Sweetcrude september 2016 by Sweetcrude reports

Foreign investment flow to oil sector drops by $12.74m P/09

Bulk trader moves to deflect poor remittances by Discos P/21 to Gencos

A Review Of The Nigerian Energy Industry facebook.com/sweetcrudereports September, 2016

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44.61 U$

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Govt's new deal on Ajaokuta, NIOMCO under attack Stakeholders allege fraud Say agreement with Indian firm unfavourable Deal originally rejected by Jonathan govt

42 38 34 30 26 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

NPA boss at Nigerdock, assures on tackling monopoly in oil logistics

he Nigerian Ports Authority, NPA, says it would be tackling reported monopoly in the oil and gas logistics and supply services in the country through which the nation was losing about $1.5 billion yearly. Ms Hadiza Bala Usman, Managing Director of NPA, made the disclosure while on a visit to Nigerdock and Snake Island Integrated Free Zone, SIIFZ, in Lagos. According to her, the NPA under her leadership, would provide an enabling environment and a level playing ground for all operators. Specifically, she said, NPA would put in place necessary legislations to hinder any form of monopoly in the oil and gas logistics business.

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Ajaokuta Steel complex

Contents

2016 September, SweetcrudeReports

Editor’s note

ll the evidence that Nigeria is in recession are here. Inflation rate is up 16.5 percent, the highest since 2005, according to the National Bureau of Statistics, NBS. The naira exchange rate is fast drifting north. Latest figures available to us from the NBS, show that foreign investments inflow into the oil and gas industry has dropped by as much as 61. percent in the last three months, compared with statistics for the same period last year. As if this is not bad news enough, revenue from crude oil also took a dip in the second quarter of the year, falling to N537.19 billion, from N666.13 billion in the first quarter. But perhaps the most disheartening news is in the nation's steel sector, where stakeholders have alleged foul play and fraud in the recent deal between the Federal Government and Global Infrastructure Nigeria Limited, owned by the Indian, Pramod Mittal, on Ajaokuta Steel Company and the National Iron Ore Mining Company in Itakpe, Kogi State. Besides alleged selfishness on the part of those who endorsed the deal on behalf of the government, experts point out that the deal is grossly skewed in favour of the Indian company, which has also been handed the National Iron Ore Mining Company to commence ore production and export. And this was a deal said to have been outrightly rejected by President

Goodluck Jonathan's Steel Minister, Musa Mohammed Sada, due to its unfavourable nature. Will President Muhammadu Buhari investigate this controversy? We hope he does so. For Mr. Anwar Jarmakani, the ebullient Executive Chairman of Jagal Group, who has been unrelenting in his campaign against what he calls a cabal in the oil and gas logistics and supply services in the country, his campaign may have begun to yield desired result. Newly-appointed managing director of the Nigerian Ports Authority NPA, the smooth-talking Ms. Hadiza Bala Usman, has promised to tackle the menace by putting in place necessary legislation that would ensure a level playing field for all operators in that area of business. The magnitude of what Jarmakani has been campaigning against can only be appreciated against the backdrop of information that the monopoly instituted by the cabal over the last 20 years has taken a toll, costing Nigeria about $1.5 billion yearly. We commend Ms. Usman's courage and disposition towards addressing it even as we await her swift action in this regard. All these, in this edition. Meanwhile, we say welcome to the month of September.

4 COVER 8 OIL 15 FOCUS 16 GAS 21 POWER 27 FINANCE 30 LABOUR 33 SOLID MINERAL 36 FREIGHT 38 MOTORING

Govt's new deal on Ajaokuta, NIOMCO under attack Foreign investment flow to oil sector drops by $12.74m

Embracing technology is way ahead for upstream workers

Oil firms flare N11bn gas in one month

Bulk trader moves to deflect poor remittances by Discos to Gencos

Oil revenue dips by N129bn in three months PENGASSAN threatens strike over agreement with oil firms

‘World Class’ nickel discovered in Nigeria

NPA to tackle monopoly in oil & gas logistics

10 small family SUVs

40 43

TECHNOLOGY

Opportunities, challenges and strategies

COMMUNITY

HIV: Chevron provides $1.4m for prevention of mother-to-child transmission

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2016 September, SweetcrudeReports

Cover Story

2016 September, SweetcrudeReports

Ajaokuta Steel complex

Govt's new deal on Ajaokuta, NIOMCO under attack

like exporting crude oil and then, importing it as petroleum products".

Stakeholders allege fraud Say agreement with Indian firm unfavourable Deal originally rejected by Jonathan govt KUNLE KALEJAYE

e d e r a l Government's recent deal on Ajaokuta Steel Company and the National Iron Ore Mining Company, NIOMCO, in Itakpe, Kogi State, has come under heavy attack from the stakeholders in Nigeria's steel sector. The government had last month signed a new agreement to reclaim Ajaokuta Steel Company and concession the National Iron Ore Mining Company, NIOMCO, to Global Infrastructure Nigeria

Limited, GINL, owned by the Indian, Pramod Mittal. Industry experts and stakeholders, however, said the deal with the Indian company was unfavourable to Nigeria and that the decision which would see the company commence production of iron ore through NIOMCO was born out of greed rather than positive national consideration. Of serious concern to them is that whereas Ajaokuta Steel was not anywhere near take o f f , N I OMC O, whi ch i s positioned to provide iron ore as raw material to Ajaokuta Steel, has been handed over to GINL with the mandate to

commence iron ore production. "This new deal is questionable. By the way the nation's steel sector is structured, Itakpe (NIOMCO) is tied to Ajaokuta," a retired director in the Federal Ministry of Mines and Steel Development, who pleaded anonymity, disclosed. He continued: "Itakpe is tied to Ajaokuta because it is supposed to supply it (Ajaokuta) iron ore. But, Ajaokuta is not anywhere near take off, not with the state of things in the country. Certain things have to be in place for Ajaokuta to function even if it is completed today. These include infrastructure such as constant

power, rail line to transport raw materials, among others. With Itakpe now in the hands of Global Infrastructure with a mandate to commence iron ore production, what this means is that Global lnfrastructure will produce for export. The question to ask is, why are we in a hurry to hand over Itakpe for commencement of production? "We appear to be making the same mistake we have made with crude oil as a nation, in that the iron that Global Steel will export will be used out there to produce billets which we will now import to support our rolling mills and other smaller steel plants. This is

House of Reps kicks In his reaction to the development, Chairman, House of Representatives SubCommittee on Steel, Mr. Gabriel Kolawole, said despite the agreement, there was no way Ajaokuta could take-off, citing the same issue of absence of "external infrastructure". By implication, according to Kolawole, GINL, which he accused of incompetence and having an image problem, will mine the nation's iron ore, and export it without giving Nigeria the raw material that will enable Ajaokuta to work. Vowing that the House would not allow GINL to commence any activity at NIOMCO, he noted that government would need about N2 billion to get Itakpe up and running. â&#x20AC;&#x153;What we are saying as a House Committee and House of Representative members is that we will not allow Global lnfrastructure to commence any activities at NIOMCO

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2016 September, SweetcrudeReports

Govt's new deal on Ajaokuta, NIOMCO under attack

Ajaokuta Steel complex CONTINUED FROM PAGE 4 without ensuring that government meets its obligation. "As we speak, the government will need about N2 billion to get Itakpe at 100 percent completion for the benefit of GINL and the N2 billion is not included in the last budget and in the 2016 budget. . “ We m u s t e n s u r e t h a t government meets its obligations, ensure that outstanding salaries are paid, severance benefits are paid and we must ensure that GINL this time around does the right thing. If the right thing is not done, we are not going to allow them to commence any activities at the site,” Kolawole said. BPE distances self from new deal The Bureau of Public Enterprise, BPE, the government agency in charge of relinquishing government parastatals to private concerns, has distanced itself from the Ajaokuta Steel and NIOMCO deal, questioning the process that brought back GINL.

Speaking at an investigative hearing on the concession agreement, acting DirectorGeneral of BPE, Mr, Vincent Akpotaire, said the concession was carried out by the Ministry instead of the appropriate process of going through BPE. “The concession of NIOMCO was not done by the BPE but by the Ministry. BPE has severally mentioned that it never participated in those agreement regarding NIOMCO in Itakpe and Ajaokuta Steel. The agreement, therefore, is null and void as far as we are concerned. That is my conclusion,” he said. Mines workers also against deal The Nigeria Union of Mines Workers, NUMW, are also kicking against the agreement. The union said it was concerned that NIOMCO, an artery required for the success of Ajaokuta Steel Company would be handed over to a company that has been accused of bank fraud in Nigeria, asset stripping at NIOMCO and non-payment of

authoritatively reveal that the agreement the government recently signed with the Indian company is not new. Minister of Mines and Steel Development, Dr. John Olukayode Fayemi, copied and pasted an agreement dated December 12, 2014, and addressed to former President Goodluck Jonathan. The agreement prepared by the office of the Honourable Attorney General of the Federation and the Federal Ministry of Justice (under the leadership of Mohammed Bello Adoke) was, however, not ratified under the Jonathan government following refusal by then Minister of Mines and Steel Development, Architect Musa Mohammed Sada, to sign it on the basis that it was strongly against Nigeria's interest and therefore, unfavourable to the country. The 2014 Modified Concession Agreement with GINL obtained by our correspondent, which was forwarded to President Jonathan with a memo titled, "HAGF/SH/2014/Vol.2/121" is M i n i s t e r c o p i e s 2 0 1 4 the same agreement signed on August 1, 2016 by Dr. Fayemi, concession agreement Also, SweetcrudeReports can representing the Federal workers' salaries. It asserted that GINL had no track record of successful mining business anywhere in the world, maintaining that it was for this reason of incompetence in the handling of Ajaokuta and NIOMCO that the company's initial agreement with the government on the two companies was revoked by late President Umaru Yar'Adua after three years of failed operations. Chairman of NUMW, Mr. Ogboko Newlife, informed SweetcrudeReports that before l a t e P r e s i d e n t Yar ’ A d u a terminated the GINL contract, “the company grounded NIOMCO, sold parts of facilities on ground, owed workers 13 months salaries and left the country". “Why will the Federal Government hand over NIOMCO back to the same company that ripped off the company and owed workers salaries?" Newlife asked.

