that the company’s inability to meet up with its target, was due to infrastructural challenges. According to him, the challenges, had inhibited the free-flow of the product into the market. “NLNG will refurbish some of the jetties and upgrade them so that they can have more capacity to receive and operate optimally and safely. “Once supply increases into the market, it will reduce the ability of people to play foul “As part of NLNG’s constant advocacy on helping to build a better Nigeria, we are focusing on supply of LPG,’’ he said. The NLNG boss said the company stays

committed to the development of Nigeria, adding that it is part of the company’s vision to help build a better Nigeria. "We focused on energy, bringing energy into the country; today most of it is within the domestic. But the future that we see is an industrialised aspect powered by LPG. “In 2007, when there was a shortage of LPG in the market, NLNG intervened and we are glad to say that as a result of NLNG's intervention volume consumed has scaled up to over 250,000 tonnes.

We focused on energy, bringing energy into the country; today most of it is within the domestic

"And we are looking to scale the volume up more as the company has set aside 350,000 tonnes for the market,’’ he added. According to him, NLNG sees opportunities for business and partnerships in the LPG industry. "We will upgrade the jetties and open more avenues for the product will come in. "Today, about 400,000 of LPG in the market is used largely for domestic purposes, but we have a vision that Nigeria's industrialisation can be underpinned by gas. "Our continuous advocacy in helping to build better Nigeria, we are focusing more on supply of cooking gas, " he said. I n h i s remarks, Mr. Venkataraman Venkatapathy, the Group Managing D i r e c t o r, NIPCO Plc, s a i d t h e company has commenced construction of 5,000 metric tonnes LPG storage tank to boost domestic gas supply to the market. Venkatapathy said that the tank which is the largest storage facility in African will improve access, facilitate gas evacuation across the nook and crannies of the country and quick turnaround of NLNG vessel.

Equatorial Guinea sees Fortuna FLNG off-taker decision in August

quatorial Guinea has short-listed Royal Dutch Shell and oil traders Gunvor and Vitol for an off-take agreement at its Fortuna floating liquefied natural gas, FLNG, export terminal and expects to make a final decision by August, its oil minister said. Fortuna FLNG will be Africa's first deepwater floating liquefaction facility, with production capacity of 2.2 million tons per year and an estimated start-up in 2020. "Our criteria for selection (of the preferred off-taker) is very simple - whoever gives more money. So, whoever provides the biggest cash and good terms and alternatives to the state," Gabriel Obiang Lima, Minister of Mines and Hydrocarbons, said at a press conference in Cape Town "Clearly the ball is with the offtakers. We have already had discussions with them," he said. British oil and gas explorer Ophir Energy said in May it plans to borrow $1.2 billion from Chinese banks to back the development of Fortuna. Addressing delegates at an African oil and gas conference earlier, Obiang Lima said he saw scope for adding another two FLNG terminals by year-end, as demand for LNG grew particularly on the continent. He said the latest OPEC member, who joined the oil producing cartel in May, has entered into a binding agreement with OneLNG SA to explore the liquefaction and commercialisation of natural gas in offshore Blocks O and I. OneLNG is a joint venture between Golar LNG and Schlumberger to rapidly develop gas reserves into LNG. Obiang Lima also named the winners of the 2016 licensing round for onshore and offshore blocks, with Ophir Energy among seven companies that included firms from Israel, Ireland and South Africa, who were awarded seven blocks.

Power

2017 July, SweetcrudeReports

How Nigeria lost almost 48,000MW in June

Geregu Power plant OPEOLUWANI AKINTAYO

ata obtained by SweetcrudeRep orts indicates that Nigeria lost a total of 47,536 megawatts, MW, of potential available power in June. According to our research, on June 1, an estimated 2,637 MW of power was not generated. On June 4, 2,835MW was also not generated while on June 5 and June 6, 2,62MW and 3,090MW respectively were equally not generated, so also on June 7 and June 8 when 2,494MW and 2,476MW were not produced. As at June 11, the electricity generating companies or Gencos were unable to produce 2,979MW of potential power, June 12 (2,772MW), June 13 (2,451MW), June 14 (2,468MW), June 15 (2,532MW) and June 16 (3,887MW). On June 17, 2,975 MW was stuck while on June 18 and June 21, 2,762MW and 3,192MW were not generated. June 22, 23, 24 and 26 carried ‘0’, meaning there were no constrained power and that all was generated,

