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Oil Price Fall And Nigeria’s Economy

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At the 7th All Nigeria
Guild of Editors conference held in Benin, the Edo State capital on Thursday, September 22, 2011, the former minister of the Federal Capital Territory, Mallam Nasir el-Rufai, raised alarm that should oil  price drop below $80 per barrel in the international market, some state governments in Nigeria would not be able to pay salaries to their workers.
El-Rufai, who was speaking on the topic, “Perspectives on the Cost of Governance in Nigeria”, had strongly noted that pegging of oil price as high as $75 then in the national budget was unrealistic and not good for Nigeria’s economy.
The minister was being as prophetic as many individuals and organizations who believed that the nation’s economy which is oil dominated would be in a quagmire, should any unforeseen surprises affect the oil price in the global market.
Various experts had also, for too long been consistent in expressing strong need for drastic reduction in the high cost of Nigerian governance which gulps as high as 25% of the annual budget and one of the highest in the world.
They had equally suggested diversification of the economy from oil to other sectors particularly agriculture which hold high promises for food on the table of the average Nigerian, mass employment, raw material for industrialization and foreign exchange earning.
While most nations of the world had strategized to contain such possible economic fears, most African governments also took bold steps in preparations for the economic uncertainties, but some deaf-and-dumb governments had preferred what goes directly into the individual pockets of the leaders than the general good of the citizens. Billions of Dollars meant for constituency funds, furniture extravagant travelling allowances, amongst others find their ways to the law makers and their crowd of primal aides.
Today, the reality is not only knocking at our doors but is quite here with us. The present systematic drop in the oil price which experts predict could slide far below $50 per barrel benchmark before the end of 2015 has become Nigeria’s undoing.
Many state governments in Nigeria today are owing months of salaries arrears to their workers while contractors have abandoned projects execution because the oil price then predicted had fallen below budgetary calculations and states lack the funds to pay.
Some private schools in Port Harcourt have already given notice of increase in school fees, landlords are also threatening to raise rent, labour unions are ironically agitating for pay rise in view of recent devaluation of Naira occasioned by dramatic drop of oil price in global market even as state governments insist they would not review the $65 per barrel benchmark on which they proposed their 2015 budgets. Where would these excoriations take the nation to in the present economic situation determined by global economic reality?
An economist, George Clement, is of the view that time has come for Nigeria to elect leaders who have the capacity to proffer solutions to the socio-economic challenges confronting the nation as against empty promises for which most Nigerian political leaders are known.
“The era of touts aspiring for public offices should be over. It is time to look beyond sweet talks and empty promises now that campaign period in Nigeria is around the corner”, said Clement.
He said, “our leaders had since the oil boom of the 70s refused to do the right thing. Billions of Naira had consistently been swallowed up by the pockets of fraudulent leaders”, he remarked noting that the future generations may have nothing to be proud of about their nation if the real change is not effected.
Another respondent, Mrs Mary Jonathan, in her own reaction is challenging the Economic and Financial Crimes Commission (EFCC) to trace the loots of the nation wherever they might have been hidden.
“Yes, it  appears late but not too late. We cannot continue to wallow in poverty in a rich country while few persons in the name of politics continue to cart away our resources”, she stressed.
Jonathan appealed to the Federal Government to review the pump price downward to reflect the price of oil in the global market. “We cannot afford to pay more when actually the price has fallen. The N97 per litre of fuel is no longer realistic”, she maintained.
A civil servant, Makel Ndah, in his own reaction called for upward review of workers salary. “Since the Naira has been devalued, its exchange power has become weak, it is important that the government reviews workers salary upward to meet with the current market reality”.
A landlord in Port Harcourt Chief Clifford Nweke, said,” it is obvious that house rent would be reviewed since government has started to have a second look at the Naira.”
We are all Nigeirans, operating in the same market, so what affects one should equally affect the other. Yes some people will say landlords are wicked shylocks, but that is mere sentiment”, he maintained.
A private school proprietor who pleaded anonymity said, “we had our first Parent Teachers Meeting last week and the issue of increase of salaries was raised by the teachers and I told the parents to pray and watch because for me to pay higher workers salary means that the fees charged students would also be reviewed upward.
“Please don’t get me wrong, we have not increased school fees yet. What I am saying is that we in my school are studying the socio-economic variables. If workers salary goes up and other schools readjust to meet with the reality, we here would also adjust because we are part of the society”, he explained.
A Port Harcourt- based public analyst, Christian Nnamdi, said the issue calls for caution. “There is no need to panic yet. It is not a Nigerian thing but a global phenomenon. It does not affect only Nigeria but other nations of the world. Nigeria has many antidotes to the problem. So all we need to do is study the situation to know the dynamic nature of the change.
According to Nnamdi, the nation should not leave everything in the hands of politicians. “We need to protect the economy from the excesses of selfish Nigerian politicians and one way of doing that is to gather together some technocrats and experts in various fields especially economists. Let the think- tank develop an economic plan that should guide the policies and programmes.
Call it 25 years economic development plan. So that whichever political group that takes the mantle of leadership, will have to build whatever programme from the economic blue print.
Nnamdi blamed the woe of the nation on inconsistency of leadership, stressing that government should be seen as a continuation from where the former ends. “But you see, in Nigeria, any new administration is in the habit of abandoning the programmes of the previous administration at the detriment of so much fund sunk into such projects because they want to take credit.
“But with a long term economic development plan, new government can no longer abandon projects started by the former government. It has to inherit it and complete it for the people. This idea will make nonsense of the penchant for second term which is common in Nigeria,” he maintained.
It would be recalled that discovery of shale oil which increase supply in American oil market, a major importer of Nigeria’s oil has affected the oil supply in the global market. This high supply has reduced oil price in the global market and Nigeria, whose economy remains oil-driven is directly affected.
Nigeria whose budget depends on oil has been forced to review its oil benchmark resulting in austerity measures to contain the economic downturn.
Medium Term Expenditure framework which the Finance Minister, Dr. Ngozi Okonjo-Iweala, submitted to the National Assembly, scaled down the nation’s budgetary estimate for 2015 to N4.661 trillion as against an initial N4.817 trillion.