Government, and Mr. Pramod Mittal of Global Infrastructure Nigeria Limited. It signing ceremony was witnessed by Vice President Yemi Osinbajo and representatives of the London Court of Arbitration. The similarity of the old and new documents is so obvious that mistakes made in the 2014 version were repeated in the latest agreement. For instance, page 9, section 7.1.2 of Adoke’s 2014 concession agreement contains a typographical error, saying 'complete' instead of 'compete'. The same error was repeated on page 9 section 7.12 of the agreement signed on August 1 by Fayemi and GINL, meaning that it was Adoke's deal Fayemi executed. After the signing of the August 1 agreement, Dr. Fayemi said that he negotiated a better deal for Nigeria whereby GINL will pay an increased concession fee from three percent turnover to four percent turnover to the Federal Government. This is contained on page 7 section 5

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2016 September, SweetcrudeReports

Ajaokuta Steel plant

Stakeholders say deal with GINL is fraudulent CONTINUED FROM PAGE 5 under the sub-title "Concession Fee". The same terms are contained in Adoke’s memo to former President Goodluck Jonathan on page 3 (b) under the subtitle, "An increase in the Concession Fee". Another evidence of copy and paste on the part of the Ministry under Dr. Fayemi was his comment before and after the signing of the August agreement to the effect that he saved the country from paying between $500 million and $700 million to GINL, which he described as a substantial achievement. However, on pages 2 and 3 of Adoke’s memo under "(a) Zero Damage", he (Adoke) said he was able to negotiate zero damages and a waiver of $525 million on behalf of Nigeria. Unfavourable terms Of serious worry to industry

experts is the provisions of the agreement, which they say are tilted in favour of GINL, and which if implemented as it is, will see Nigeria losing greatly. For instance, contrary to the seven years period given to GINL to complete their initial 10 years concession agreement, page 6, section 4 of the August 1, 2016 agreement and Adoke 2014 agreement under "Commencement and Duration", there is an option to renew the concession agreement for another 10 years with GINL. More worrisome is that the August 1, 2016 agreement contains terms asking Nigeria to pay for the deterioration of equipment which occurred during the eight years pendency of an arbitration case, which the Indian company dragged the Federal Government into after late President Umaru Yar'Adua had terminated their initial

agreement with the Olusegun Obasanjo government on the grounds that it was not in Nigeria's interest. On page 6 section 4A 1 under the sub-title "Condition Precedent", the agreement states: “The Obligations of the Parties under this Agreement are conditioned upon the performance of the following matters (each, a “Condition Precedent”) by the Grantor to the reasonable satisfaction of the Concessionaire and or waiver thereof by the Concessionaire: (a) provision by the Grantor of full access to the Concession Area and all related documentation and information for the conduct of the Due Diligence and the preparation of the Due Diligence Report; (b) rehabilitation of all plant, equipment and other facilities comprised in the Concession Area to the state in which such

facilities were as at 1 April 2008, including remediation of all loss of material, deterioration of equipment, theft, loss of design drawings, spare parts or consumables provided that the Concessionaire may undertake the performance of this Condition Precedent upon commercial terms to be agreed by the Parties after the completion of the Due Diligence. (c) full hand over to the Concessionaire of the Concession Area, including all uncompleted facilities, spares and other assets comprised therein, and all design document drawings, catalogues, manuals and other related documents By implication, page 6, section 4A (b) means that Nigeria is also going to pay to rehabilitate NIOMCO to the state it was in 2008, pay for any missing documents and

design etc. The commercial agreement to settle the condition precedent is that if Nigeria fails to undertake the repairs, GINL shall do so and pass the bill to Nigeria. The rehabilitation cost is estimated at € 500 million. Section 7 which runs from page 9 to 10 contains obligations of Grantor (Nigeria) to GINL in the course of their operations. 7.1.14 of the agreement states that "any competent authority in Nigeria or any part thereof will not directly, or indirectly, levy or impose on Concessionaire and each such company shall be exempt from any fiscal charge arising out of the generation and/or consumption of power and energy made available from captive sources". This means that NIOMCO under GINL will not pay electricity bills. Also, 7.1.15 of the agreement

CONTINUES ON PAGE 7

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2016 September, SweetcrudeReports

How Jonathan’s Minister rejected same GINL deal

Ajaokuta steel plant

states that Nigeria has the responsibility for the payment of salaries, allowances and all emoluments of the staff of NIOMCO. 7.2 (b) added that "the Grantor (Nigeria) hereby agrees to facilitate all necessary lawful exemption from Fiscal Charges required to enhance the profitability of the Concession". This means that GINL is to benefit from all fiscal incentives, including tax exceptions and waivers on export charges when selling Nigeria’s ore overseas but will sell iron ore to Ajaokuta Steel Company Limited at the normal commercial prices.

Former Attorney General of the Federation, Bello Adoke, who drafted the 2014 Modified Concession Agreement with Global Infrastructure was alleged to have been in favour of the signing of the agreement. He was said to have been furious that Sada refused to sign the document. Sada, in refusing to sign the document, had claimed the terms were unfavourable to Nigeria and that the reasons why late President Musa Yar'Adua revoked the initial deal with the Indian firm were not addressed by Adoke's agreement. It also became known that Sada was not carried along in the making of the Adoke draft.

Pressure for signing agreement under Jonathan In the recent signing of the agreement with GINL, it is not certain whether Fayemi acted under pressure. But there was pressure for the signing of the deal during the Jonathan government which the Minister of Mines and Steel Development under that administration, Mohammed Sada, resisted till the end of the regime.

The Obasanjo connection In 2004, the Federal Government under President Olusegun Obasanjo signed a 10-year concession agreement with GINL to manage Ajaokuta and NIOMCO, after Solgas, the original firm who received Ajaokuta and NIOMCO following an earlier government concession, was deemed to have failed in its handling of the companies. Three years into the deal with

CONTINUED FROM PAGE 6

GINL (in 2007), late President Yar' Adua cancelled the agreement on the grounds that the terms were unfavourable to Nigeria and that the Indian firm had breached some terms of the agreement. The breach of contract which led Late President Yar'Adua to revoke the deal included allegations of asset stripping of NIOMCO and indebtedness to major banks in Nigeria. Thereafter, GINL dragged the Federal Government to the Court of Arbitration in London. Govt escaped paying $525m to GINL - Minister Giving more insight into the new deal with GINL, Minister of State for Mines and Steel Development, Mr. Abubakar Bawa-Bwari, said Nigeria escaped paying damages in excess of $525 million to the Indian firm by signing a modified concession agreement with the company. Curiously, this is exactly the same amount claimed as waiver obtained from the Indian company in the Bello Adoke draft agreement on pages 2 and 3 under the title, "(a) Zero Damage". Bawa-Bwari, who disclosed

Giving more insight into the new deal with GINL, Minister of State for Mines and Steel Development, Mr. Abubakar Bawa-Bwari, said Nigeria escaped paying damages in excess of $525 million to the Indian firm by signing a modified concession agreement with the company this as he spoke in Abuja, also said the government had in the last 35 years spent a whopping $10 billion on the Ajaokuta Steel project. “The most important thing is that everybody agrees that Ajaokuta should work. We have spent over $10 billion over 35 years and we cannot afford to continue to waste more time. “This modified agreement is the best option available to g o v e r n m e n t t o d a y. T h i s agreement will free us from all

the legal issues. We will monitor it and ensure that the GINL too keeps to its promise that they have turned a new leaf,” the minister said. According to him, the government signed the agreement to free NIOMCO, Ajaokuta Steel and the Delta Steel Company, OvwianAladja, from the ‘legal encumbrances’ that had stalled their operations for several years since they were first privatised in 2004.

Oil

2016 September, SweetcrudeReports

Oil rig

Foreign investment flow to oil sector drops by $12.74m IKE AMOS

sharp decline was recorded in foreign investments into the oil and gas industry, as the National Bureau for Statistics, NBS, disclosed that capital imported into the sector dipped by $12.74 million to $8.09 million in the second quarter of 2016. The NBS, in its Nigerian Capital Importation Report for the Second Quarter of 2016, stated that foreign capital inflow into the oil and gas sector in the second quarter of 2016, represented a depreciation of 61.2 per cent from total inflow $20.83 million in the first quarter of 2016. In addition to the decline in foreign capital imported into the oil and gas sector, the NBS noted that the total value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $647.1 million, which represents a fall of 8.98 per cent relative to the first quarter, and a fall of 75.73 per cent relative to the second quarter of 2015. This figure, the NBS declared, would be the lowest level of capital imported into the

economy on record, and would also represent the largest year on year decrease. The NBS disclosed that the continuing decline in the value of capital imported into the economy was symptomatic of the difficult period that the Nigerian economy is going through. It said, “The second quarter saw the economy enter into the first recession during the rebased period, according to the technical definition of two consecutive periods of decline. This may suggest less profitable opportunities for investment. In addition, in the second quarter there was considerable uncertainty surrounding future exchange rate policy which may have deterred investors. The Naira was allowed to depreciate towards the end of the quarter. These factors were likely to have contributed to the record decline in c a p i t a l importation.” Continuing, the NBS said, “Year on y e a r , t h e importation of capital declined for each broad type Pipeline

The NBS said the second quarter saw the economy enter into the first recession during the rebased period, according to the technical definition of two consecutive periods of decline

—Foreign Direct Investment, Portfolio Investment and Other Investment— but Portfolio investment recorded by far the largest decline of 88.76 per cent year on year, compared with declines of 37 per cent and 1.22 per cent for Foreign Direct and Other investment respectively.’’

