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Challenges And Prospects In Nigeria’s Petroleum Industry

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Precisely on Sunday, Jan. 15, 1956, Shell D’Arcy Petroleum discovered oil in commercial quantity in Oloibiri in the present day Ogbia Local Government Area of Bayelsa State.

The discovery elicited a carnival-like celebration as it effectively jump-started the development of modern Nigeria, utilizing the vastness of its oil resources.

By the early 1970s, crude oil exploration had reached its peak as an estimated two million barrels of crude oil were produced from the nation’s oil fields daily.

By divine Providence somehow, a son of the Niger delta region of the country , President Goodluck Jonathan, who was barely a year old at the time of the oil discovery — has today become the nation’s Head of State, presiding over the management of the nation’s oil resources, among others.

The occasion of the nation’s 51st independence anniversary has thus afforded perceptive analysts the opportunity to appraise the continued relevance of petroleum resources to the nations’ development despite daunting challenges.

The Group General Manager, Public Affairs Dept., NNPC, Dr Levi Ajuonuma, said recently, for instance, that the efficient management of the petroleum industry had been the key to the economic development and transformation of the nation.

How far this viewpoint goes with Nigeria’s teeming population of analysts is a matter for conjecture but suffice it to say that, no doubt, crude oil remains the highest contributor to the nation’s Gross Domestic Product (GDP).

By a conservative estimate, the contribution of the oil sector is put at 90 per cent, even as Nigeria’s crude oil is highly rated in the international oil market, besides the country being a key player in the affairs of the Organisation of Petroleum Exporting Countries (OPEC) – the club of world’s oil producers and exporters.

While many Nigerian have viewed crude oil discovery as a blessing for the nation, some critics say that it heralded some national drawbacks, especially the drastic decline of agriculture, which had before the discovery of oil been the mainstay of the nation’s economy.

Clearly, therefore, the sector has played a dominant role in Nigeria’s economy as it now accounts for about 90% of her gross earnings. This dominant role has regrettably pushed agriculture, the traditional mainstay of the economy in the early fifties and sixties, to the background.

Since the 1950s when the export of oil started, Nigeria has gradually emerged as a major world supplier of crude oil and an influential member of the Organization of Petroleum Exporting Countries (OPEC).

No doubt, the vast earnings from crude oil has facilitated infrastructural development in the country as well as improved the living standards of the people, though some critics say that more could have been achieved if the revenues from the sector had been judiciously utilized by the nation’s successive leaders since the oil boom years.

Critics have been quick to point to the perceived neglect and the environmental degradation of the Niger Delta region of the nation, where the nation’s oil wealth is derived.

Such discontentment, analysts say, inevitably bred the youth restiveness, insecurity and all manner of social upheavals which plagued the region until very recently.

These, adversely affected the nation’s oil flow and export and by implication led to a downward trend in the nation’s revenue earnings.

The upheavals, nevertheless, culminated in the inception of the Amnesty Programme for Niger Delta militants by the Federal Government under late President Umaru Yar’Adua, which is still ongoing and providing some kind of succor to the aggrieved youths and communities in the area.

Though oil production in the region has picked up since a relative stability has returned to the Niger delta region, the price fluctuations in the international oil market have often created some economic problems for member nations of OPEC, including Nigeria.

Such price instability and security threats in the region have posed serious economic challenges to the country, even as some economists have asked the Federal Government to strive to diversify the economy by reviving the nation’s agricultural sector, which had been neglected.

“The epileptic shifts in the international oil prices and instability in the Niger delta region have made the nation’s economy very vulnerable,” said an economist, Dr Johnson Abejide.

Observers say that despite the multi-billion dollar investments and infrastructural development the sector has attracted over the years, it remained a paradox that the country’s poverty index is still embarrassing to the citizens.

Stakeholders in the oil sector of the economy have alluded to wide-scale corruption and inefficiency in the petroleum industry over the years, which negated the people’s expectations of development from the huge proceeds from crude oil sales.