while on June 25 and June 28, 2,469MW and 2,835 respectively were not generated. Total amount of power constrained in June, according to our investigations, stood at 47,536 megawatts. When contacted, the Nigerian Electricity Regulatory Commission, NERC, said the power could have been generated for use but there were complaints of i n a d e q u a t e g a s s u p p l y, transmission constraint, and demand load from the generation companies, distribution companies and transmission companies. On January 4, Nigeria’s power generation dropped from 3,959 megawatts, dropping further to 2,662 megawatts on January 22 one of the lowest. One of the country’s peak generation was during the rainy season of the second half of 2016, when power hit 5,000MW due to help from the hydro plants. The feat was announced and celebrated by the power generation, transmission and distribution companies. While Nigeria needs over 46,000MW in order to again

One of the country’s peak generation was during the rainy season of the second half of 2016, when power hit 5,000MW due to help from the hydro plants

sufficiency in peer supply, Minister of Power, Works and Housing, Mr. Babatunde Fashola, once said Nigeria’s power grid could only support 6,500MW, and 7,200MW when pushed to its limits.

Discos re-assure non-maximum demand customers on metering obligations

he 11 electricity distributing companies or Discos operating in the country have assured their non-maximum demand customers that they were working towards intensifying their metering obligations in an attempt to phase out the challenges of estimated billing faced by customers. This is coming against the backdrop of fears of a possible extension of sanctions on Discos for failing to meter non-maximum demand customers after the Nigerian Electricity Regulatory Commission, NERC, had recently directed all Maximum Demand (45KVA) customers to stop any payment based on estimated billing by the Discos. The Discos had failed to meet the deadline of March 30, within which they were ordered by NERC to provide prepaid meters to the Maximum Demand customers or face sanctions. In a statement, the Chief Executive Officer, Association of Nigerian Electricity Distributors ANED, Mr. Azu Obiaya, said

the metering targetsca ptured by Performance Agreements with the Bureau of Public Enterprises, BPE, are being followed through. He advised residential customers yet to be metered to continue to pay the estimated bills, promising that metering will be achieved sooner. “While we continue to operate with the estimated billing methodology that is approved and mandated by NERC, we are working diligently towards addressing the metering obligations specified under our Performance Agreements with the BPE. We are ensuring that we continue to be sensitive and responsive to the inadvertent challenges of estimated billing that our residential or non-MD customers are faced with. “It is critically important that we state that there is no more interested party in the comprehensive metering of our electricity consumers than the DisCos. It is our hope and expectation that such metering will be achieved sooner rather than later,” ANED said.

2017 July, SweetcrudeReports

Power

An electricity sub-station

ANED urges govt to provide loans to other energy sector players

he Association of N i g e r i a n Electricity Distributors, ANED, has called on the Federal Government to extend loans to the upstream, downstream and midstream sectors of the power sector as well as players in the oil and gas value chain in order to drive efficiency in power network. The Director of Research at ANED, Mr. Sunday Oduntan, who made the call on behalf of the association, said extending such loans to oil and exploration and production operators will help to boost gas supply to the thermal plants and improve availability of electricity. Oduntan’s call came following worries that the N700 billion Federal Government loan to the power distribution companies or Discos, may not be enough to shoot up power production in

the country. In a statement, Oduntan said the N700 billion may amount to nothing except the government carries along gas producers in the country, pointing out that the foreign exchange rate has increased the cost of production. According to him, although the loan will go a long way in helping the power companies regarding their financial constraints, it may not translate to increased power generation ad supply. “Although, it would help in reducing operational losses it cannot guarantee the firms’ optimum performance,” he said in the statement. Inadequate gas supply has been one of the complaints from power generation companies in recent times. According to them, Gencos buy gas in dollars which, increases cost of power production, and reduces their ability to purchase enough gas for power production.