Repair of ExxonMobil's export pipeline to take months

e p a i r w o r k o n July allegedly by Niger Delta E x x o n M o b i l ' s m a i n militants will take up to two export pipeline damaged in months. The Niger Delta Avengers had claimed responsibility for the damage on the pipeline but ExxonMobil denied militants' involvement. Sources said the company later found substantial damage that would take at least one to two months to repair, prompting, according to Reuters, move by the company to find an alternative export line.

The Qua Iboe crude oil, exported through the damaged pipeline, has been under force majeure since mid-July when the incident occurred. Nigeria's oil production has been hobbled by militant action since the beginning of the year, with state oil company NNPC saying pipeline attacks have taken out some 700,000 barrels per day, bpd, from production that is typically just above 2 million bpd.

2016 September, SweetcrudeReports

Oil

Oil rig

Oil price will be under $70 next year, say experts OSCARLINE ONWUEMENYI & KUNLE KALEJAYE

rude oil prices will rise next year to the "mid-$50 range,” according to veteran oil market observer and Vice Chairman, IHS Markit Ltd, Daniel Yergin. Yergin, who won the Pulitzer prize in 1992 for his history of the industry, “The Prize: The Epic Quest for Oil, Money and Power,” said though the worst has passed for oil prices, which has remained low since last year, prices would likely not reach $60 but would stay at mid-$50 range during the year. Also, energy forecaster for several African countries and research analyst at Eco Bank Development Company, Dolapo Oni, is of the view that prices will be well under $70, with shale gas having come to stay. “We are not going to see $80 per barrel oil. We are not getting $70 per barrel this year; we are not getting $70 next year, may be in 2018,” Oni said in Lagos. Crude futures traded near $48 per barrel mid-last week, a level experts still see as too low to ensure investment in the new supplies needed during the rest of the decade. According to Yergin, the market is currently rebalancing as the

global oversupply diminishes, with U.S. crude production set to fall another “couple of hundred thousand” barrels a day by the end of this year The recovery will, however, be unaffected by any Organisation of the Petroleum Exporting Countries, OPEC, decision to freeze output, he said. “Downturns end, it’s not a permanent thing,” Yergin said in Stavanger, Norway, at the ONS Conference. “We are in a recovery phase, and a rebalancing phase. The price level that we are at is not one that is going to provide the investments needed to meet demand needs over the next half-decade.” While oil has climbed from the 12-year lows reached at the start of 2016, a persisting supply glut is pinning prices at half the levels of two years ago. Still, with global demand rising and oil explorers slashing hundreds of billions of dollars in investment, finding enough supply could become an issue again in coming years. Yergin explained that it’s “too soon to say” whether the Organisation of Petroleum Exporting Countries will agree to cap output when members gather for informal talks in Algiers this month. Oni, on his part, said now that

shale gas has come to stay, prices of oil will remain low over the next three years. Explaining the basis for his forecast, he maintained that when Saudi Arabia tried to force the shale business out of the market in recent times, the American shale drillers kept drilling even when oil price was as low as $26 per barrel, helped by bank funds.

We are not going to see $80 per barrel oil. We are not getting $70 per barrel this year; we are not getting $70 next year, may be in 2018,” Oni said in Lagos

“When the shale guys ran out of bank funds, they got equity and one thing about equity is that it is called Patient Capital. Equity can stay in business even when you are making losses for like eight years," he said, adding that with this sustained drilling, shale gas output would continue to impact the market over the next three years.

Jagal appoints Joy Okebalama as Group Corporate Affairs Director

eading Nigerian conglomerate, Jagal, has

Mrs. Okebalama

appointed Mrs. Joy Okebalama as Group Corporate Affairs Director, in a bold move to foster diversity in the management of a Company that is synonymous with the indigenisation drive in the nation’s oil and gas sector. “I’m pleased to welcome Joy to t h e f a m i l y, ” s a i d G r o u p Executive Chairman, Anwar Jarmakani as he announced the appointment. “Jagal has grown significantly from the humble steps we took about 40 years ago, and we believe it is now time to actively engage a wide variety of our stakeholders as we continue to diversify and add value to the Nigerian economy. Joy brings valuable experience and reach

that will be an asset to all the companies in our Group.” Mrs. Okebalama has undergraduate and postgraduate degrees from Lincoln University and the University of North Texas in the United States, and has more than two decades of working experience in Nigeria and Europe. She spent 17 years with Shell in Nigeria and The Hague, heading up diverse business units, including logistics, external affairs, real estate and supply chain management. Thereafter, she joined Caverton Offshore Support Group as General Manager, External Relations.

Oil

2016 September, SweetcrudeReports

PPPRA, marketers insist on N135-N145 pump price for petrol

Fuel station OSCARLINE ONWUEMENYI, Abuja

he Petroleum Products Pricing Regulatory Agency, PPPRA, and key oil marketers in Nigeria’s downstream petroleum sector have said the current fundamentals guiding importation and sale of petrol in the country were still favourable for petrol to be sold within the governmentapproved pump prices of N135 to N145 per litre. The PPPRA and marketers which include the Nigerian National Petroleum Corporation, NNPC, Major Oil Marketers Association of Nigeria, MOMAN, and Depot and Petroleum Products Marketers Association, DAPPMA, stated this after an emergency meeting with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja. The meeting, according to a statement from PPPRA, was convened by Kachikwu as a response to recent news of a possible increase in the pump price of Premium Motor Spirit, PMS, also known as petrol. It was attended by the Group Managing Director of the

NNPC, Dr. Maikanti Baru, the Acting Executive Secretary of PPPRA, Mrs. Sotonye Iyoyo, the Acting Executive Secretary of Petroleum Equalisation Fund, PEF, Ahmed Bobboi, as well as the Executive Secretary of MOMAN, Obafemi Olawore, and the Executive Secretary of DAPPMA, Olufemi Adewole. The statement, signed by the trio of Iyoyo, Olawore and Adewole, stated that, “The meeting reviewed the state of the downstream sub-sector, especially as it relates to products supply, distribution, pricing and forex sourcing. "The meeting also reviewed recent concerns expressed at certain quarters, on the sustainability of the current PMS price band.” It added that, “After exhaustive deliberations, stakeholders present were in the affirmative that the speculations of an imminent upward price review of PMS was unfounded. "This position is premised upon the fact that the current market fundamentals, as captured on the PPPRA pricing template for PMS, confirmed that the market is operating within the existing price band of N135-N145 per litre.

After exhaustive deliberations, stakeholders present were in the affirmative that the speculations of an imminent upward price review of PMS was unfounded

“The claim is therefore both unfounded and deceptive, as there is no basis for pricing speculations as being circulated within the last few days." The PPPRA assured that the country will continue to have an uninterrupted supply and distribution of petroleum products.

Putin pushes for oil-freeze deal with OPEC, exemption for Iran

Putin

ladimir Putin said he’d like he Organisation of the Petroleum Exporting Countries, OPEC, and Russia, producers of half of the

world’s oil, to reach a deal to freeze supply and expects the dispute over Iran’s participation can be resolved. “From the viewpoint of economic sense and logic, then it would be correct to find some sort of compromise,” Putin said in an interview in Vladivostok. “I am confident that everyone understands that. We believe that this is the right decision for world energy.” While talks collapsed in April over whether Iran should join in, countries now recognize the nation—freed just months ago from international sanctions—should be allowed to continue raising production, Putin said. The Russian president said he may recommend completing the plan when he meets with Saudi Deputy Crown Prince Mohammed bin Salman at the Group of 20 Summit in China next week. Oil rallied more than 10% last month on speculation that OPEC will reach an accord with non-members at an informal meeting in Algiers this month. The prolonged slump in crude prices—stuck at half the levels seen two years ago—is battering the economies of producer nations, giving oil-market rivals cause to cooperate.

2016 September, SweetcrudeReports

Oil

Gas facility

Oil sector roadmap, new gas policy coming, says Kachikwu

he Federal Government is set to launch a p e t r o l e u m roadmap designed in the form of policies that will cushion Nigeria's current economic crisis. Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, revealed this in Lagos, saying the roadmap will come out in three policies which include the roadmap itself, a gas policy and petroleum policy, all aimed at driving positive changes in the petroleum industry. "At this point in Nigeria's economy, we need to come out with polices that will drive positive changes especially in the petroleum industry. There has to be a policy to bring about gas revolution. That is why we are going to be launching three policies - the gas policy, the petroleum policy and the petroleum road-map," he said. The minister had said the launching would happen late last month, but it did not hold as announced by the minister. A Ministry of Petroleum Resources source, who did not explain why the event did not

hold, was optimistic this would happen soon. He said the Federal Government was vigorously driving the process for the passage of the various component of the Petroleum Industry Bill, PIB, as part of efforts to ensure stability of the environment oil majors and other stakeholders operate. Speaking on gas flaring,

Flared gas is being used by power plants in the country, albeit minimally, due to the same issue of pipeline vandalism by militants, which has seen national power generation drop below 3,000 megawatts

PIB held up by Niger Delta crises - Senator

hairman of the Senate Committee on Petroleum Resources, Senator Tayo Alasoadura, says the long-awaited bill to reform the country's petroleum industry is effectively on hold until tensions ease in the restive Niger Delta region, the country's oil hub. Alasoadura pointed out in an interview on Tuesday that the delay is the latest setback caused by activities of militants in the Delta region, whose actions have prevented more than 700,000 barrels per day, bpd, in oil production due to anger at the way the nation's energy resources are split. The Petroleum Industry Bill, PIB, covering everything from an overhaul of the Nigerian National Petroleum Corporation, NNPC, to taxes on upstream projects, has been stuck in parliament for almost decade, but President Muhammadu Buhari has made passing it a key

part of his reform of a sector hit by corruption at NNPC. "We have to hold it because of all the problems in the Niger Delta," Alasoadura said of bill. "As soon as things improve, then it will come to the front of the line again." Alasoadura said there were no plans to change the bill, which had a first reading in the senate, but the unrest in the Delta had forced lawmakers to wait. "There is a deliberate effort to keep things waiting so we don't accentuate what is happening there," he said, adding he hoped the bill could move forward again within three to five months. Despite a ceasefire reached late last month with one of the most active militant groups, the Niger Delta Avengers, others have continued to attack oil and gas infrastructure in the region.