 

Chris Oluoh

Some Transformers donated by the lawmaker representing Oyigbo in the RSHA Hon. Okechukwu .A. Nwuogu

Some Transformers donated by the lawmaker representing Oyigbo in the RSHA Hon. Okechukwu .A. Nwuogu

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OML18: NNPC, Sahara Launch 2.2m-Barrel Floating Vessel

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The Nigerian National Petroleum Company Limited (NNPCL), Sahara Group, Eroton Exploration & Production Company, and Bilton Energy Limited have jointly commissioned the nation’s first wholly owned 2.2-million-barrel capacity Floating Storage and Offloading (FSO) vessel.
The vessel, named Cawthorne, is designed to drive sustained oil production, enhance crude export reliability, and bolster Nigeria’s energy security and sustainability.
A statement signed by the Head of Corporate Communications at Sahara Group Ltd, Bethel Obioma, stated that the vessel is Nigeria’s first Crude Oil Terminal to be commissioned in 50 years.
Christened Cawthorne, the Floating Storage and Offloading (FSO) Terminal is designed to enhance crude evacuation from Nigeria’s OML 18 and nearby assets, the statement added.
This achievement, according to Udobong Ntia, EVP Upstream, NNPC, who represented the NNPC GCEO, Bashir Ojulari, at the commissioning, “is another bold achievement from the partnership between NNPC and its JV Partners that would guarantee seamless operations and bolster the strategic targets set by the President, Asiwaju Bola Ahmed Tinubu, towards ensuring optimised upstream production in Nigeria.”
Located at offshore Bonny, the double-hull FSO vessel with a storage capacity of 2.2 million barrels, represents a bold step forward in strengthening Nigeria’s crude export infrastructure and operational resilience.
NNPC Chief Upstream Investment Officer, Seyi Omotola, said the vessel represents a “renewed hope” for Nigeria’s upstream sector, adding that it also reaffirms the growing capacity of the nation to make its energy sector globally competitive.
The Chief Executive of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe,who was represented by the Executive Commissioner, Development and Production, at the commission, Enorense Amadasu, said: “This is a commendable achievement that aligns with the vision of the NUPRC towards accelerating production in the nation, reliably, seamlessly and sustainably.”
Amadasu added that the Cawthorne FSO will enhance Nigeria’s export reliability and contribute to a more stable global energy supply chain. “This is a critical step toward unlocking the full potential of OML 18 and other strategic assets in the region.”
Managing Director, Niger Delta Exploration and Production Offshore Limited (NEOL), Ibiyemi Asaolu, said “This milestone showcases what is possible when innovation, collaboration, and execution excellence align. With FSO Cawthorne, we are not only securing production continuity from OML 18 but also contributing to Nigeria’s long-term energy infrastructure and revenue stability.”
On his part, the Head, Commercial and Planning, Asharami Energy (a Sahara Group Upstream Company), Dr. Tosin Etomi, said “The Cawthorne FSO stands as a symbol of innovation meeting necessity. It is not just a vessel, it’s an assurance of continuity, reliability, and value creation for our partners, our nation, and our people”.
“This collaboration with the NNPC, NUPRC and other stakeholders embodies the drive to turn complex energy challenges into sustainable solutions that power progress across Africa.”
Etomi said the ultramodern vessel is fitted with digital capabilities that make it a vessel “built for the future, driving operational flexibility, reduction in carbon exposure from barge movements, and enhancing overall evacuation safety. It’s an investment in the resilience of the upstream sector and our environment.”
“The commissioning of FSO Cawthorne reaffirms Sahara Group’s and indeed OML 18 Partners’ commitment to powering progress responsibly through partnerships, innovation, and infrastructure that strengthen Africa’s energy independence”, he stated.
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Space-Based Solar Power Finally Ready to Shine?

