A Pat on the Back

Andrew Yakubu
Andrew Yakubu

THE Independent Petroleum Marketers’ Association of Nigeria, IPMAN, (Western Zone) has commended the management of the Nigerian National Petroleum Corporation, NNPC, and its downstream and marketing subsidiary, the Pipelines and Products Marketing Company, PPMC, for the comprehensive rehabilitation of pipelines and depots under the System 2B Pipeline which services the Southwest geo-political zone of the country and the Ilorin axis.

Tumini Green, acting group general manager, Group Public Affairs Division of NNPC,  said in a statement that IPMAN’s appreciation was conveyed to the corporation in a letter jointly signed by A. O. Idowu, Western Zonal chairman, and Olumide Ogunmade, Western Zonal Secretary,  and the chairmen of Mosimi, Ibadan, Ore, Satellite and Ilorin Depots.

The statement quoted IPMAN as saying: “We have noticed the gradual restoration and reactivation of almost all the depots under System 2B and the renewal of the facilities at Mosimi Depot, which is central to the activities of depots under System 2B. We have also been informed of the extensive rehabilitation and expansion of the Atlas Cove Jetty and wish to congratulate you on all these efforts.

“We have also noticed the determination of PPMC/NNPC to tackle the ugly problem of pipeline vandalism along System 2B. The effort of the Corporation to tackle vandals at the black spots in Arepo and other areas is beginning to yield positive results,” IPMAN said.

The independent marketers also pledged their loyalty and support to the corporation in ensuring a hitch-free supply of petroleum products in the Western Zone in particular and across the country in general.

Omotosho Power Plant Deal

In its bid to improve the power sector, the federal government has concluded plans to sell Omotosho Power Plant to China Machinery Engineering Corporation, CMEC-Pacific, at a price of $217.53m. Chigbo Anichebe, head of public communications, Bureau of Public Enterprises, who confirmed the offer, said the company has accepted to pay a net value of $82.34m.

Anichebe said the BPE had transmitted an offer letter to CMEC-Pacific in respect of a power purchase agreement for the sale of Omotosho power plant, adding that the transaction was through a debt-equity swap process. “The National Council on Privatisation, NCP, at its last meeting held on February 28, 2013, approved the sale of Omotosho Power Plant to CMEC-Pacific and that the company should pay $217,531,507.79 for the power plant. However, the net total amount accruable to the federal government for the plant would be $82,336,179.42 given that $30,325,386 would be deducted from the capital cost for the construction of a switch yard for the Transmission Company of Nigeria,” he said, adding that the NCP also approved the transfer of assets to, Omotosho Power PLC the project company, which was incorporated on November 10, 2006 as a vehicle to own the assets of the plant.

According to Anchiebe, the BPE action was based on the approval received by the ministry of power from President Goodluck Jonathan on July 18, 2010 to proceed with the proposed divestiture of federal government’s investment in the plant. The BPE sought and received NCP’s approval for the divestiture of Omotosho Power Plc through debt-equity swap during its meeting of May 12, 2011.

The Omotosho Power Plant, which has a capacity to generate 335 Megawatts of electricity, was completed in 2002 and the total cost of the turnkey contract was $166,724,578. The federal government funded 35 per cent of the cost, while the balance was funded through vendor financing provided by the China National Machinery and Equipment Import and Export Corporation at an interest rate of six per cent per annum.

It was initially conceived that the plant would, after completion, operate commercially and the proceeds from the sale of the electricity it would generate, would be used for the repayment of the vendor financing and the interest. However, the delay in the completion period coupled with limitation in gas supply and paucity of funds at the Power Holding Company of Nigeria which resulted in a default in the repayment of the debt, leading to the accumulation of unpaid invoices to CMEC.

Accugas $225 Million Gas Investment

Phillip Ihenacho
Phillip Ihenacho

Seven Energy International Limited, an independent Nigerian oil and gas exploration, development and production company, has increased its gas investment in the country to $825m. The company increased its investment following the signing of a $225 million syndicated medium-term facility between Accugas Limited, a gas processing, marketing and distribution company owned by Seven Energy International Limited, and some banks in the country.

Phillip Ihenacho, chief executive officer of the company, said the $225m loan would be utilised towards refinancing the existing $55m debt secured by Accugas gas pipeline project  in  Akwa Ibom, while the $170m  balance would be used in part-financing the cost of expanding the company’s gas-processing facilities.

According to Ihenacho, a new gas pipeline that would supply gas to the Calabar National Integrated Power Project,NIPP power plant, would also be built from the $170m balance. He described the Calabar project as the second phase in Accugas’ gas processing and distribution development programme aimed at bringing the substantial gas reserves from the South East Niger Delta to market to meet the growing energy demand from power plants and industrial users in the region.

The project, according to him, involves the construction of a 37km gas pipeline from the Uquo gas field in Akwa Ibom State to Oron for delivery of 131 MMscfpd of gas to the 560MW power plant in Calabar. Construction of the new pipeline, he said, was scheduled to be completed in July 2014.

Reward for Techno Customers

Techno Oil Limited has slashed the price of its Liquefied Petroleum Gas cylinders as an Easter promo to the company’s customers. Eugene Osimiri, Liquefied Petroleum Gas manager of the company, said the promo was designed to reward the company’s loyal customers, adding that it commenced on March 26 and would end on April 6.

The promo, he said, was anchored on the company’s flagship 12.5kg Techno Gas cylinders, adding that the product would be sold at a ‘non resistible discounted price’ during the promo. He urged Techno Oil’s customers nationwide to take advantage of the promo to buy the TechnoGas 12.5kg cylinders and buy for their friends. In its drive to sustain its Going Green Revolution, Techno Oil had embarked on an advocacy campaign for the use of LPG at homes, in place at kerosene and firewood.

Osimiri said shifting to cooking gas would help to save scarce foreign exchange, hitherto expended on kerosene importation. He maintained that collaboration with local energy companies to promote the use of cooking gas would also give a boost to the local content initiative of the federal government.

Back to Brazil

Petrobras, the Brazilian Oil Company in Nigeria may auction its stakes in the country’s oil fields to raise cash for domestic projects in Brazil. The company is selling its eight percent stake in the offshore Agbami blocks, operated by Chevron and its 20 percent share of the offshore Akpo project, operated by Total. The deal might earn the oil company up to $5 billion.

Sources close to the company said that it has already hired Standard Chartered to run the process, which would kick off in the next two months. The source saw the decision to sell the Nigeria assets as a retreat from foreign markets once considered strategic in favour of realising the government’s goal for Brazil to become self-sufficient in energy.

Crude oil production from the Agbami fields began in 2008. Output from the project is 250,000 barrels per day, and it holds estimated reserves of 900 million barrels. Akpo began production in 2009 and has an output of 175,000 bpd of light condensate oil and 9 million cubic metres of gas. It has proved and probable reserves of 620 million barrels of condensate and more than 28 billion cubic metres of gas, according to Total.

Petrobras began operations in Nigeria in 1998 in the deep waters, off the coast of the Niger Delta. Petrobras is divesting assets and redirecting investment towards higher-return activities such as exploration and production to finance a five-year $237bn capital spending plan, the world’s largest corporate investment programme. The company hopes to double current oil and gas production by the start of the next decade to about 5.2 million barrels of oil equivalent a day and also help Brazil become self-sufficient in refined products as well.

Compiled by Anayo Ezugwu

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