Kachikwu said Nigeria has to transit from a gas flaring r e g i m e t o f l a r e commercialisation. "Instead of always paying penalty for gas flaring, there is an urgent need to turn flared gases into money," he said. The move to stop gas flaring could not have come at a more critical time when Nigeria is seeing its worst power outages due to oil and gas pipeline vandalism by militants in the Niger Delta. Flared gas is being used by power plants in the country, albeit minimally, due to the same issue of pipeline vandalism by militants, which has seen national power generation drop below 3,000 megawatts. Kachikwu also reiterated the plan to introduce the national gas policy and a road map for the industry at the First PTDF Oil Exploration and Production Companies Summit held in Abuja. Represented by the Permanent Secretary in the ministry, Dr. Jamila Shua'ra, Kachikwu assured oil majors that their input will be needed to contribute to the critical process.

2016 September, SweetcrudeReports

Oil

NNPC seeks collective effort to address pipeline vandalism

Vandalised pipeline

KUNLE KALEJAYE

he Nigerian N a t i o n a l P e t r o l e u m Corporation, NNPC, has called for a "collaborative out-of-thebox solution" to address the spate of pipeline vandalism which has considerably slashed the nation's oil output in these challenging times of global low oil prices. NNPC’s Group Managing Director, Dr. Maikanti Baru, made the call in Lagos at the 2016 annual conference of the National Association of Energy Correspondents, stressing that it was important to work together in order not only to surmount these challenges but to create sustainable pathway for the industry development. “We are at a vantage position to address these challenges, to dip deep for collaborative outof-the-box solution and working together, assured that we will not only surmount the challenges but create sustainable pathway for the industry,” Baru said. Baru, who also spoke on the effect of low oil price on government revenue, said the development posed a grave

danger for adequate funding of the national budget as oil account for approximately 90 percent of the nation’s foreign exchange earnings. But, the bigger challenge, according to the NNPC boss, was to secure crude volumes to a level that ensures that the country deliver the revenue target. Maintaining that efforts were in progress to resolve the current security challenges in the Niger Delta to guarantee volumes, Baru hinted that the country might not even be able to deliver volumes without adequately funding the industry. He stated that the average $600 million monthly joint venture cash call requirement, coupled with flat budget over the past years, has led to under-funding of the industry. “The under funding has stymied production growth. Therefore, managing this funding issue is our immediate challenge, and transparent innovative financing approaches are being reviewed to address these funding shortfalls,” Baru said. NNPC’s group managing director added that sustainable returns needed to

Initiatives such as service sharing for clustered assets, standardisation of operating framework and contracts, resource pooling and reducing contract cycle time will be pursued

be maintained; and to achieve this, he said: “We are working on cost saving measures that will ensure safe and profitable operations of the assets while guaranteeing adequate margin for both government and investors. “Initiatives such as service sharing for clustered assets, standardisation of operating framework and contracts, resource pooling and reducing contract cycle time will be pursued.”

NNPC urges IPMAN to enforce price band for petroleum products

he Nigerian National Petroleum Corporation, NNPC, has called on the leadership of the Independent Petroleum Marketers Association of Nigeria, IPMAN, to enforce the Petroleum Products Pricing Regulatory Agency, PPPRA's, retail price band for all petroleum products across its retail outlets. Group Managing Director of the NNPC, Mr. Maikanti Baru also enjoined the association to take advantage of the Federal Government's liberalisation policy of the downstream sector to import petroleum products so as to keep the country wet with petroleum products. Baru who made the demand on IPMAN while receiving the National Executive Committee of the association at the NNPC Towers in Abuja harped on the need for efficient distribution of petroleum products nationwide before, during

and after the yuletide months. He urged IPMAN to use its vast network of distribution outlets in the downstream sector across the country to deliver petroleum products to the people without engaging in diversion of products. President of IPMAN, Chief Obasi Lawson, who announced the return of peace to the leadership of the association, stated that the association was prepared to use its various filling stations to ensure effective supply and distribution of petroleum products for the benefit of Nigerians. On his part, chairman of the IPMAN Board of Trustees, Alhaji Aminu Abdulkadir, equally expressed the readiness of he association to support the group managing director and his management team to succeed in their task of ensuring seamless supply and distribution of petroleum products nationwide.

Oil

2016 September, SweetcrudeReports

Oil and gas facility

Non-passage of PIB, albatross for Nigeria’s oil and gas industry - PwC

n its latest oil and gas review report, the global professional auditing and services firm, P r i c e Wa t e r H o u s e Coopers, PwC, charged that Nigeria must reform its regulatory, fiscal and licensing systems to attract oil and gas investors. PwC contends that the country needs the petroleum industry act for better management of the oil and gas sector of the economy The PwC’s ‘Africa Oil and Gas Review 2016’ report noted that the decline in the global oil price had led to a reduced level of activity industry, stressing that the impact was more acute on countries like Nigeria that traditionally depend on oil and gas revenue. The company’s Africa Oil and Gas Advisory Leader, Chris Bredenhann, said, “It is an opportune time for local governments that want to attract oil and gas investors to reform their regulatory, fiscal and licensing systems.” Bredenhann said the complexities and challenges facing the oil and gas industry

had become daunting. He said, “As uncertain regulatory frameworks, taxation requirements and corruption continue to rank at the top of industry’s challenges in the country, it is also high time that government made significant changes. “Furthermore, players must look at the current state of the industry as an opportunity to reinvent themselves. Given the state of the industry, we think that stakeholders must also consider making changes to their business models. Change is the way to survive in the ‘new energy future’. We need to see new business models, new products, new energy sources and new strategies to meet the new reality,” he stated. Even with all the anticipated positive impact of the Petroleum Industry Bill (PIB) on the oil and gas sector of the economy, it has remained mired in inexplicable stalemate, unable to find its way back to the legislature from the executive to which it was returned in 2014.

In contrast, Ghana, which has a very young oil industry compared to Nigeria, this month passed the Petroleum Production and Exploration Bill into law to replace the Petroleum (Exploration and Production) Act, 1984, an indication of the seriousness the country attaches to it.

The company’s Africa Oil and Gas Advisory Leader, Chris Bredenhann, said, “It is an opportune time for local governments that want to attract oil and gas investors to reform their regulatory, fiscal and licensing systems”

'Some IOCs not yet in terms with Local Content Act’

hairman, House of Representatives Committee on Local Content, Hon. Emmanuel Ekon, says some international oil and gas companies, IOCs, operating in the country still find it hard to adjust to the changing environment presented by the Local Content Act of 2010, even as he said the law is affording Nigerians employment opportunities in the oil and gas industry. Ekon, who spoke in an

interview in Abuja, noted that some of the international oil and gas companies were yet to come to terms with some changes in the contracting system in the industry as it pertains to the Local Content Act. He said, “Some of the IOCs have been in the country for over five decades, some, more than that, operating within this sector and have done things in the same way for that period of time and this law is barely six

yea r s old. It was passed in 2010, so you don't expect these companies to just wake up overnight and adhere to this law a hundred percent.” Welder at work

Oil

2016 September, SweetcrudeReports

Why OPEC freeze wouldn't be so potent now - Report

OPEC headquarters, vienna, Austria

ven if the Organisation of the Petroleum Exporting Countries, OPEC, strikes a deal with Russia next month in Algiers to freeze oil production, success will mean a lot less than when they tried and failed four months ago, according to a Bloomberg report. Oil has rallied more than 10 percent since OPEC announced recently that it will hold an informal meeting in Algiers, the Algerian capital, fanning speculation the group could complete a supply agreement with rival producers that sputtered in April. Iran may now drop its refusal to join a freeze after restoring most of the crude output curbed by sanctions, a development analysts say makes a deal more likely, but also less worthwhile. “A freeze at 34 million barrels a day is not the same as one at 33 million barrels a day,” said David Hufton, chief executive officer of PVM Group in London, referring to the broker’s own estimate for total OPEC output. “It pushes the re-balancing process back

at least a year.” Saudi Arabia and Iran, whose political rivalry thwarted the previous negotiations, are together pumping about 1 million barrels a day more than in January - the proposed level of the original freeze. That additional crude has prolonged a global oversupply, preventing the market from sliding into deficit this quarter, according to Bloomberg calculations based on International Energy Agency data. Sixteen nations representing about half the world’s oil output gathered on April 17, but talks broke down because of Saudi Arabia’s last-minute demand that Iran must also participate. Iran wasn’t at the Doha meeting because it refused to consider any limits on its production, which had only been released from nuclear-related sanctions in January. Now that major producers including Iran are pumping at or close to capacity, they have little to lose by agreeing to a cap, Chakib Khelil, former OPEC president and Algerian energy minister,

said in a Bloomberg television interview. “All the conditions are set for an agreement,” said Khelil, who steered OPEC in 2008, the last time it announced a supply cut. “Russia, Iraq, Iran and Saudi Arabia are reaching their top production level. They have gained all the market share they could gain.” There are still reasons to think Iran could be reluctant to join a freeze. The nation will refuse to accept any limits as long as officials insist they can boost output further, said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. Iran is also trying to attract billions of dollars of i n v e s t m e n t f r o m international oil companies to expand production capacity, which would conflict with submitting to a cap, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. Iranian Oil Minister Bijan Namdar Zanganeh hasn’t decided yet whether to participate in the talks in Algiers, a spokesman said on August 16.