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Scientists have dreamed of putting solar panels in outer space since the late 1960s, and have known that space-based solar power was technologically feasible since the 1970s. But the true race for space-based solar has only just begun, driven by the intensifying need to produce more electricity to meet rapidly growing energy demand. As more of the world becomes electrified, big data and AI become omnipresent, and decarbonization deadlines draw closer, innovative energy solutions are needed more than ever. As a result, space-based solar power is finally ready for its day in the sun.
This nascent technology employs enormous satellites to collect high-intensity sunlight and beam it down to Earth, either through microwaves or lasers. A receptor on Earth receives that energy and converts it into electricity to be fed into the grid. This energy would be dispatchable, as satellites would have gargantuan range and could flexibly beam energy to where the demand is greatest.
The production potential of space-based solar power is enormous. Because the panels are situated beyond clouds and the atmosphere, and are not impacted by the rotation of the earth, they receive high levels of unadulterated sunlight 24 hours a day, 7 days a week. As a result, these systems are capable of producing a potentially game-changing amount of clean energy.
According to calculations by researchers from King’s College London, space-based solar power could reduce Europe’s need for land-based renewable energy by as much as 80 percent, and reduce battery-based energy storage needs by more than two-thirds. The kicker? It would reduce the cost of Europe’s energy system by as much as 15 percent. The researchers found that the associated savings in terms “energy generation, storage and network infrastructure costs” would save an estimated 35.9 billion euros (41.7 U.S. Dollars) per year.
The higher energy density of space-based solar means that energy systems would need far fewer costly resources. Such a system “requires orders of magnitude fewer critical minerals to provide the same continuous power as a terrestrial solution with large-scale energy storage,” reads a recent article from the World Economic Forum. “This offers a more sustainable path, alleviating the strain on resources that the International Energy Agency (IEA) has identified as a key challenge,” the report continues.
Critically, these systems would also require far, far less land than Earthbound solar farms. Not only would we be outsourcing solar panels to outer space, the receptors that receive the solar energy here on Earth would be relatively small and mostly transparent, meaning that they would be well-suited to mixed-use spaces. This would alleviate intensifying issues of land scarcity faced by utility-scale renewable energies.
As the considerable benefits of space-based solar gain more attention, investment in their development has ramped up considerably. Labs in the United States, the United Kingdom, China, Japan, Europe, and other locations around the globe are all accelerating their research programs to advance space-based solar power, and high-profile private investors are now joining the trend as well. Big tech bigwig Baiju Bhatt, a co-founder of Robin Hood, launched the space solar startup called Aetherflux last year.
But space-based solar power still faces some key hurdles before it can be scaled for commercial use. The most significant of these, according to the World Economic Forum, is the way that private finance is structured around early-stage startups and not long-term infrastructure projects. While space-based solar power will be a big money saver in the long term, it will not provide quick or necessarily predictable returns on investment.
For this reason, startups are looking to government contracts to get space-based solar power off the ground. “We think that the military customer is large enough — and for lack of better word, difficult enough — of a customer that if we can serve, we can build a constellation and we can be at scale, Christian Garcia, managing partner at Breakthrough Energy Ventures, one of Aetherflux’s backers, told CNBC. “And at that point, we will have dropped the cost of the technology such that we can expand into other customers.”
By: Haley Zaremba
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Aide, Others Laud Gov. Diri Over ‘Light Up Bayelsa’ Project 