Ikeja Electric says whistle-blowing platform will encourage transparency, accountability

ko Electricity Distribution Company says its recently-adopted whistle-blowing policy will encourage a culture of transparency and accountability. The company last month announced the introduction of the policy within its network to enable customers to reveal or report illegal and unethical activities in a safe, confidential and secure manner for immediate attention. The platform, which is independently managed by Deloitte, one of Nigeria’s leading professional service firms, allows customers to give information anonymously, using multiple channels - a toll-free hotline; an email platform; a web-based service and a mobile app available for IOS and Android. T h e c o m p a n y ’s H e a d o f C o r p o r a t e Communications, Felix Ofulue, explained that with the introduction of the platform, customers can now confidentially report matters bothering on fraud, bribery, extortion; energy theft and illegal connections as well as vandalism and all other illegal actions. “By connecting our customers directly with the

professional services provider responsible for the management of the platform, we have provided a means for us to work together with the customers to expose all forms of illegal and unethical behaviour on our network,” Ofulue said. He stressed that Ikeja Electric was committed to the highest standards of openness, probity and accountability. “Our subscription to the whistle-blowing is in line with our core values of professionalism, integrity, and discipline, and our commitment to uphold the highest ethical standards in all our dealings with our publics” he maintained. He added that intending whistle-blowers could make reports in English, Igbo, Hausa, Yoruba or French by calling the toll-free hotline 08008476337; send an email to expressyourself@ikejaelectric.com or visit IE website www.ikejaelectric.com/whistlebloeing for more information. Customers can also download Deloitte Tip-offs Anonymous Mobile App from Google Play Store or iTunes Store.

2017 July, SweetcrudeReports

Power

We have earmarked N40bn to settle MDAs' debts to Discos -Govt

Electricity pylon

OPEOLUWANI AKINTAYO

he Federal Government through the Minister of Budget and Planning, Senator Udoma Udo Udoma, says it has provided N40 billion to settle debts owed electricity distribution companies or Discos by Ministries, Departments and Agencies, MDAs. According to Udoma, settling the debt was important because the government's Economic Recovery and Growth Plan, which was predicated on the 2017 budget, would not be effective without revamping the power sector. “In order to do that, it is important that every segment of the p ower secto r is commercialised so that the government itself is making sure to settle its bills to the Discos to make sure that power is effective. “So, we are looking at N40 billion to settle some of the bills MDAs have in the power sector.’’ In a swift reaction to the news, Technical Officer to Ikeja Electric, Engr. Sunday t o l d O y e w o l e , SweetcrudeReports that the

company was not aware of the money and was yet to receive any from the Federal Government. “We are not aware of such money and they haven’t paid us any money yet. The Federal Government is still verifying the debts,” he said. Adding his voice to the issue, spokesperson for Eko E lect ricity Di st ri bution C o m p a n y, E K E D C , M r.

So, we are looking at N40 billion to settle some of the bills MDAs have in the power sector

Kaduna Electric laments energy, equipment theft

he Managing Director and Chief Executive Officer of Kaduna Electric, Engineer Garba Haruna, has described vandalism of power supply assets and energy theft as the biggest challenges militating against steady power supply in the company’s franchise area. He made the assertion in Kaduna when he paid a courtesy visit to the Commissioner of Police, Kaduna State Command, Mr. Agyole Abeh, in his office. Engineer Haruna, who referred to the Police as “the most strategic institution in internal security", told the Police Commissioner that the North-West Power Limited, the promoter of Kaduna Electric, made an initial investment of 168 million US dollars to acquire the Electricity Company and have made further investment of billions of naira to strengthen and reinforce the network after taking. He, however, lamented that the Company’s effort is being undermined by the menace of energy theft and vandalism.

He appealed to the Police Chief for protection of the company’s facilities and personnel, stating that the visit was aimed at strengthening the existing relationship between the Company and the state Police Command. “We have invested in technology, but technology alone cannot provide the much needed security to our personnel and asset. Hence, we solicit your cooperation and assistance in this regard”, the electricity boss stated. The Commissioner of Police, Mr. Agyole Abeh assured the Kaduna Electric team that the Command will provide all necessary security and support to the Company’s installation and personnel. “Power supply infrastructures are among what we call vulnerable and key points, high areas that police attaches importance to, we are always ready to provided needed security to your personnel and installation” the police boss stated

Godwin Idemudia, also told SweetcrudeReports via a text message that the company has not caught wind of such money. “I am not aware. Please find out from the Ministry of Power,” he said. H o w e v e r , SweetcrudeReports did not, as at the time of going to press, get any response to an email to the Ministry of Power, asking whether or not it was aware of the N40 billion quoted by Udoma. A call and text message to the Executive Director of the Association of Nigerian Electricity Distribution Companies, Sunday Oduntan, elicited no response from him. Udoma also said the government would invest N9.5 billion on rural electrification projects in federal universities in its qu est for sustainable power. According to him, N10 billion had also been set aside for the construction of 3,050 megawatt Mambilla hydropower project while N10.02 billion was ready for the completion of power evacuation facility for the 400-megawatt Kashimbila hydropower plant.

