Oil & Energy

Need For Sustainable Power Supply

Published

13 years ago

September 19, 2011

The problem of poor power supply in Nigeria has been terribly lamentable and the situation seems to have defied all efforts by previous governments since in the 80s. one is tempted to now ask what the present administration under President Goodluck Jonathan can do to salvage the country from the ugly trend.

From on-set, the Federal Governemnt has been matching words with action on how better to improve the power sector by ensuring that the mega watt rose to 150 from less than 50, even within the short period of this present dispensation. This was after the Chief executive officer of Olornrisogo Power Station was redeployed to the headquarters for efficiency.

The redeployment followed the warning by the Minister of Power, Professor Barth Nnaji that all managers of the different sections of the utility company –Power Holding Company of Nigeria (PHCN), from generation, transmission to distribution should either sit up or be prepared to be booted out. Nnaji first had a meeting with the Chief Executive officers of the different sections of the utility’s value chain when he stressed the need for them to show commitment to duty to give Nigerians the long expected power supply.

Although he agreed that the sector had suffered grave or gross neglect in a couple of decades ago, particularly under the military administration, he was optimistic that if the capacity Nigeria currently has fully utilized, there would be considerable improvement in power delivery. The question now is, who is the cause of Nigeria’s predicament in the power sector. Is it the government or the authorities of the utility company?

With the efforts so far made by the government, one would think that the utility firm, PHCN is to be held responsible for the incessant epileptic power supply in the country. The helmsmen of the company just as the former Nigeria Electricity Power Authority (NEPA), feel that their duties and at coming to defend their budgets and collecting electric bills and share same among themselves and sit back and seek frivolous reasons to justify spending such funds without practical evidence on ground.

Unlike in the past when all the funds that come to the different sections of PHCN pass through the headquarters, the CEOs of the different units currently go to government to defend their annual budgets and spend the money according to their discretions thereby and up at not utilizing the money to provide constant electricity for the people. Some utilize the money in providing poor service leaving undone what the money is meant for.

However, the Chief executive officers saw that it was no business as usual when the minister clamped down on four of their colleagues and that the ministry didn’t come to the combat in child’s gloves. Although, ever since that was done, the situation changed in terms of power supply but a lot needs to be done. The minister needs to tour all the power facilities across the country including the South-South and Port Harcourt in particular to see for himself or have a practical feel of what the people of the area are suffering. All is not well with the PHCN formations across the country and for the Niger Delta region that produces the bulk of the nation’s wealth, special attention should be paid to give the a sense of belonging and to compensate them for the long neglect.

The minister should extend his “Capacity Recovery” to Rivers State because from the look of things lack of commitment and human errors account for considerable power failure in the state. There is need to ensure sustainable electricity supply in Rivers State considering its population and economic contribution coupled with the fact that sustainable and successful business is bi-product of constant electricity supply.

An auto manufacturing company could not be built in Nnewi, Anambra State because of poor power supply in the country. According to the Minister of Power, his efforts as a key player in the do were fruitless as the planned power supply.

In a paper he presented during the 20th anniversary of Anambra State Nnaji said “it was the fledging auto industry in Nnewi which inspired me in the late 1990s to take steps to establish in Nigeria a state-of-the-art company to manufacture auto parts including engines, when I was the ALCOA foundation Professor of Manufacturing Engineering at the University of Pitts burgh”.

The only way to attract investment to Nigeria is for the government to ensure steady and uninterrupted electricity at all levels. The country is blessed with all kinds of natural resources which can attract foreign investors but because of the non-availability of uninterrupted electricity, investors are scared.

Most investors after carrying out feasibility study of the kind of investment they intend to bring into the country will end up being deterred because of the huge, cost of acquiring and fueling a generating plant that would be able to power their investment. Reports have shown that everyday industries and other manufacturing concerns are collspsing and unemployment rate rising as investors are not willing to come and do business in the country because of lack of sustainable power supply.