“There have been lack of transparency, accountability and non-implementation of reforms in the sector over the years and this has limited the nation’s potential in the sector,” said Abejide. That Nigeria has subscribed to the protocols of the Extractive Industries Transparency Initiative, a global organization seeking transparency and efficiency in governance, is somewhat of a development welcomed by many citizens.

In April last year, President Jonathan signed into law the Nigerian Local Content Development Act, which among other things, seeks to develop the indigenous content of the oil sector, with a view to boosting the economic development of the nation. “Expenditure in the industry must transcend returns in terms of revenue and also translate to local capacity, increased technology growth, jobs for Nigerians, capacity to operate and maintain assets and develop critical facilities and infrastructure to support performance of work scopes in Nigeria’’ Jonathan had said.

As one of the immediate gains of the act, the use of made-in-Nigeria pipes for pipeline installations by oil companies is on the ascendancy and this, analysts insist, is capable of enhancing job opportunities in the country. The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, on her part has vowed to continue with the reforms she initiated in the oil industry, with a view to moving the nation’s economy forward.

Industry analyst express the viewpoint that the strict implementation of all enabling laws for the oil industry, and in particular, the passage of the Petroleum Industry Bill (PIB), still pending at the National Assembly, will go a long way to transforming the petroleum sector for the development of the nation.

As Nigerians continues to celebrate her 51st independence anniversary, stakeholders in the industry challenge the Federal Government to develop the political will to strictly enforce all laws in the industry and thus plug all loose ends the exist.

Jimoh writes for News Agency of  Nigeria.

Muyideen Jimoh

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Oil & Energy

Solar Firm Targets 30m Nigerians By 2030

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Greenlight Planet, a global leader in solar home energy products, has delivered clean energy access to more than two million individuals in Nigeria.
On a mission to power, the lives of the underserved, Greenlight Planet began distributing its Sun King solar home energy products in the country in 2011. The company has focused on rapid innovation of its product offerings and distribution strategy ever since.
Speaking on Greenlight Planet in Nigeria, Global Business Leader,  Sun King EasyBuy, Mr DhavalRadia, said, “Over the last 7 years, we have sold more than 500,000 life-changing Sun King solar solutions in Nigeria through strategic distribution partnerships and our own pay-as-you-go distribution channel.
Customers have been quick to recognise that an investment in Sun King products pays for itself over time, with several customers experiencing dramatic improvements in household savings, increased productivity for their small businesses and additional study–time for their children.”
He added that the quality and reliability of Sun King solar home systems has helped the organisation build a loyal customer base over time. “While we are humbled by the warm acceptance of our products so far, for us this is just the beginning to reaching the 101 million individuals still living without basic access to electricity in Nigeria. To ensure that our products are affordable for even the most cash-constrained households, we launched our ‘EasyBuy’ pay-as-you-go distribution channel in early 20173 .
According to him, Sun King products enabled with EasyBuy (PAYG technology) now allow potential users with limited access to financing to pay for their Sun King products in small instalments over time. “With twenty-four flagship Sun King stores across 23 active states, and a large network of nearly 1,200 local sales agents (“Sun King Energy Officers”), the Sun King EasyBuy door-to-door sales channel is accelerating Greenlight Planet’s growth in Nigeria while also boosting employment opportunities within local communities”, he said.
He said that the organisation’s vision was to establish a world-class distribution and energy financing eco-system for the vast off-grid populations of rural Nigeria. “With our rigorous efforts and continued innovation, our goal is to power 30 million lives by 2030 in Nigeria.