IPMAN appeals to NASS for speedy PIB passage

National Assembly Complex, Abuja

h e Independent P e t r o l e u m M a r k e t e r s Association of Nigeria, IPMAN, has appealed to the National Assembly to accelerate the passage of the P e t r o l e u m Industry Bill, PIB, which has been w i t h i n t h e h a l l o w e d

chambers for nine years. IPMAN’s Chairman, Board of Trustees, Alhaji Abdulkadri Aminu, who made the appeal in an interview in Lagos, said that the appeal became necessary as the bill was of benefit to Nigerians and the nation’s ongoing economic reforms. In addition to expediting the passage of the bill, Aminu also urged members of the 8th National Assembly to make the progress of the bill at the Assembly public. On behalf of the association, he said: “We are appealing to whosoever is concerned about the passage of the bill to use this opportunity to assure Nigerians and make open the progress that is being made regarding the Petroleum Industry Bill. “The National Assembly and other concerned authorities should be committed to passing the Petroleum Industry Bill because IPMAN believes that it is going to bring major reforms in the industry. We are hoping that very shortly the committee saddled with the deliberation on the bill will give it an accelerated hearing. “This will make Nigerians and those who are in the industry to begin to have the benefits of the reforms intended by this bill.’’

Focus

2016 September, SweetcrudeReports

Oil workers

Embracing technology is way ahead for upstream workers

echnological change in the workplace has long been a fact of life for workers, but the pace of that change has sped up so much in recent years that redundancy is an ever-present threat to the modern-day worker. Everyday examples of this on the high street include the supermarket checkout till operator, who in many countries is increasingly being replaced by self-service checkout machines. Then there's the London Black Cab d r i v e r, f a m e d f o r t h e knowledge of London's streets that he keeps in his brain, but whose livelihood is now under huge pressure from Uber drivers armed with the latest in-vehicle satnav technology. Of course, many of today's Uber drivers could themselves be out of work within a decade or so if the efforts to develop self-driving cars are successful.

In the office, secretaries and personal assistants are becoming rarer as managers are forced to use online selfservice tools for dealing with an array of tasks. (Online expense filing and business travel booking are just two of my bugbears!) One rather chilling forecast for today's wage slaves came from the Bank of England last November. Its chief economist reckons that as many as 15 million jobs currently undertaken by Britons could be replaced by smart machines within a generation. So what does this mean for upstream oil and gas and the people who work in the sector? Well, the upstream industry is – first and foremost – a technology industry. A couple of decades ago technological innovation in upstream was focused on the development of 3D seismic, enabling oil firms to better target their wells.

One rather chilling forecast for today's wage slaves came from the Bank of England last November. Its chief economist reckons that as many as 15 million jobs currently undertaken by Britons could be replaced by smart machines within a generation

Today, the focus in on digital technologies that boost productivity and reduce costs within upstream operations. R e c e n t l y, s t r a t e g y consultancy McKinsey reiterated the opportunities for oil and gas firms that make effective use of Big

Data, advanced analytics and the Internet of Things. (Rigzone also took a look at how such technologies might affect employment in the sector in a series of articles released around the time of the Offshore Technology Conference show in Houston

in May of this year).

cKinsey highlighted that drones and equipment sensors are revolutionising monitoring and maintenance – and that they have the potential to knock double-digit percentage savings off the cost of maintenance. We have been covering the drone inspection story for a couple of years, and it's been clear to us that – although there is an important health and safety factor in their use – drones are being employed in order to take expensive humanbased inspection out of the picture. What can people do to ensure that they stay relevant to oil and gas employers? The answer is that they will need to learn new skills that enable them to work with the technologies that are disrupting the workplace. - Jon Mainwaring, Rigzone

Gas

2016 September, SweetcrudeReports

Gas flaring

Oil firms flare N11bn gas in one month IKE AMOS

igeria lost $44.4 million (about N11.1 billion) as the Nigerian N a t i o n a l Petroleum Corporation, NNPC, the Nigerian Petroleum Development Company, NPDC, and other oil companies flared 14.8 billion Standard Cubic Feet, SCF, of gas in the June 2016. Data obtained from the NNPC’s Monthly Financial and Operations Report for June 2016, stated that the amount of gas flared in June represented a decline of 6.33 per cent, compared to 15.8 billion SCF of gas flared in May. The Nigerian Gas Company put the average gas price at $3 per 1,000 SCF, meaning that the flaring of 14.8 billion SCF translates to a loss of $44.4 million. While using an average exchange rate of N250 to a dollar, the amount translates to N11.1 billion. The NNPC report stated that a total of 216.60 billion SCF of natural gas were produced in the month of June 2016, translating to an average daily production of 7.22 billion SCF per day. It also noted that for the period

July 2015 to June 2016, a total of 2.823 trillion SCF of gas was produced representing an average daily production of 7.714 billion SCF per day during the period. The report explained that production from Joint Ventures (JVs), Production Sharing Contracts (PSC) and NPDC contributed about 69.98 per cent, 21.84 per cent and 8.18 per cent respectively to the total national gas production. In addition, it added that out of the total gas produced in June, a total of 115.88 billion SCF of gas was commercialised, comprising of 16.50 billion SCF and 99.38 billion SCF for the domestic and export market respectively. This, the report noted, translates to an average daily supply of 550.10 million SCF per day of gas to the domestic market and 3.31 billion SCF per day of gas supplied to the export market. “This implies that 54.51 per cent of the total gas produced was commercialized while the balance of 45.49 per cent was either re-injected, used as upstream fuel gas or flared. “Gas flare rate was 6.98 per cent for the month of June 2016,

that 494.70 million SCF per day compared with average gas flare rate of 8.62 per cent, that is, 660.89 million SCF per day for the period July 2015 to June 2016,” the NNPC said. The report further stated that from the 550.10 million SCF per day of gas supplied to the domestic market in June 2016, about 326.80 million SCF per day of gas representing 59.41 per day. was used for gas-fired power plants while the balance of 223.30 million SCF per day or 40.59 per cent was supplied to other industries.

Alaska LNG plant

BP, ExxonMobil, ConocoPhillips ‘quit' Alaska LNG project

P, Conoco Phillips and ExxonMobil said that the 65-billion dollar mega-project would be too unprofitable for them to move into the next phase of development. The big 3 oil companies have told state lawmakers that the proposal on the table to pipe, liquefy and export North Slope natural gas is uneconomic and they won't move forward as partners. However, they said they would sell their natural gas to a statedeveloped project if it comes to fruition, which is more in doubt than ever. A report in WSJ said that ExxonMobil Corporation has decided not to invest in the next stage of a proposed natural gas export terminal in Alaska and said it would work with its partners to sell its interest in the project to the state government. A spokesman for Exxon said the company will no longer invest in the proposal, which is “transitioning to a state project.” Exxon owns about one-third of the project, according to the state. Meanwhile, ConocoPhillips and BP indicated that as things stand, they're also not likely to move into the detailed engineering phase of the project's complex facilities, such as an 800-mile pipeline and a plant in Nikiski to turn natural gas into a liquid for shipping. Platts quoted Dave van Tuyl, BP's Alaska regional manager as saying: "BP is not giving up on the project. Instead, we need to change gears and figure out how to reduce the cost of supply so that the project can be competitive.

Gas

2016 September, SweetcrudeReports

NLNG bounces back after production disruptions SAM IKEOTUONYE

he Nigerian L i q u e f i e d Natural Gas, NLNG, plant on Bonny Island, Rivers State is back to normal production after last month's production disruptions caused by a break in a pipeline supplying gas to the multi-dollar plant. Nigeria LNG returned to production, bringing good news to the Nigerian government and the c o m p a n y ' s o t h e r shareholders - the Royal Dutch Shell, French oil giant To t a l a n d I t a l y ' s multinational conglomerate Eni. The Nigerian government

particularly has been in dire straits following poor crude oil prices since last year, which has cut its earnings considerably, threatening the success of its N6.06 trillion budget for this year. Trade sources maintained that vessels were leaving the p l a n t r e g u l a r l y. " T h e September loading programme shows no d i s r u p t i o n t o s u p p l y, " according to a source. Shell Nigeria declared force majeure on gas supplies to the NLNG from the Eastern Gas Gathering System, EGGS, on August 4, following a leak along the EGGS-1. The NLNG plant has a capacity to process 22 million metric tons a year of LNG about 7 percent of world

supply - and 5 million tons of natural gas liquids. Besides selling on the spot market, NLNG has long-term supply contracts with Italy’s Enel, France’s Engie SA and Portugal’s Galp, among others. NLNG, which began gas export about 16 years ago, is owned by the Nigerian National Petroleum Corporation, NNPC, which holds 49 percent share of the business, Shell with 25.6 percent share, Total LNG Nigeria Limited (15 per cent and Eni International (10.4 per cent). It declared another force majeure on gas supply to the NLNG plant on August 8, also citing a leak on the Eastern Gas Gathering System

pipeline through which it supplies the bulk of its gas to NLNG. In fellow African country, Angola, the country's LNG plant, shut for maintenance since July, may resume output before late September as two vessels, the Lobito and Soyo, are due to arrive at the plant by mid month, shipping data shows. The Nigerian and Angolan development came as Asian LNG prices fell last week while traders awaited the outcome of two tenders and Argentina turned away shipments due to mild weather curbing demand, Reuters reported. A major tender expected from Egyptian Natural Gas Holding, EGAS, to buy 120

cargoes for 2017, which sources said could be launched last weekend, was the market focus. Bids under the Brent-priced tender will be due by October and awards are to be finalised by the end of November at the latest, one trading source said. "They are trying to extend credit terms to 120 days," he added. In December EGAS extended payment terms to 90 days from the previous 15 days due to a foreign currency crisis. Asian spot prices for October delivery traded at $5.30 per million British thermal units (mmBtu), 20 cents below he previous week's levels, trading sources said.