Sadly, an average Nigerian home spends more than the N18,000 minimum wage which is yet to be paid, a month to power its generator to have power. Much of the economic undevelopment in the country today is because of lack of power, at trend all patriotic Nigerians must not allow to continue. This power has risen to a point that the President, Dr. Goodluck Jonathan and all the state governors should make steady power supply their one-point agenda and do everything humanly possible to ensure that this is achieved before the end of 2012.

Obviously, the government at federal and state levels should partner with other stakeholders or establishments in ensuring that the power problem becomes a thing of the past because until that is done, no matter how much we spend on jingles and advertisements in the local and foreign media to woo investors to come and invest here, it will continue to be a mirage.

Ghana and other industrialized countries did not advertise in international media before virtually multinational and local companies were attracted to invest there. The issue of power supply is however, over-flogged because it is the main key to industrialization and self-reliance in any country and any country without steady electricity remains impoverished with its people.

It has become necessary to suggest that Nigerian governments should send delegations to China and other countries and engage energy companies that will give the country steady power supply so that we can become economically viable, as that is the only way to generate to generate employment for our teeming youths.

In pursuance of its regulatory functions, the Nigerian Electricity Regulatory Commission (NERC) in collaboration with the Standards Organization of Nigeria (SON) and the National Environmental Standards and Regulations Enforcement Agency (NESREA) has approved standards and guidelines for the issuance of clearance certificates for importers of generating sets and broken-down parts. This is to ensure that all generating sets to be imported into the country meet all the approved standards and quality and to stop the indiscriminate importation of generating sets into the country.

There has been little or no difference in the state of power supply in the country since the power reform was initiated by former president Olusegun Obasanjo’s government in 2005. This is why the Nigerian Electricity Regulatory Commission (NERC) has embarked on a process of consulting with stakeholders over the need or otherwise to increase electricity tarriff in the country. Chief executive officer of NERC, Dr Sam Amadi, at a workshop on major Review of the Multi-year Tarriff Order (MYTO) urged the shareholders to be objective over the review process, noting that “public power supply in the country is still a standby in most homes and offices, as it was in 2005 when the reform in the power sector began.”

If we must achieve the goal of giving every citizen access to stable, reliable and fairly priced electric power, a reliable and sustainable framework must be put in place to ensure the robust interaction of market forces with social policy to attain equilibrium. This we can do by establishing a pricing regime that will sustain massive private sector investment and guarantee a positive return on investment, while also being fair to underprivileged consumers. The power industry is characterized by lack of a transparent price determination process and abysmally low tariffs, all based on the political whims and considerations of the PHCN, as opposed to the economic principle of full cost recovery.

Shedie Okpara

Oil & Energy

NSCDC’s Anti-Vandal Squad Uncovers Artisanal Refinery In Rivers Community

Published

2 weeks ago

April 15, 2024

The Tide

The Anti-Vandal Squad of the Nigeria Security and Civil Defence Corps (NSCDC), Rivers State Command, has uncovered yet another local refinery situated at Adobi-Akwa settlement in Etche Local Government Area of Rivers State.
The State Commandant, Basil Igwebueze, disclosed this while speaking to journalists shortly after the tour of the Illegal site.
Represented by the Head, Anti-Vandal Squad, CSC Peters Ibiso, Igwebueze said the squad made the discovery following a tipp off, expressing regret that no arrest was made as the boys fled the site upon sighting the squad.
The cammandant’s representative took the newsmen across a tick forest of about 6-7 kilometers from the main town.
The team sighted where the pipeline vandals tapped into the Well Head of yet to be ascertained multinational company, connected their galvanised pipes to several cooking pots, heat up the crude to produce Automotive Gas Oil (AGO).
In his words, “Upon receiving a tip-off, the Anti-Vandal operatives swung into action to uncover this illegal oil bunkering site. They were in this forest for two days having cordoned the area, unfortunately, the perpetrators upon sighting our men took to their heels, but investigation is still ongoing to effect the arrests of such defiant elements”.
The Anti-Vandal Unit Head further narrated the operation techniques of the operators of local illegal refineries from the point of extraction of crude through vandalism of oil pipelines to cooking in various ovens where the content is subjected to high temperature and transmitted through pipes to reservoirs for storage and onward trans- loading to buyers.
While insisting that the command would not relent in the fight against illegal dealings in petroleum products, he urged the public to have more trust in the NSCDC by providing actionable intelligence that would enhance possible arrest of economic saboteurs in the State.
“Our commitment to continuously work in tandem with the prosecutorial mandate of the corps in order to rid the State of economic saboteurs remains unchanged. We value our informants and most especially the intelligence driven tip-off received from time to time.
“It is also our duty to ensure that our source of information are not disclosed so as to protect our informants. It is therefore our delight that the public will continue to have confidence and trust in us as we together protect the nation’s critical national assets and infrastructure from dare devil vandals”, he stated.

