Oil & Energy

As Jonathan Demystifies Power Sector

Published

15 years ago

January 31, 2011

When nine months ago President Goodluck Jonathan assumed office and assigned to himself the position of Minister of Power, not many Nigerians were excited. Their skeptism hinged on the obvious reason that in the past, both General Sani Abacha and Chief Olusegun Obasanjo took similar steps during their respective regimes by appropriating to themselves the position of Petroleum Minister, yet no concrete results were achieved in the petroleum sector.

Pundits were of the view that Jonathan’s appropriating the Minister of Power Portfolio to himself would not revive the ailing power sector as they regarded the step as mere government rhetorics.

The power sector was already characterized by very low generation capacity, poor distribution network and a fragile limited transmission network. The multinational oil companies responsible for gas supply to the nation’s power station in joint venture with the Nigerian National Petroleum Corporation (NNPC) were unable to supply gas as the militancy that ravaged oil activities in the oil-rich Niger Delta region led to blowing up of strategic oil and gas pipelines. The situation resulted in the power plants either being shut down while few functional ones were producing far below capacity. The resultant effect was that most Nigerians groped in darkness and scores of companies whose operations were frustrated as a result of high cost of alternative power supply left the country for other West African countries.

Added to the situation was the fact that efforts by Chief Olusegun Obasanjo and Alhaji Musa Yar’Adua to revive the ailing power sector suffered failure inspite of huge funds invested. The much touted 6,000 megawatts targeted by Yar’Adua in 2010 also failed. The question that was in the lips of must Nigerians then was what magic approach would President Jonathan adopt to revive the dying power sector?

However, not deterred by the challenge, Jonathan took some proactive and far-reaching measures to give a breathe of life to the nation’s powerless power sector. He sort for and appointed high brow professionals with enviable record to confront the challenges in the sector. He appointed Prof Bart Nnaji as his Special Adviser on Power and also created some committees on power.

To address the gas supply challenge, the Presidency summoned the management of the multinational oil companies and NNPC and they reached an accord on the strategies to supply adequate gas needed to energise the power stations.

After casting a wide look at the sector, according to Prof. Nnaji, Federal Government came to the realization that Nigeria’s electricity infrastructure needs are enormous such that government alone cannot meet these needs, hence the urgency to involve the private sector.

In his paper, “The Role of the Private Sector and Structured Financing in Solving Nigeria’s Power Supply Problems”, delivered at an International Power Roundtable organized by the Rivers State House of Assembly Committee on Power last year, the Special Adviser to the President on Power said only about 40% Nigerians have access to electricity supply and that to meet the electricity demand of the nation’ by 2020, distribution network has to grow at the rate of at least 6% each year against the current average growth rate per annum estimated below 1%.

On the large funding required, Prof Nnaji said about $50 billion was required over the next ten years. “Government capital outlays for all capital budget is $5 billion annually meaning that annual funding requirement has outstripped the capacity of government funding”, he regretted.

The Federal Government has no option than to let go its monopoly on electric supply and opened its door widely for both local and foreign private investors. The government has offered prospective investors in the power sector a five-year tax holiday to serve as an incentive to woo them.

To achieve same goal, Bureau of Public Enterprises (BPE) has commenced road shows in Lagos to enlighten investors on opportunities in the sector. BPE said apart from the five-year tax holiday, another incentive for investors in the sector is the World Bank’s instruments to insure their investment against political risks in the country and assured investors of a cost-reflective tariff system.

Aside the Lagos event, meetings are scheduled to be held with investors in Dubai, United Arab Emirates’ on January 24; London, United Kingdom on January 27; New York, United States on February 1 and Johannesburg, South Africa, on February 11. This came ahead of a February 18 deadline for the expression of interest in the eleven distribution companies, four thermal generating firms and two hydro power stations in Nigeria.

The eleven distribution companies which investors are expected to express their interest in include Port Harcourt Distribution Company Plc, Abuja Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, Enugu Electricity Distribution Company Plc, Eko Electricity Distribution Company Plc and Ibadan Electricity Distribution Company Plc.

Others are Ikeja Electricity Distribution Company Plc, Jos Electricity Distribution Company Plc, Kaduna Electricity Distribution Company Plc, Kaduna Electricity Distribution Company Plc, Kano Electricity Distribution Company Plc and Yola Electricity Distribution Company Plc.

The four thermal generating stations which investors are expected to show interest are Afam Power Plc, Sapele Power Plc, Ughelli Power Plc and Geregu Power Plc while the two hydro power stations are Kainji Power Plc, including Jebba Power station and Shiroro Power Plc which government intends to give out to private investors under a concession arrangement.

According to Minister of State for Power, Mr Nuhu Wya, the forum in Lagos was organized to showcase numerous opportunities available in Nigeria’s Power sector.

Inspite of the fact that most government efforts are at early stages, the administration of Goodluck Jonathan has already recorded some humble achievements. The meeting between Federal Government and oil multinationals over gas supply has yielded fruits as Nigeria National Petroleum Corporation said it has already surpassed its gas supply obligation to power stations across the country, in line with Federal Government’s aspiration.