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 September, SweetcrudeReports

Omotowa

Amendment of NLNG Act, collateral damage to economy – Omotowa KUNLE KALEJAYE

be disrupted by any amendment on the NLNG ny amendment Act. to the Nigerian Commenting on the Liquefied e xpansion programme, Natural Gas, Omotowa said it involves the NLNG, Act of expansion of production 2004 will cause the Nigerian capacity of the LNG plant in economy collateral damage, Bonny, Rivers State, with the former Managing Director addition of Trains 7 and 8, and Chief Executive Officer of stating that this could attract the Nigeria LNG Limited, NLNG, Mr. Babs Omotowa, $25 billion in investment to the country, create 30,000 has warned. construction jobs, help to According to him, any such further reduce gas flaring, amendment of the Act will also and generate $1 to $2 billion damage bilateral business additional revenue for the a g r e e m e n t s w i t h c o u n t r y i n t a x e s and international investors, dividend. costing the nation over $25 “In a period of huge youth billion in Foreign Direct unemployment and need for Investment, FDI, and fines more revenue, this should running into billions at the really be a course we should International Courts. have all hands on deck for, Omotowa disclosed this in especially as NLNG has Lagos, saying instead of the demonstrated its pedigree effort by the National Assembly to review the Act having attracted $15 billion and create negative impact on in foreign investment, grown the economy, such effort from a 2-train to 6-train should be geared toward p l a n t , c o n t r i b u t e d t o attracting investment into the reducing gas flaring from 65 percent to below 20 percent, country. and delivered $33 billion to He also disclosed that plans Nigeria from a $2.5 billion were in motion to ensure the investment," he stated. success of the NLNG H e c o n t i nued: “This expansion programme, potential $25 billion in pleading that this should not

investment, creation of 30,000 jobs, reduced gas flaring etc, is being put in jeopardy by attempts to renege on promises that Nigeria gave to foreign investors that enabled the $15 billion investment historically attracted. “Whilst the executive (arm of government) has demonstrated full commitment to the need to keep the sanctity of the NLNG Act, the attempt by the legislature to amend the clear promises made to investors will cost the country quite a lot. "Apart from the relocation of investments in excess of $25 billion to other countries, Nigeria will also be opened to fines running into billions of dollars in international courts for reneging on agreements". He pointed that the incentives provided by the NLNG Act were normal in the LNG world, including in Qatar, Oman, Malaysia, Angola, arguing that outside the gas sub-sector, more generous incentives even in Nigeria, are contained in such legislation as the Oil & Gas Free Trade Zone Act.’’

‘Ghana will soon be self-sufficient in gas’

Armah-Kofi

rising from several months of suffering from fitful gas supply from Nigeria, Ghana says it has advanced far in its plan to become self-sufficient in gas supply soon. Minister of Petroleum, Mr. Emmanuel Armah-Kofi Buah, revealed this at a mid-year review meeting with heads of agencies under the Ministry of Petroleum. He said gas supply from the Jubilee oilfields to the gas plant

at Atuabo had resumed, while Ghana Gas and Tullow Oil Ghana Limited and its partners were finalising an agreement for the tying of gas pipelines from the Tweneboa, Enyenra and Ntomme, TEN, project to the Atuabo gas plant. The TEN project, which will produce its first oil on August 18, 2016, will begin the production of gas in the first quarter of 2018. Gas supply from Nigeria has, since August 2012, not been regular due to factors, including natural causes, industrial actions and Ghana’s indebtedness of more than $80 million to NGas, a Nigerian gas company. The unreliable supply of gas from Nigeria has affected electricity supply to homes and industries locally over the years. The minister also stated that work on the onshore gas reception facility for the ENI integrated Offshore Cape Three Points, OCTP, project at Sanzule in the Ellembelle District in the Western Region was also on course, he said. The facility, which has the capacity to produce 180 million standard cubic feet per day, mscf/d, sufficient to generate about 1,000 megawatts, MW, of power, comes with additional oil production of about 45,000 barrels per day.

Gas

2016 September, SweetcrudeReports

Global LNG prices slip as Nigeria shakes off output problems

LNG loading bay OSCARLINE ONWUEMENYI, September.? Several cargoes changed hands in tenders. Abuja

sian liquefied natural gas, LNG, prices were on the decline for most period of August and early September. The decline came as traders awaited the outcome of two tenders and Argentina turned away shipments due to mild weather curbing demand. Nigeria LNG shook off production disruptions caused by a pipeline leak last month with vessels now leaving the plant regularly. "The September loading programme shows no disruption to supply," one source said. In mid-August the plant canceled cargoes earmarked for project stakeholders, including 4-5 cargoes for Shell, 1 for Enel and 2 for Total, trade sources said. Gail India is set to award a purchase tender for one October cargo on Friday, while Exxon Mobil's Papua New Guinea LNG export plant is offering a cargo l o a d i n g i n l a t e

Indian Oil Corp bought two for October, and Conoco Phillip's Darwin project in Australia sold one each to Trafigura and Gunvor on a free-on-board basis, at $5.10 per mmBtu, traders said. BP sold a October cargo to Turkey's EGE Gaz for around $5.20 per mmBtu, trade sources said. On supply, Indonesian liquefaction plants at Bontang and Donggi Senoro offered additional shipments to their long-term partners and possibly spot buyers. The giant Gorgon facility in Australia is also set to offer more cargoes though spot tenders. The second production line at Gorgon is due to start up in the fourthquarter and the third is to begin in the second-quarter 2017, a Chevron spokesman said. Algeria's Sonatrach was still heard offering cargoes for October loading, traders said. Argentina's state-run buyer Enarsa said it had canceled one shipment and delayed three cargoes until next year.

S/Africa, LNG firms to discuss gas-to-power programme

he South African government, international gas developers and finance institutions will return to the South Africa Gas Options conference this October in Cape Town to address the requirements and opportunities associated with the country’s 3,126MW gas-to-power programme. Following high levels of international interest over the introduction of a standardised procurement process, the meeting will examine the critical steps needed to move from the impending Project Information Memorandum, PIM, towards the Request for Qualification, RFQ, and the associated investment opportunities surrounding the development of gas infrastructure. The programme has attracted high levels of interest from the private sector over the past 12 months, buoyed further by the recent call for expressions of interest for the appointment of strategic partners to assist state-owned companies in the development of a 600MW gas-fired power plant. Sean Friend, an Investment Director at Africa Infrastructure Investment Managers, AIIM, commented: “One of the key considerations in the gas-to-power programme in South Africa will be financing the additional infrastructure capacity

Gas turbine required to create a broader gas market, which will have to be bankable on the basis of the power station revenues.” Supported by the South African IPP Office and NERSA, the meeting will include an LNG to power master class, debates around infrastructure considerations and an update on the Role of the Gas Industrialisation Unit, GIU. The meeting is open to proven professionals active in the development or financing of power projects in Africa. Confirmed speakers for the event include Thabane Zulu, Director General, Department of Energy, South Africa; Karen Breytenbach, Head of IPP Office, Department of Energy, South Africa, Lena Mangondo, Head of Legal, IPP Office, Department of Energy, South Africa; as well as Gonzalo Ramirez, Director, South America, Excelerate Energy.

Gas

2016 September, SweetcrudeReports

Kachikwu says N'Delta may lose $80bn gas investment to crises Kachikwu

KUNLE KALEJAYE

inister of State for Petroleum Resources, D r . I b e Kachikwu, says the oil-rich Niger Delta region might lose $80 billion investment funds being put together by the government for projects in the region if people of the region do not embrace peace. The minister, who said the money is being sourced from China for the development of the gas sub-sector, stated this while in the region to discuss the way out of the growing militancy in the area. He said the only way the region could benefit from the new government was for them to work together with one united voice, adding that the $80 billion for the development of the gas sector in the region could only be utilised when there is peace. He, therefore, called on Niger Delta elders to caution the youths and urged them to drop their arms so that development could come to the region, stating that militancy would never be a solution to the Niger Delta problem. Kachickwu added that the

only way the region could rise above its challenges was for the people to sit down and discuss what they really wanted. According to him, the present government was looking at how to develop the region but is skeptical about injecting more funds into the troubled region. He explained that his findings revealed that the Federal Government has injected over $40 billion into the Niger Delta region with nothing to show for it, adding that despite all the money injected into the various interventionist agencies to make the region better, the funds have been mismanaged by those put in charge. While pledging his commitment to the Niger Delta struggle, Dr. Kachikwu added that the people could not afford not to develop the region in their life time. On his part, Ijaw leader, Chief Edwin Clark, who spoke during the visit, said the people of the region were ready to work with the minister to ensure that the needed peace in the region comes to fruition He advised the minister not to listen to any group that

While pledging his commitment to the Niger Delta struggle, Dr. Kachikwu added that the people could not afford not to develop the region in their life time

comes to him in the name of the Niger Delta people, saying any group that comes to him must have the backing of the leaders of the region. Clark added that the Niger Delta coastal states would continue to speak with one voice, noting that the ability of the people in the region to converge in one place on short notice was what made them strong.

NLNG awaits govt directives on downstream investment

NLNG plant, Bonny, Rivers State

he Nigeria LNG Limited, NLNG, is awaiting directives from the Vice President's office to commence investment in the downstream sector of the Nigeria’s petroleum industry, the company has said. General Manager, External Relations, Mr. Kudo Eresia-Eke, told our correspondent in Lagos that the company’s investment initiative

can only be realised with support from the Vice President's office. He explained that there was an initiative coming through the office, which aims to address bottle-necks in the downstream subsector with particular reference to Liquefied Petroleum Gas, LPG, also known as cooking gas. The LPG business in Nigeria is currently bedevilled by infrastructure challenges, forcing off-takers to increase price of the product at will. Eresia-Eke explained that the new initiative through the office of the vice president would likely articulate the interest of all players in the LPG sector while NLNG will support the process. He urged Vice President Yemi Osinbajo to take the lead and bring everybody to the table while NLNG continues to support it. “We are optimist that he is going to roll out a plan and that plan will serve the interest of a number of stakeholders within that area,” Mr. Eresia-Eke said.