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FG To Achieve 40% Switch From Fuel, Other Products

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The Federal Government is targeting to achieve a 40 per cent energy switch from the consumption of Premium Motor Spirit (petrol), Dual Purpose Kerosene (kerosene) and Automotive Gas Oil (diesel), to the use of Liquefied Petroleum Gas.
According to the government, efforts are currently intensified to promote the wider use of LPG in households, power generation, auto-gas and industrial applications.
The government disclosed this through the Federal Ministry of Petroleum Resources in a document obtained by our correspondent in Abuja on Friday on the achievements of the FMPR between 2016 and 2018.
Providing explanation on its LPG penetration programme, the ministry stated that the Federal Government initiated the LPG Expansion Programme in order to effectively drive the switch to LPG consumption across the country.
It said, “The LPG Penetration Framework is designed to reduce the national energy consumption of PMS, DPK, AGO by achieving a 40 per cent fuel switch to LPG in 10 years.
“The programme will also promote the wider use of LPG in households, power generation, auto-gas and industrial applications towards the attainment of five million metric tonnes domestic utilisation and creation of an estimated 500,000 job opportunities nationwide in five years.”
The FMPR noted that overall, improvements in the standard and quality of living in rural communities were also expected for the programme.
It said the LPG Penetration Programme along with the Nigeria Gas Flare Commercialisation Programme were components of Nigeria’s intended nationally designed contributions under the Paris agreement for reducing annual greenhouse gas emissions by the year 2020.
On the NGFCP, the government stated that the programme was a key component of the Nigerian Gas Policy which had the aim of reducing the environmental and social impact caused by flaring of natural gas, protect the environment, prevent waste of natural resources, and create social and economic benefits from gas flare capture.
“The design of the key programme transaction, commercial framework and documentation have been completed. When fully implemented it will improve gas supply for power generation, industrial use and LPG penetration in the economy,” the FMPR said.
In November, say that the Federal Government was targeting a revenue of $1bn annually and a total of 300,000 direct and indirect jobs from the commercialisation of flared gas.
The government said flared gas could be harnessed to stimulate economic growth, drive investments and provide jobs in oil producing communities and indeed for Nigerians through the utilisation of widely available innovative technologies.
In the NGFCP document obtained by our correspondent in Abuja, the NGFCP Programme Manager at the FMPR, Justice Derefaka, stated that the Federal Executive Council approved the NGFCP as the mechanism for implementing Nigeria’s commitment to eliminate routine gas flaring.
The government stated that the recently gazetted Flare Gas (Prevention of Waste and Pollution) Regulations 2018 was the legal basis for the implementation of the NGFCP and the payment regime (penalties) for gas flaring.
It stated that the regulation adopted the polluter pays principle, similar to a carbon tax, adding that “results of work done to trigger up to 85 projects that will utilise flared gas, generate approximately 300,000 direct and indirect jobs and annual revenue generation/Gross Domestic Product impact estimated at $1bn/annum are also highlighted.”
The NGFCP is developed by the FMPR, Nigerian National Petroleum Corporation, Department of Petroleum Resources and the implementation team of the NGFCP comprising of adviser teams from the World Bank and USAID under the leadership of a ministerial steering committee that reports to the Minister of State for Petroleum Resources.

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EEDC To Deal With Buyers Stolen Electrical Installations

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The Enugu Electricity Distribution Company (EEDC), says it will redouble efforts to deal decisively with buyers of stolen and vandalised electrical installations in 2019.
The company’s Head of Communications, Mr Emeka Ezeh, said yesterday in Enugu that EEDC would step up its efforts in apprehending buyers of vandalised electrical installations.
According to him, it is believed that the buyers are the ones who motivate vandals to continue indulging in such nefarious act.
“If there is no one buying the items, there won’t be that motivation for the vandals to engage in this act,’’ he said.
EEDC spokesman, who recalled that two buyers were jailed in 2017, expressed the hope that after due process of the law, those apprehended in 2018 would also serve their terms in prison.
“We will not relent in this struggle and we hope that this will serve as deterrent to many others that are engaging in such criminal activities of buying stolen or vandalised EEDC property,’’ Ezeh said.
He said that it was worrisome that while EEDC had been striving to improve on its service delivery, some individuals were engaging in illegitimate activities to frustrate both the company and its customers.
“This singular act costs EEDC a lot financially, and ends up subjecting our customers to a lot of inconveniences,’’ he said.
He, however, solicited the cooperation and support of the various vigilante groups and state security agencies to apprehend and prosecute the vandals accordingly.

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