The group managing director, Engr Austen Oniwon disclosed this to newsmen in Abuja and added that NNPC has also taken proactive measures to ensure sufficient gas supply to the new ones under construction upon completion.

At present power generation in the country has risen to 3,800 megawatts. Analysts view this as very impressive considering the fact that generation was below 2,700 mega watts when President Jonathan assumed office. Minister of States for Power, Mr Nuhu Way promised that by the end of this quarter, generation will get to 4,000 megawatts.

It is obvious that when the action plans come to full swing, the nation will hopefully actualize its dream of stable power supply which has eluded it for decades.

Nigerians have attested to the fact that power supply has improved in all parts of the country compared.

However, the agitation by staff of Power Holding Company of Nigeria (PHCN) over their 135% salary areas, casual status of alleged 10,000 workers and other welfare issues need to be addressed considering the fact that they are stakeholders in the reform agenda. Unfortunately, the electricity workers have dragged the government to Abuja High Court over the issue.

Sabotage by electricity workers who connive with criminals to remove power facilities may affect the new effort of the government. Similarly the issue of estimated metering adopted by PHCN workers do not guarantee transparency. Experts are of the view that credit card system be adopted as is the case in Telecommunication sub sector.

Another area that also needs to be addressed is the award of rural electrification projects to portfolio carrying politicians who either abandon such projects or execute them at substandard level.

There is need for the Federal Government to fast track investigations on allegations of fraud which runs into billion over past power projects.

Be it as it may, Goodluck Jonathan has shown that the power challenges which affect socio-economic lives in Nigeria can be tackled as his efforts has renewed hope of Nigerians.

Chris Oluoh

Oil & Energy

Resource Wars Are Here and Oil Is the First Casualty

Published

7 days ago

March 30, 2026

The Tide

In just over a year, the world saw several instances of a choked supply of commodities indispensable for today’s economies and military capabilities.

From China’s restrictions on rare earths and critical minerals supply to the de facto closure of the Strait of Hormuz, policymakers and analysts began to realize that the control of oil, critical minerals, rare earths, and magnets is as important as building and maintaining stockpiles of advanced weapons. It also became clear that without these resources, defense and military capabilities could be weakened. The actual arms race goes hand in hand with the new battle for the resources that underpin economic, manufacturing, and advanced military development.

“Great-power competition has returned to basics: who controls the physical resources that modern economies and militaries run on,” Alice Gower, a partner at London-based political-risk advisory firm Azure Strategy, told the Wall Street Journal.

“Energy, critical minerals and industrial capacity are leverage, not just economic assets,” Gower added.

The war in the Middle East and the blockage at the Strait of Hormuz laid bare the reality of choked energy supply. The world’s most vital oil and LNG chokepoint, through which 20% of daily global trade flowed before the Iran war, has been essentially closed for most tanker traffic for more than three weeks.

The massive supply shock, the worst disruption in the oil market in history, showed that the world is dependent on energy resources, and that geography and actual physical supply matter. With so much oil and gas stranded in the Middle East, oil prices spiked to above $100 per barrel, natural gas prices in Europe doubled, and Asian spot LNG prices hit multi-year highs.

The precarious situation in the Middle East is reverberating across Asia, the region most dependent on oil and LNG supply from the Persian Gulf. Asian refiners pay sky-high premiums for non-Middle Eastern crude, many are considering cutting or have already cut processing rates, and countries have started to enact fuel-preserving measures, from four-day work weeks to bans on fuel exports.

In Europe, the gas refilling season will be the toughest yet, as Asia is outbidding Europe for spot LNG supply after Qatar’s LNG is effectively sidelined and full capacity may not return for up to five years following Iranian missile attacks last week.

Even the ‘energy independent’ United States, the world’s top oil producer, is not independent when it comes to global supply shocks of such magnitude.

The national average price of gasoline is approaching $4 per gallon nationwide, more than $1 a gallon compared to a month ago, before the start of the war.

Oil is a global resource, traded on a global market, and prices reflect fundamentals, although they have been driven by hectic trading activity on geopolitics in recent weeks. But the fundamentals show that there is no resource available to plug the gap that has opened in Middle Eastern supply. Producers are slashing output due to a lack of storage capacity, which further delays a rapid recovery in supply when this mess ends.

All this goes to show that whoever controls the Strait of Hormuz has enormous leverage on inflicting global economic pain.

While the world is focused on the Strait of Hormuz, the race for rare earths and critical minerals continues, with the U.S. and Western countries scrambling to dent China’s dominance.

Since China restricted exports of rare earth elements early in 2025, Western countries have raced to create mine-to-magnet supply chains to reduce dependence on Chinese supply in the key military and automotive industries.

China holds a 59% share of the mining of rare earths, 91% in refining, and a whopping 94% in magnet manufacturing, the International Energy Agency (IEA) estimates.

The U.S. has responded by taking stakes in minerals mining companies, the launch of a U.S. Strategic Critical Minerals Reserve, known as Project Vault, and is leading efforts to break the Chinese stronghold on the pricing of these minerals critical for the defense and auto industries and national security.