Power

2017July, SweetcrudeReports

Egbin power plant

NBET owes Gencos N365bn SAM IKEOTUONYE

he Nigerian Bulk Electricity Tr a d i n g P l c , NBET, is now owing the power generating companies or Gencos in the country about N365 billion. This is after the recent payment of N12.69 billion to the Gencos by NBET. NBET announced recently that the payment of the sum to the companies out of the total invoices of ? 37.38 billion for energy delivered in February. Although, the Central Bank of Nigeria, CBN, provided a N701 billion facility, to assist NBET in meeting its payment obligations from the generation invoices to ease the liquidity challenges, the Gencos are yet to get full payment of all the outstanding debts. In February alone, Genco invoice from Kainji Power plant was N2.423 billion, but only N822.875 million was paid. From the Jebba invoice of N2.327 billion, and N790.286 million paid; Shiroro got only N624.483 million from the N1.8 billion invoice for the same period. Egbin N1.175 billion from N3.467 billion; Ughelli Transcorp received N1.470 billion from N4.329 billion; and Sapele N216.086 million

NBET put the total energy generated by Gencos in February at 3,541 megawatt hours (MWh), while total energy delivered to the Discos was 3,019 Mwh

Abuja Disco to procure additional 30,000 prepaid meters

from the N636.321 million. The payment shortfalls leave outstanding debts of N100 billion for Egbin Power Plc; Niger Delta Power Holding Company, NDPHC, N105 billion; Ughelli Power Company N50 billion; Geregu Power Plant N80 billion, while the three hydropower stations in Niger State, namely Kainji, Jebba and Shiroro are jointly owed N30 billion. Meanwhile, NBET put the total energy generated by Gencos in February at 3,541 megawatt hours (MWh), while total energy delivered to the Discos was 3,019 MWh. The President, Association of Power Generation Companies, APGC, Dr. Joy Ogaji, recently stated that the huge debt is hindering the Gencos’ operations, including paying their workers, settling

contractors, and purchasing gas to power the plants. She said the generation companies can no longer pay salaries. “They can’t even pay for gas, and the gas companies are no longer selling the product to them as a result of the debts. Banks are not ready to advance credit to the gencos again.” On his part, the Chief E x e c u t i v e O f f i c e r, Association of Nigerian Electricity Distributors, ANED, Mr. Azu Obiaya, put the debts owed Discos by private consumers, businesses and government ministries, departments and agencies post-privatisation at over N568 billion, adding that the sector as a whole is still struggling with a revenue shortfall of over N809 billion.

he Abuja Electricity Distribution Company, AEDC, has announced that it is set to procure additional 30,000 prepaid meters to intensify mass metering of customers in its franchise locations. The AEDC franchise locations include Kogi, Niger, Nasarawa States and the Federal Capital Territory. The Managing Director of AEDC, Mr Ernest Mupwaya, who said this in Abuja, while signing the contract for supply of the meters, explained that contract for supply of the meters, valued at 3.7 million dollars (equivalent N1.29 billion) was awarded to ZTE Nigeria Ltd, a Chinese company operating in Nigeria. The AEDC had in June procured 60,000 prepaid meters worth N2.4 billion from MOJEC International, a local meter manufacturer. The company had embarked on a mass metering project in December 2016, with a target of installing 120,000 meters annually in its areas of operation. It said that the metering of customers was to bridge the metering gap, reduce estimation billing, restore the confidence of customers and ultimately improve the revenue of the company. Mupwaya said that the company would have met its target of 120,000 meters for 2017, by procuring the additional 30,000 meters. He said that the meters comprised 24,000 single phase and 6,000 three phase meters, adding that N214 million would be used to procure additional materials to install the meters. The AEDC boss explained that the meters would help customers to monitor the rate of electricity consumed, reduce load shedding on the part of the company and ultimately help eradicate energy theft by some consumers. Mupwaya said that the installation of the meters would also facilitate the revenue collection profile of the company. According to him, the continuous inflow of cash to the company will also enhance the procurement of more meters for customers.