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FG Signs MoU With Chinese Firms …Terminates Manitoba’s Hydro Power Contract

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In a bid to boost the nation’s power situation, the federal government has signed a Memorandum of Understanding (MoU) with two Chinese firms to build two hydro-power stations in the country.

The Chinese firms, Sinohydro Corporation and China National Electrical Equipment Corporation which are to invest a total of N146.466 billion would through its Export-Import Bank provide 75 per cent of required funds to build a 700 mega watt hydro power station on the Northern Zungeru River while Nigeria will provide the 25 per cent balance of the fund put at N48.88 billion. During the signing ceremony in Abuja recently, the Minister of State for Power, Mrs Zainab Kuchi said the companies would be a 3,050 MW station in Mambila Taraba and a 700MW station in Zungeru, Niger and added that Sinohydro would build the plant at its expense and operate it for nine years before handing over its ownership to Nigeria.

She explained that the Mambilla project was planned since 1985 to produce 260 MW but was reviewed for the plant to produce 260MW, but was reviewed for the plant to produce 3,050MW and to be implemented within five years.

President Goodluck Jonathan was reported as saying that the nation was fully committed to achieving the set target of sustainable power by the year 2020 in less than a decade saying that all the tiers of government were being mobilized to play their roles to ensure that Nigeria attains its targets.

On alternative sources of power he said his administration was highly committed to strengthening the power sector so that it can efficiently deliver adequate, qualitative, reliable and affordable power in a deregulated market and the launch of the roadmap for the reform of the power sector two years ago brings into practical effect the 2005 Electric Power Sector Reform Act, and the hydro power generation sourceswere eing exploited.

President Jonathan explained that “Hydro power generation sources are being exploited. Only yesterday we had our initial meeting with the consultants and contractors for the construction of the large Mambilla Hydro-Power Plant that will produce 3050MW.

“The processes for the construction of Zungeru 700MW hydro power plant have reached an advanced stage. Several Small and Medium Hydropower projects are also in progress as well as Solar Power Projects. A MoU has already been signed with Seimens of Germany for the production of 450MW (with States as first place).

Bauchi State has taken off already. Thirty Mega Watts coal to power is being pursued under Public Private Partnership (PPP) arrangement as well as a pilot wind power scheme in Katsina with 10MW. Waste-to-power schemes are also being implemented in various States.”

In another development a $24 million electricity contract with Canada’s State-Owned Manitoba Hydro has been abolished by the Federal government.

The spokesman of Presidency, Reuben Abati who made the disclosure said the power ministry would make a statement on the move later.

According to him, “Mr. President has cancelled the Manitoba power contract with immediate effect.”

Industry experts saw the hiring of Manitoba to manage the national power transmission network as a major step to move the reform process.

Manitoba was to start work at the beginning of September but government still controls transmission.

The head of the Manitoba-run Transmission Company of Nigeria, Don Priestman expressing his disappointment said: “We had a clear contract and we were meant to be given delegation of authority … but that didn’t happen.”

He added that there were forces working against the power reform in the country as a similar contract which Manitoba has in Kenya was working well.

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Oil & Energy

BUA Group, A’Ibom Sign MoU For Refinery’s Access Road

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Bua Group has signed a memorandum of understanding, (MoU), with Akwa Ibom State Government, and the host communities in Ibeno Local Government Area, for the construction of access road to the proposed Bua Refinery and Petrochemical plant site in Ibeno, last week.
Akwa Ibom State Commissioner for Power and Petroleum Development, Dr. John Etim, who presided over the signing of the MoU, applauded BUA for their commitment to the project, prompt documentation and the preparation of the site towards the construction of the refinery.
Etim said that the refinery project will bridge the gap between host communities and Akwa Ibom State, thereby bringing about more developments in the oil and gas sector of the State.
The Commissioner called on all parties concerned to be committed to the terms of agreement and to ensure that peace dominates their relationship, while appealing to the host communities to protect the facilities which is now in their custody
“The refinery and petrochemical project is in line with the Governor’s vision to industrialise the State, develop local capacity in key industries where value can be added and raw materials sourced locally.”
Speaking shortly after the MoU signing, the Chairman of Ibeno local government, Williams Mkpa, expressed delight over the development, describing it as a giant stride in the industrialisation vision of the Akwa Ibom State Government.
The paramount ruler of the area, Owong Effiong Archianga, assured the company of his people’s unalloyed support and cooperation to see to the actualisation of the project.

