Oil & Energy
Refineries May Become Scraps If … – Kachikwu
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the four public refineries in Nigeria stand the risk of becoming scraps when the Dangote Group of Companies finally commences crude oil processing in the country.
The minister disclosed this last Thursday at a stakeholders’ consultative forum on the Draft National Gas Policy and National Oil Policy held in Abuja.
According to the minister, there is the urgent need to fix and ensure these refineries in Port Harcourt, Warri and Kaduna work within the shortest possible time.
“And not only should they work, they have to work very quickly. The reality is that if we do not privatize and we do not concede them, which is not what we are doing now, then we have a responsibility to find private capital to get them to where they should be.
“This is because if we do not get them to work, in 2019, I can assure you that if the Dangote system works well, we will have scrap, we won’t have refineries, because then, it will be too late to do anything”, he said.
He stressed the need for stakeholders to work in unity towards reducing the cost of production in the industry to manageable level, lamenting that crude oil was still being produced at $27 per barrel in Nigeria.
He said the production cost was too high as no decent country will produce at that amount at a period when the oil price is unpredictable and stressed the urgent need to bring the production cost below $18 per barrel.
Commenting on the total deregulation of the downstream oil sector, Kachikwu said at every given time in the history of every country, there were partial deregulation remarking that, “you have to catch up each time and make an amendment and even if it is just one day, you may have some level of subsidy for that one or two days before it is removed.
“Where we are headed is to try and free the industry so that it can do its own rules and set its own prices”, he said.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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