By: Lady Godknows Ogbulu

Oil & Energy

Oil Fund Withdrawals Suggest Extended Price Rally

Published

2 weeks ago

April 15, 2024

The Tide

The world’s largest crude oil exchange-traded fund has bled over $2 billion in less than a year. And it i
s not due to investors finding greener pastures elsewhere with other ETFs; it is the siren call of soaring prices that is prompting this mass exodus.
The WisdomTree Brent Crude Oil exchange-traded commodity had assets under management of some $2.5 billion last summer, according to Bloomberg. Now, the publication reports, this is down to $396 million, with withdrawals accelerating over the past few days.
In that, withdrawals seem to be following price trends. Brent earlier this month topped $90 per barrel and, after a short pause earlier this week, is back above that threshold again following the latest Israeli strike on the Gaza Strip amid reports about a possible ceasefire.
While it is true that prices are currently driven higher mainly by geopolitical events, fundamentals are also at play. A growing number of forecasters are updating their predictions for benchmarks this year on expectations of resilient demand and increasingly tighter supply. And investors are following the trend.
Even those who have not sold their ETF holdings in order to invest more directly in the rally are benefitting. That same WisdomTree Brent Crude Oil ETC generated returns of over 13 percent during the first quarter of the year as opposed to an average 8.8% gain in the S&P 500.
The WisdomTree exchange-traded commodity became the world’s largest oil fund at the beginning of last year. The fund saw inflows of over $1 billion, which poured in as the deflation in oil prices that had begun in late 2022 extended into the new year. Now, the trend has reversed and it has reversed strongly.
The WisdomTree Brent Crude Oil ETC is not the only fund seeing outflows. The U.S. Oil Fund, which used to be the world’s biggest oil fund before the WisdomTree inflows last year and is now the world’s biggest oil fund once again, also saw a flurry of investor exits as benchmarks climbed higher.
According to Bloomberg, the fund’s assets under management currently stand at $1.3 billion, down from some $5 billion during the pandemic.
In further evidence that oil makes money, the Middle East is about to become the only region in the world with three trillion-dollar sovereign wealth funds. The Abu Dhabi Investment Authority is worth $993 billion, Bloomberg reported in March, while the Saudi Public Investment Fund and the Kuwait Investment Authority are breathing down its neck.
Meanwhile, investment in transition-related stocks is on the decline, according to data reported by Reuters. The S&P Global Clean Energy Index is down by 10% since the start of the year. In comparison, the S&P 500 Energy Index, which comprises Big Oil names, has gained 16.3%.
The data shows that investors are growing wary of all the promises made by transition advocates as evidence mounts that these were not based on due diligence. Wind and solar stocks suffered a crash last year when this first became clear.
Now, we are witnessing a continued awakening among investors to the challenges and the realistic potential of transition technology and alternative energy sources.
“With conventional energy having its own bull run, I think the alternative funds will struggle for the foreseeable future, and we shall see what the election brings”, the Managing Director of capital markets at Phoenix Capital Group Holdings told Reuters.
The comment summarizes the challenging situation for alternative energy investment and highlights the rebound of interest in oil and gas, much to the chagrin of decision-makers on both sides of the Atlantic.
In both Europe and the U.S., things can get even worse for the transition after the respective elections—in June for European Parliament and in November for U.S. President. It will certainly be an interesting year in energy.
Slav writes for oilprice.

