Oil & Energy
11 DISCOs Still Owe NBET, MO N112bn – NERC
Nigerian Electricity Regulatory Commission, NERC has disclosed that the nation’s 11 Electricity Distribution Companies, DISCOs’debts to Nigerian Bulk Electricity Trader, NBET, and Market Operator, MO, are still below 30 percent as they paid only N51.2 billion of the N163.1 billion issued to them in the first quarter of 2018, Q1’18.
NERC, which confirmed this in its Q1’18 report, obtained yesterday, also stated that only two of the 11 DISCOs in the country have metered up to 50 per cent of electricity customers under their coverage areas.
It disclosed that despite several intervention funds made available to the DISCOs as well as over estimated billing of consumers, the DISCOs have not yet been able to settle huge debt and metered their customers because of problem of cash.
The report stated: “This serious liquidity challenge is partly attributed to non-cost-reflective tariffs, and high technical and commercial losses aggravated by consumers’ apathy to payment arising from estimated billing and poor quality of supply in most load centres. “Of the N171.1 billion billed to customers in the first quarter of 2018, only N106.6 billion was recovered, representing 62.3 percent collection efficiency.
‘’Therefore, of every N10 worth of electricity sold during the quarter under review, N3.8 is uncollected. “The liquidity challenge in Nigerian Electricity Supply Industry, NESI, was further reflected in the DISCOs’ remittances relative to NBET’s and MO’s invoices. “In the first quarter of 2018, whereas DISCOs were issued a total invoice of N163.1 billion for energy received from NBET and for the service charge by MOs, only N51.2billion (31.4 percent) was settled by DISCOs, creating a huge shortfall of N112.0 billion.
“Similar to 2017Q4, none of the DISCOs settled up to half of its market invoices in Q1’18. Only Eko and Ikeja DISCOs settled up to 45 percent of their market invoices, all other DISCOs settled below 40 percent of their invoices.” Although the overall market remittance improved from 24% in 2 Q4’17 to 31 percent in the first quarter of 2018, the remittance performance is still significantly low.
“The overall remittance to NBET for the first quarter of 2018 was just 27% of the total energy invoice, an increase of 6% from the remittance performance in Q4’17. Similar to the Q4’17, Market Operator received 40 percent remittance of the invoice issued for service charge during the Q1’18.
“In the period under review, the total invoice issued to international customers, Beninois Electricity Community and Nigerien Electricity Society (CEB/SAKETE and NIGELEC) and special customer (Ajaokuta) stood at ¦ 12.2billion. However no payment was received from these customers.
“The Commission notes that the Nigerian government has continued to engage governments of the neighbouring countries to ensure payments for the electricity purchased. Although the low remittance by DISCOs to NBET and MOs is partly due to low collection and existing tariff shortfall, the Commission has observed that on their part, the DISCOs seem to have capped their monthly remittance thereby keeping more than their fair share from the market funds.”
Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended
Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has called on Nigerian companies to position themselves strategically to take full advantage of the growing opportunities in upcoming offshore and shallow water oil and gas projects.
The Managing Director, SNEPCO, Ronald Adams, made the call at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF) Conference, held in Yenagoa, Bayelsa State, last Thursday.
Adams highlighted the major projects, including Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension, as key areas where Nigerian businesses can grow their capacity and increase their involvement.
“Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) says Nigerian companies have a lot to benefit if they are prepared to take advantage of more opportunities in its offshore and shallow water oil and gas projects.
“Projects such as Bonga Southwest Aparo, Bonga North and Bonga Main Life Extension could grow Nigerian businesses and improve their expertise if they applied themselves seriously to executing higher value contracts”, Adams stated.
Adams noted that SNEPCo pioneered Nigeria’s deepwater oil exploration with the Bonga development and has since played a key role in growing local industry capacity.
He emphasized that Nigerian businesses could expand in key areas like logistics, drilling, and the construction of vital equipment such as subsea systems, mooring units, and gas processing facilities.
The SNEPCO boss explained that since production began at the Bonga field in 2005, SNEPCo has worked closely with Nigerian contractors to build systems and develop a skilled workforce capable of delivering projects safely, on time, and within budget both in Nigeria and across West Africa.
According to him, this long-term support has enabled local firms to take on key roles in managing the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which reached a major milestone by producing its one-billion barrel of oil on February 3, 2023.
The Emohua Local Government Area Administrator, Franklin Ajinwo, has pledged to improve electricity distribution in Oduoha Ogbakiri and its environs.
Ajinwo made the pledge recently while playing host in a courtesy visit to the Oduoha Ogbakiri Wezina Council of Chiefs, in his office in Rumuakunde.
He stated that arrangements are underway to enhance available power, reduce frequent outages, and promote steady electricity supply.
The move, he said, was aimed at boosting small and medium-scale businesses in the area.
“The essence of power is not just to have light at night. It’s for those who can use it to enhance their businesses”, he said.
The Administrator, who commended the peaceful nature of Ogbakiri people, urged the Chiefs to continue in promoting peace and stability, saying “meaningful development can only thrive in a peaceful environment”.
He also charged the Chiefs to protect existing infrastructure while promising to address the challenges faced by the community.
Earlier, the Oduoha Ogbakiri Wezina Council of Chiefs, led by HRH Eze Goodluck Mekwa Eleni Ekenta XV, expressed gratitude to the Administrator over his appointment and pledged their support to his administration.
The chiefs highlighted challenges facing the community to include incessant power outage, need for new transformers, and the completion of Community Secondary School, Oduoha.
The visit underscored the community’s expectations from the LGA administration.
With Ajinwo’s assurance of enhancing electricity distribution and promoting development, the people of Oduoha Ogbakiri said they look forward to a brighter future.
By: King Onunwor