Power

2016 September, SweetcrudeReports

Power distribution substation

Bulk trader moves to deflect poor remittances by Discos to Gencos OSCARLINE ONWUEMENYI, Abuja

he Nigerian Bulk Electricity Trading Plc, NBET, also known as the Bulk Trader, has assigned to the electricity generation companies or Gencos the right to draw down payments for power supplied but not paid for by electricity distribution companies or Discos from the Letter of Credits they lodged as payment guarantees with their banks. NBET said it had payment guarantees from bankers of eight Discos, and had devised a new structure which vested on the Gencos, the rights to directly demand for payment from the bankers when Discos defaulted in their remittances to them. NBET's Acting Managing Director, Mr. Waziri Bintube, said the agency had worked out a new structure to enable the Gencos make direct payment demands from banks where the Discos lodged their letters of credit on its behalf. The letters of credit serve as payment guarantee for energies generated by the Gencos, bought

by NBET and sold to Discos. It is a form of financial security on power sold to Discos. "When we are buying power, the main source of payment is remittance from the Discos. They also give us letters of credit from their banks, and it is like a guarantee from their bank to say should they fail to pay us, their banks will pay us. "Out of the 11 Discos, about eight have given us that guarantee and it is just that we have not called on them because we are very sensitive to the impact it might have on the banking industry but we have formed a structure and assigned our rights on those guarantees to the Gencos who can now call their banks and make them pay if the Discos fail," said Bintube. He confirmed that Gencos were largely affected by the poor remittances from the Discos, and that assigning rights over the Discos' payment guarantee to them was part of efforts to keep them working. The Bulk Trader explained that the strategy was informed by the poor revenue remittance performances of the Discos, as well as their reported disregard for market rules governing the

He confirmed that Gencos were largely affected by the poor remittances from the Discos, and that assigning rights over the Discos' payment guarantee to them was part of efforts to keep them working

country's electricity market. R e c e n t l y, t h e D i s c o s ' remittances have largely fallen to an average of 40 per cent, due largely to drop in power supply and low revenue collections. This situation has however impacted heavily on the operations of the Gencos, which also raised the alarm that debts owed them on power supplied was gradually choking them out of operation.

NERC intensifies campaign on energy saving bulbs T

he Nigerian Electricity Regulatory Commission, NERC, wants electricity users to adopt energy saving bulbs and standard appliances to complement its energy efficiency programmes. Acting Chairman of the Commission, Anthony Akah, who made the plea at a seminar on energy efficiency in Abuja, said the call became imperative in view of the serious challenge of high estimated billing due to poor metering by the distribution companies (Discos) and low power generation. He said NERC had put measures in place to

accelerate metering through clos e monitoring of the Discos' metering roll out plan. He noted that the Commission had initiated a programme designed to ensure energy efficiency and conservation, adding that that efficient utilisation of available energy was paramount. According to him, the programme entails the use of standard electrical appliances and equipment as well as machinery in the nation's electricity value chain.

2016 September, SweetcrudeReports

Power

NIPC rues impact of poor power supply on investment

Trading in near darkness

cting Executive Secretary of the N i g e r i a n Investment P r o m o t i o n Council, NIPC, Hajiya Ladi Katagum, says poor power s u p p l y a n d o t h e r infrastructural challenges may disrupt efforts by the Federal Government to diversifying the economy from oil. Katagum, who stated this in an interview with journalists in Abuja, regretted that the infrastructural challenges faced in the country has blunted the country’s investment appeal to investors. She said, “We have looked at all the indices for investment and Nigeria is lagging behind in most of them. First and foremost is the power supply challenge. You find some manufacturers devoting 40 per cent of their cost of production to power. “So, before you even start producing, you have spent 40 per cent of your budget on power. The infrastructure is not there. The skills are not there. Everything for promoting a place as an investment destination is not there. She added that another major headache for businesses in the country is the issue of foreign exchange. “That is the single

major impediment to doing business in Nigeria now. Most of them take loans and they borrow in dollars. If you borrowed one dollar at N150, now you are repaying at N350. With that, whatever you have done has totally gone. The other issue is infrastructure, particularly power. If power could be gotten right, 50 per cent of the problems are solved.” She noted that the Council has re-focused its goals towards specific non-oil sectors that government is interested in. She said, “We have priority sectors like agriculture being n u m b e r o n e , p o w e r, infrastructure and solid minerals. I have visited the solid minerals and water resources ministries and I'm visiting power and agriculture. We discuss with them the projects that they have. They give it to us to promote it. Some of them have projects that have been there for a long time with nobody to buy into it. We repackage and promote them to investors." Katagum noted that, “Earlier this year, the Organisation of Islamic Countries (OIC) had a forum for investment promotion agencies within the OIC and we were invited. The

main aim was to see how investment could be promoted among members. They, more than any one, are feeling the impact of the fall in oil prices. “They are looking for where to invest. For the first time, Saudi is charging for visas. One of the biggest investments in Nigeria recently came from Oriental Foods, and the company is from the Middle East. It is one of the biggest food manufacturing companies in Nigeria located at Ibadan. She explained that the NIPC has attracted some big investments from different parts of the world, noting that the single biggest investment in Nigeria came from the United States. “ T h e A m e r i c a n To w e r invested more than a billion dollars and they are going to invest another billion over the coming years in the telecommunications sector. And all the money they made, they did not take anything out. They reinvested it in Nigeria. They are not portfolio investors. They are reinvesting. They are here for a long time. They are not going anywhere. So, that has been the single largest investment in Nigeria in the past ten years.”

N93bn debt: No plans to disconnect MDAs, military installations - ANED The Association of Nigeria Electricity Distributors, ANED, the umbrella body representing the 11 electricity distribution companies in Nigeria, over the weekend said it would not disconnect power supply to Government Ministries, Departments and Agencies, MDAs, and military installations over the N93 billion outstanding debts. The Executive Director, Research and Advocacy of ANED, Mr Sunday Oduntan, who disclosed this, said the Discos are more interested in negotiating and making sure the issues are resolved amicably. He spoke against speculations that Discos may disconnect MDAs and other outfits for failure to settle their indebtedness to the distribution companies. Oduntan added that the group is taking the Minister of Works, Power and Housing, Mr Babatinde Fashola, on his promised that government was making arrangement for the payment. He said that Discos believed that the Fashola would always fulfil his promise, adding that the negotiation with the government representatives would be positive. “We are aware of the present challenges faced the present administration in the economic sector and its efforts in ensuring regular electricity supply to all and sundry. “Disconnection of all MDAs will only add to these challenges, so we are engaging the Federal Government in a negotiation at present and we believed that this will resolve the financial crisis in the sector,” he said. He urged electricity consumers nationwide to ensure prompt payment of the electricity bills. ANED announced in May that all historic debtors, including residential, commercial, industrial and government establishments across the three tiers of government would be disconnected due to unpaid electricity bills. ANED said that government establishments, including the military and security agencies alone, owed the DISCOs over N93 billion.

Power

2016 September, SweetcrudeReports

Electricity workers

Electricity workers call for probe of TCN's 'under performance' under Manitoba OSCARLINE ONWUEMENYI, Abuja

he Senior Staff Association of Electricity and Allied Companies, SSAEAC, has urged a probe of the "poor management and underperformance" of the Transition Company of Nigeria, TCN, under Manitoba. The association, which alleged that corruption in the appointment of Canadian energy firm, Manitoba Hydro International, MHINL, to manage the Transition Company of Nigeria, TCN, alleged that there was no improvement in power transmission during Manitoba's four years of managing the TCN. Rather than make the desired progress, SSAEAC said corruption and politicisation of the power sector had compounded the operational processes of TCN under Manitoba. According to SSAEAC President, Mr. Chris Okonkwo, in an interview, there was no significant improvement in

power since MHINL took charge four years ago. “A look at the calibre and number of staff of MHINL evokes crass disdain for the quality of Nigerian professionals in TCN, who are subjected to men and women who are mediocre in the core business of TCN, and who use the Nigerians to do the little that is recorded as success of the contract, with outrageously high fees paid to the MHINL for little or no work done,” Okonkwo stated. Describing the contract that brought in Manitoba as political, the SSAEAC president alleged that from inception till date, Manitoba exploited the weakness in the system, adding that, “they are morally and ethically bankrupt and should be investigated if the current war against corruption will have a meaning.” He warned the Federal Government against another extension of the Manitoba contract, which was being pushed for by MHINL, saying it would lead to industrial action from workers. According to him, it was

necessary for the Federal Government to look inwards by sourcing local contractors and professionals in the sector. But he lamented that most of the firms, who bid for stakes in the power sector were insincere about their ability to inject funds into the sector, querying: “When will government open its eyes to see that the investors today are not real investors?" Okonkwo stated that the investors, who should have brought in investment and engaged technical partners, turned out to be hiring them temporarily for the bidding purpose, which was why the socalled investors were left to do a business they knew nothing about. The Federal Government earlier this month terminated its contract with Manitoba Hydro International, which focuses on transmitting electricity and natural gas to utility companies, as the governments refused to renew the contract, after it expired on July 31, forcing Manitoba to hand over management of TCN back to the government.