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CSO Urges Oil Communities To Challenge PIA In Court

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A Civil Society Organisation, Policy Alert, has faulted President Muhammadu Buhari’s signing of the Petroleum Industry Act 2021, urging communities to test the provisions of the Act before the courts.
President Buhari had signed the erstwhile Petroleum Industry Bill, PIB, into law last Monday amidst protests from community groups and many other stakeholders that the Bill do not adequately cover the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholders Engagement Officer, Mrs. Nneka Luke-Ndumere, Policy Alert, which is working for economic and ecological justice, described the presidential assent to the PIB as “grossly insensitive and problematic.
“It is sad that the bill has been assented to in the most controversial manner despite its many obvious flaws and its rejection by many stakeholders,” the statement read.
It added: “For example, the controversial provision for a direct payment of 30 percent profit oil and profit gas to the Frontier Exploration Fund potentially shortchanges the oil producing states and local governments of some of its thirteen percent derivation as it bypasses the requirement in section 162 (2) of the 1999 Constitution (as amended) which provides that all revenues be channeled through the federation account.
“This is most unfair, viewed against the ceding of only three percent of previous years’ operating expenses to the Host Communities Development Trust Fund and the punitive provision to charge costs of any damage to facilities against the community’s Fund, among other obnoxious provisions.
“That Mr. President has gone ahead to give assent to these vexing provisions only reinforces the politics of exclusion and expropriation that has for long characterised the relationship between the Nigerian state and the oil producing communities.
“We are also concerned that the host communities’ component of the legislation flies in the face of one of its stated objectives to address tensions between host communities and companies as it has all the ingredients for escalating rather than abating such conflicts.
“At a time when fossil fuel investments are being deprioritised elsewhere as a result of the global energy transition, it is unfortunate that this Act failed to provide a bridge between the current era of fossil fuel dependency and the low-carbon energy future that Nigeria aspires to within the framework of government’s much vaunted commitments under the Paris Agreement.”
The statement also said: “Granted, the new legal framework introduces some predictability and clarity to the governance and fiscal arrangements in the oil and gas industry. We are also not oblivious to certain clauses that respond to some of our earlier demands, such as those providing that the Board of Trustees of the Host Communities Development Trust will now be determined in consultation with the host communities, with  membership drawn from community members. But that is just as far as it goes.
“As a tool for improved benefit sharing to host communities, the Act falls flat on its face. It actually ridicules the exertions of the host communities and advocacy groups that have clamoured over the years for a law that yields some space for participation, direct socio-economic benefits and environmental remediation for oil-rich communities.
“The theatre of action will now have to move to the communities and the courts of law. As implementation of the Act gets underway over the next 12 months, we urge host communities and civil society groups to begin to seek interpretation of some of its more controversial provisions before the courts.”

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Kyari Tasks Greenfield Refinery On Fuel Importation

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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has charged members of the Board of the NNPC Greenfield Refinery Limited (NGRL), to explore all available options to bring an end to the current challenge of petroleum products importation.
Mallam Kyari gave the charge Thursday while inaugurating the Board of the newly incorporated subsidiary of the Corporation, NNPC Greenfield Refinery Limited (NGRL), at the NNPC Towers, Abuja.
The NNPC Greenfield Refinery Limited is a subsidiary of the Corporation set up in December 2020 with a mandate to oversee the establishment and operation of new refineries.
The GMD, who is also the Chairman of the NGRL Board, challenged members of the Board to focus on profitability in order to remain afloat and avoid liquidation.
“As a business, this is a big opportunity for us and this company’s balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So, there is really no excuse”, Mallam Kyari stated.
He urged the Board and Management Team of the new company to set up a proper structure with the required skills, technology and financing to drive the company’s operations, adding that he was optimistic that the company would be able to achieve its mandate.
“Our company must grow and we can’t do well except we are able to process our production whether it is the liquid or gas. If we don’t monetise it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.
The NNPC helmsman stated that all the Corporation’s initiatives in the areas of new refineries, condensate refineries and equity acquisition in credible private refineries were geared towards ensuring energy security for the country.
In his remarks, the Alternate Chairman of the Board and Group Executive Director, Refinery and Petrochemicals, Engr. Mustapha Yakubu, declared that the operations of the company would be guided by the principles of cost effectiveness in line with the new Petroleum Industry Act (PIA), noting that profitability would be the key focus.
Speaking in similar vein, the Group General Manager, Greenfield Refineries and Project Division (GRPD) and Managing Director of the NGRL, Engr. Bege Talson, disclosed that the Division was working with third party investors to establish greenfield, modular and condensate refineries with a combined capacity of 250,000barrels per stream day (bpsd).

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