By: Irina Slav

Oil & Energy

CNG Initiative: FG Targets 25,000 Jobs, $2.5bn Investment

Published

2 weeks ago

April 15, 2024

The Tide

The Programme Director and Chief Executive, Presidential Compressed Natural Gas Initiatives, Michael Oluwagbemi, has announced the Federal Government’s plan to target over 25,000 jobs and $2.5 billion worth of investment by 2027.
Oluwagbemi made this known during the Presidential CNG stakeholders’ engagement workshop held at BOVAS Auto-Gas Filling Stations, Ajibode Bus-Stop, in Ibadan, Oyo State capital, at the weekend.
He stated that the initiative, which was part of palliative measures to ease the burden of the removal of fuel subsidy, would attract enormous investment and job creation as well as impact positively on the lives of Nigerians.
Meanwhile, he called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
“On October 1, 2023, when the President gave his speech, he announced that the Presidential CNG initiatives are going to be rolled out as part of palliatives on the removal of fuel subsidy.
“One of our major concerns is to make sure that the transition for the transportation sector is a cheaper, safer, and more reliable source of energy.
“In the coming weeks, we are going to be announcing the conversion incentives programme which will enable Nigerians currently using PMS and Diesel fuel vehicles to be able to convert their vehicles at designated places across the country at a discounted price based on certain pre-qualification under the palliative programme of the Federal Government”, he said.
On the value chain of the initiative, Oluwagbemi explained that the Federal Ministry of Finance is acquiring tricycles and buses that would be assembled and manufactured in Nigeria, with more than five automobile firms being activated.
“The value chain of the programme starts with every one of us. From the point of converting your vehicle, you have created the demand for natural gas.
“If your vehicle is converted by technicians and refuelled by autogas workshops across the country, then you are creating jobs for civil engineers and technicians. You’re creating jobs for the upstream in terms of upstream activities associated with oil and gas.
“And in line with the programme, the Federal Ministry of Finance is acquiring a number of tricycles and buses that will be assembled and manufactured in Nigeria. More than five of our automobile firms have been activated. So, you can see that in terms of job creation, the opportunities for Nigerians are enormous.
“The President has said we need to convert one million vehicles by 2027. We need 1,000 conversion shops and we need over 3,000 filing stations just like this. You can imagine the level of investment required for this.
“In order to sustain one million vehicle conversions by 2027, we need 25,000 technicians. So, the job creation potential is an opportunity for job creation in addition to our gross domestic product, $2.5 billion worth of investment to be mobilised in the next four years and of course more than $25 billion added to our GDP”, he said.
Oluwagbemi further called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
The representative of BOVAS Filling Station, a private investor in the Presidential CNG Initiatives, Temitope Samson, said, “We have worked with the regulators, we are also working with the Presidential Initiatives on CNG to make sure that standard safety is adhered to. We have also worked with the Standard Organisation of Nigeria to ensure that we have a standard accepted internationally.
“Our role is to ensure that there is availability of CNG across the nation, and to also ensure we have enough kits and tanks that are converted for people to use as many as possible, and to ensure safety and to train others so that anywhere they get to, they have very safe conversion”.
Recall that last year, President Bola Tinubu approved the Presidential Compressed Natural Gas initiative(PCNG-i)
This initiative aims to not only introduce more than 11,500 new CNG-enabled vehicles and provide 55,000 CNG conversion kits for existing vehicles that depend on Premium Motor Spirit but also promote local manufacturing, assembly, and job creation.