Guinness partners WaterAid to construct solar-powered water facilities

Solar powered borehole

uinness Nigeria Plc a n d Wa t e r A i d Nigeria have partnered to construct two solarpowered water facilities in Gwam, Ningi Local Government Area of Bauchi state to deepen health and sanitation practices in the state. T h e G u i n n e s s

Nigeria/WaterAid Gwam water facility, which was formally unveiled recently, is one of two major water schemes which the brewing giant has delivered this year in collaboration with its international non-governmental organisation partners, and the 34th site for the Guinness Nigeria, Water of Life initiative in Nigeria. The Gwam water scheme – which comprises two solar-powered boreholes and two blocks of toilets – will benefit about 20,000 people. Mr. Sesan Sobowale, Guinness Nigeria’s Corporate Relations Director, used the occasion to reiterate the company’s commitment to initiatives that improve access to safe water. He noted that Guinness Nigeria will continue to play a leading role to promote water stewardship in Nigeria while thanking Water Aid for its transformational work in promoting health and hygiene in the country.

Power

2016 September, SweetcrudeReports

Naira devaluation impacts power firms' capacity to fix networks

Electricity transmission lines

igeria's largest electricity companies say t h e y a r e struggling to repair their networks because imports of spare parts had become too expensive due to naira devaluation. The companies, which bought over the assets of the Power Holding Company of Nigeria in 2013 when the Federal Government began the privatisation of the then national power monopoly, said that with the devaluation of the naira, repairs of equipment had become almost impossible. "In 2013, exchange rate was 150 naira per dollar. Today it is 310. How can we repair, equip, acquire new turbines at this rate of 310 naira per dollar and yet still operate with an old tariff?," the companies said as they hinted of an imminent shut down in power supplies. The naira has lost 40 percent of its value since Nigeria ditched its 16-month-old peg of 197 naira to the dollar in June in a bid to lure back

foreign investors who fled both the equities and bond markets after the plunge in crude prices. Added to this, lack of gas supply due to vandalism of pipeline by Niger Delta militants has seen power generating plants lying idle. Specifically, the power generating companies said they had about 5,000 megawatts of spare capacity which has no access to gas.

Added to this, lack of gas supply due to vandalism of pipeline by Niger Delta militants has seen power generating plants lying idle

NERC promotes renewables to attract investment to power sector

Windmill energy

he Nigerian Electricity Regulatory Commission, NERC, says it believes in the deployment of renewables to revive the energy sector, while enticing investments. Along that line, the agency said it has made some amendment to accommodate and promote investment in the countryâ&#x20AC;&#x2122;s renewable energy sector. Acting Chairman of NERC, Dr. Anthony Akah, stated this at a seminar in Abuja dedicated to renewables. Akah noted that the current challenges brought about by conventional power generation

presented renewable energy perfect conditions to become the energy source of choice for consumers in Nigeria. Amendments endorsed by NERC include an attractive renewable energy feed-in-tariff and a regulation that ensures that local electricity distribution companies (Discos) source up to 50% of their power from renewable sources. Another adjustment will be a long-term cost recovery cycle as additional significant incentive to make the country become a choice destination for renewable energy investors, the electricity regulator noted.

However, Akah, who was represented by Deputy General Manager in Renewables, Research and Development, Dr Haliru Dikko, admitted that there are still challenges in developing renewable energy projects in Nigeria, adding that the commissionâ&#x20AC;&#x2122;s regulations have basically amended the challenges and unlocked investment opportunities in the sector. In his presentation, he explained the Feed-in Tariff Regulations for Renewable Energy Sourced, which is targeting at least 1,000MW of electricity from renewables by 2018, and also allotted respective volumes of renewable energy procurement to Ikeja, Ibadan, Eko, Kaduna and Kano Discos. Akah noted that, â&#x20AC;&#x153;The Act gave NERC the authority to issue licenses for power generation over 1MW and also empowered NERC to set tariffs for operators. He added that NERC has streamlined the licensing process.

Power

2016 September, SweetcrudeReports

Electricity facilities

TCN dismisses ‘weak link’ accusation by Discos OSCARLINE ONWUEMENYI, Abuja

anaging Director and C h i e f Executive Officer of the Transmission Company of Nigeria, TCN, Engr. Abubakar Atiku, has taken a swipe at some of the electricity distribution companies in the country, accusing them of unnecessarily rejecting power supplied to them and turning back to describe the TCN as the weak link in electricity supply value chain. According to Atiku, who spoke in company of the TCN Executive Directors at a press briefing in Abuja, said TCN was set to complete 22 projects from 2016 budget as part of efforts to meet President Muhammadu Buhari’s aspiration to achieve 10,000MW. He said TCN has mapped out strategies to boost its transmission or wheeling capability to 8,200 megawatts, MW, by the end of 2018. He said the company intends to achieve this feat with the completion of eight new projects

in the year 2018. He noted that as part of efforts to realise the 10,000MW as envisaged in the year 2019, the company’s fiveyear expansion plan has 56 projects to be completed which will lead to a total wheeling capacity of 11,500MW by the year 2019. “The plan has also been carefully developed with the aim of realising an uninterrupted power supply with the realisation of 20,000MW by the year 2022. "The on-going and new projects to facilitate the achievement of the five-year expansion plan cannot be realised without adequate financial resources," he stated. Atiku noted that TCN would be better under the management of local team which took over from Canadian Manitoba Hydro International whose management contract terminated on July 31, 2016, assuring that all contracts entered will be executed in line with contractual obligation agreed by all

parties entered into under Manitoba remain valid. “Let me also reassure Nigerians and indeed international community, our stakeholders and international funding agencies that all commitments with Transmission Company of Nigeria under the management contractors remain valid and all contracts entered will be executed in line with contractual obligation agreed by all parties," he said. “On this note, l wish to allay the fears expressed in some quarters that with termination of the m a n a g e m e n t , o u r concessionary loans and grants by multinational – funding agencies such as World Bank will be withdrawn. "Let me make it categorically clear that, Power Holding Company of Nigefria (PHCN) and indeed TCN had been relating with these funding Agencies prior to the coming of the Management Contractor and will continue to relate in stronger terms with the Nigerian management in place,” he noted.

PHEDC replaces 5,000 weak cross-arms to improve network

s part of efforts to reinforce its network and deliver quality power supply to customers, the Port Harcourt Electricity Distribution Company, PHEDC, has replaced over 5,000 weak and ageing cross-arm cables with fibre ones. Chief Executive Officer of PHEDC, Mr. Jay McCoskey, said during a safety meeting in Port Harcourt, that the replacement of the cross arms was carried out in Akwa Ibom, Bayelsa, Cross River and Rivers states. McCoskey, who expressed satisfaction over the speed with which the technical department of the company replaced the old cross arms, noted that PHEDC would do everything possible to ensure that customers enjoyed quality power supply. He added that apart from network improvement, the company also placed premium on the safety of not only staff members but the public at large, hence the need to replace the equipment. “The company has spent millions of Naira to get the modern cross arms, and this is done to avoid any electrical accidents, either on the line or through wire cut, especially during the raining season.

Power

2016 September, SweetcrudeReports

Agency to enforce energy efficiency standards for appliances

Electric appliances

he Standards Organisation of Nigeria, SON, and the Nigerian Energy Support Programme, NESP, have disclosed plans to implement energy efficiency measures for some electronic products used in the country, adding that it’s critical for the country to adopt energy efficiency of equipment used in either residential or public buildings. SON’s Acting DirectorGeneral, Dr. Paul Angya, explained that his agency will facilitate access to information for consultants, set up and support the technical committee for air condition standards and labels that will support the promotion and creation of awareness in the country. “I believe that these recommendations, once approved, will not be difficult to implement because SON has been part of the committee,” Angya stated. He added that, “Already, equipment for the testing of lamps and refrigerators has been installed in SON. Equipment for the testing of air-conditioners will soon be installed.”

Explaining how the programme of the energy efficiency of equipment will be rolled out was, the head of the energy efficiency unit at NESP, Dr. Charles Diarra, said this would be done through the introduction of appropriate energy efficiency policies, measures and demand-side management programmes. Diarra noted that these policies would strengthen the regulatory and institutional framework, develop monitory and enforcement mechanisms, provide training to appliance and equipment professionals, and launch a public outreach campaign to promote energy efficiency in Nigeria, the media reported. According to him, the initiative will be focused on three main appliances namely, lamps, refrigerators and air conditioning with labels provided on each appliance, which identifies how much energy is being saved by using these efficient choices. Diarra added that his organisation was willing to give its backing to any resolution reached to help both efficiency in energy use

I believe these recommendations ,once approved, will not be difficult to implement because SON has been part of the committee,” Angya stated

in the country and the safety of electrical appliances. He further highlighted that NESP has been active in the Nigerian economy, using various planks of engagement, including e n e r g y p o l i c y, r u r a l electrification, capacity development and political reform support. Diarra added that his organisation has also supported the training managers in energy management efficiency, and that thus far, under its auspices, over 45 participants from 20 countries have been trained.

State signs MoU with Chinese firm on micro megawatt power project

Artistic impression of a micro megawatt power plant

he Katsina State government and a Chinese energy firm have signed a Memoranda of Understanding, MoU, to experiment a micro megawatt power model project across the state. This was among the six MoUs signed by the government and some Chinese and Indian companies during a weeklong trip by the state government delegation led by Governor Aminu Masari. Speaking with newsmen on the outcome of the journey, Masari said this renewable energy supply model could generate up to one megawatt per business cluster that intends to supply power to specific industrial or business areas. The Governor explained that this micro megawatt power model would ease power generation for small scale business owners that need energy to sustain production. He said other MOUs included that with an Indian firm on metal fabrication industry in the state while another would partner in the renovation and equipping of healthcare centres across the state. "We discussed also with a Chinese firm to establish an industrial park that would serve as a trade centre where different small and large scale investors would get market for their products," he said. Masari said the state government remained committed to boosting agricultural production and establishing agro-allied industries to process local farm produce, noting that the trip was fruitful as it would lead to industrialisation of the state.