Chinese dominance could be eroded, but it would take years.

Still, rising neodymium-praseodymium (NdPr) supply from countries like the U.S. and Australia is set to reduce China’s market share to 69% by 2030 from 90% in 2024, Bloomberg Intelligence (BI) said in new research this month.

“We’re seeing a surge in rare-earth investment as modern technologies demand more critical materials,” said Jack Baxter, Global Metals & Mining Analyst at BI and co-author of the report.

“That said, we anticipate a significant shortfall in supply due to trade uncertainties, with lead times as long as 10 years to get new material out of the ground,” Baxter added.

“This will give pricing power to the few producers that currently are able to supply critical materials outside of China, fracturing the globalized market.”

Amid fractured markets and high geopolitical uncertainty, one thing is certain – the next arms race, alongside the actual arms race, will be for control of key resources such as oil and critical minerals.

By Tsvetana Paraskova

Oil & Energy

Transcorp Energy, Renewvia Partner On Renewable Energy Gap

Published

7 days ago

March 30, 2026

The Tide

Transcorp Energy Limited and Renewvia Solar Nigeria Limited have signed a Memorandum of Understanding to jointly develop renewable energy projects across Nigeria.

The move is aimed at addressing the persistent power deficit that has crumble businesses in the nation.

The agreement also outlines a longer-term plan to expand operations across Africa, positioning both firms to tap into growing demand for clean and reliable electricity.

The partnership would target commercial, industrial and residential consumers, as well as underserved communities, through a mix of off-grid and grid-connected energy solutions.

Beyond electricity provision, the collaboration would explore the aggregation and monetisation of Renewable Energy Credits generated from the projects, adding a commercial layer to the clean energy rollout.

The Managing Director and Chief Executive Officer, Transcorp Energy, Chris Ezeafulukwe, said the initiative aligns with the company’s broader strategy to expand access to sustainable power.

He noted that combining grid and decentralised energy systems would enable the company to deliver reliable electricity directly to end-users across different segments of the economy.

Chief Executive Officer of Renewvia, Trey Jarrard, described Nigeria as a critical market for the company’s African ambitions.

According to him, the partnership provides a platform to scale operations rapidly by leveraging established infrastructure and local expertise, while delivering cost-effective and resilient energy solutions.

Both companies said the agreement lays the foundation for a scalable pan-African renewable energy business, capable of supporting diverse markets and accelerating the continent’s transition to cleaner power sources.

The collaboration comes amid increasing pressure on governments and private sector players to deploy sustainable energy solutions to bridge electricity gaps, reduce reliance on fossil fuels, and support economic growth across Africa.

Oil & Energy

IYC Tasks Niger Delta Governors On Oil Field Bidding ….Decries Exclusion of Host Communities

Published

7 days ago

March 30, 2026

The Tide

The Ijaw Youth Council (IYC) Worldwide has raised concerns over the continued exclusion of host communities from the governance of oil resources, urging Niger Delta governors to take decisive steps by bidding for oil blocs and marginal fields.

The council warned that failure to act would allow external interests to continue dominating the region’s oil assets, despite their location within host communities.

Secretary-General of the council, Maobuye Nangi-Obu, started this at the stakeholders’ meeting organised by the Pipeline Infrastructure Nigeria Limited , with participants drawn from Rivers, Abia and Imo States, in Port Harcourt, recently.

“It is time for state governments in the Niger Delta, especially Rivers State, to form oil companies that can bid for marginal fields within their territories”, he said.

Nangi-Obu expressed concern over the reported listing of about 25 marginal oil fields for allocation, noting that many were located in host communities but allegedly being assigned to non-indigenes.

In his words “They sit in Abuja and decide what happens in our region, yet we are not part of the oil governance of our own resources”.

He explained that marginal fields, though considered uneconomical by major oil firms, remain viable for indigenous operators, adding that their allocation had continued to fuel grievances in the Niger Delta.

The IYC scribe also warned of the implications of directional drilling, describing it as a growing threat to host communities.

“There could be oil wells in your community, and somebody elsewhere could be drilling that oil without your knowledge,” he cautioned.

On environmental concerns, Nangi-Obu condemned the persistent gas flaring in the region, blaming both international and local operators for failing to invest in gas processing infrastructure.

He, however, commended Pipeline Infrastructure Nigeria Limited for its engagement with host communities.

“Pipeline Infrastructure Nigeria Limited is doing the right thing by engaging stakeholders. Not all companies are doing what they are doing,” he stated.

Traditional rulers at the meeting, further acknowledged improvements linked to the company’s activities in their areas.

The Eze Ekpeye-Logbo, King Kevin Anugwo, represented by Dr Patricia Ogbonnaya, noted that “aquatic life that disappeared due to pollution is gradually returning,” attributing the development to improved environmental conditions.

Similarly, Chairman of the K-Dere Council of Chiefs, Chief Batom Mitee, said, “There is now peace in our community,” stressing, increased oil production must translate into tangible benefits for host communities.

By: King Onunwor