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Bayelsa State governor, Senator Douye Diri has again been commended for his visionary leadership and unrelenting initiatives and effort in providing stable power supply in the state.
The Technical Adviser on Media and Public Affairs, to the governor, Hon.Wisdom Ikuli, made the commendation while conducting  Newsmen on a tour of the ongoing installation of the new Gas firedTurbine project procured by the Governor Diri-led administration.
Describing the ongoing project tagged: ‘Light Up Bayelsa’ as a lofty socioeconomic initiative, Ikuli noted that the project, upon its completion, would be a boost to the economic potentials of the state as well as upscale the living conditions of citizens and residents of the state.
“God’s willing by December 2025 as promised by the governor, Bayelsa would begin to enjoy 24-hour uninterrupted power supply. It will herald the industrialisation agenda of His Excellency, Governor Douye Diri.
“You all know that in January this year, this place was a bush and swampy. But between January and now, you can see the tremendous progress made. The power project Governor Diri promised before the end of this year is gradually becoming a reality.
“This project would trigger a multiplier effect on the economy of our State. It will attract investors, and revive dormant businesses across the state. Every businessman wants to locate where there is power. People will relocate from neighbouring states to Bayelsa. The hospitality sector will boom, and we must continue to thank the miracle governor for keeping to his word,” he said.
The governor’s Aide restated that while power would not be free, the cost would be affordable compared to what residents currently spend on diesel, fuel, and solar energy, noting that the gas that would be used for power generation would be bought by the Bayelsa electricity Company Ltd (BECL).
“What we will pay for power is insignificant compared to how much we spend daily on fuel or solar panels. Light is life, and Governor Douye Diri has come to give us light, and a new life. Governor Diri is the ‘Light’ of Bayelsa State and the entire Ijaw nation”, the governor’s aide said.
Also speaking, the Director of Operations, BECL, Engr. Steve Bubagha, said the project, which is about 85 percent completion would soon be set for inauguration, disclosing that six of the eight newly procured gas turbines had already arrived the state, with the remaining two en route Yenagoa, the state capital, in the coming days.
“Virtually every nook and cranny of Yenagoa will benefit from this project. We’re at an advanced stage, about 85% done with the electrical reticulation and 33kV network. Once the installation and pre-commissioning processes are completed, power distribution will begin immediately. Government plans to introduce metering systems to ensure transparency and efficiency in billing.
“If the governor has gone this far to make sure this project is installed in Yenagoa, it means he will also ensure that meters are available. It is even with meters that people can truly enjoy the facility,” he said.
By: Ariwera Ibibo-Howells, Yenagoa
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