THE Nigerian National Petroleum Corporation, NNPC, has said that Nigerian households and businesses generate 2,500 megawatts of electricity from petrol, kerosene and Automotive Gas Oil, AGO, popularly known as diesel. At a special session in the recently concluded 2015 Nigeria Oil and Gas, Conference in Abuja, David Ige, group executive director in charge of gas and power, NNPC, said power supply shortage had become a strain on Nigeria’s economic growth and industry competitiveness.
According to him, NNPC’s studies indicate that more than 90 per cent of businesses in Nigeria rely on back-up power generation for about 60 per cent of their power needs. On the theme of the session, “Interrogate Our Roadmap in Gas-to-Power: Assessing If We Are on Course to Maximising Our Potentials,” Ige said gas-to-power or lack of it had become the recurring theme in annual conference.
“Therefore increasing power supply, clearly, will unlock Gross Domestic Product, GDP, growth and create jobs. It is estimated that the direct impact of closing the power gap we have today is well over $11 billion and the indirect impact is significantly more than that with additional benefit of over one million jobs a year. So, this challenge of power outage clearly needs to be overcome,” he said.
Ige stated that an analysis by the NNPC shows that apart from the 3,500 megawatts of power from the grid, additional 2,500 megawatts is generated through back-up generation. “Today, on top of the grid power that is consumed, Nigerians on a daily basis consume about 12 million litres of diesel. Our estimate is that about 50 percent or 60 percent of that goes to power generation and the balance of that into trucking. If you estimate that in terms of megawatts, it translates to close to 1,000 megawatts from diesel generation.”
He also stated that the NNPC had done similar studies on petrol, adding that 20 percent of the 40 million litres of petrol consumed in Nigeria daily is used for power generation. According to him, petrol is used to generate about 800 megawatts of electricity by Nigerians. “Of course, a lot of people use kerosene, usually for lantern and cooking. We have estimated that that comes to about 500 megawatts of electricity. So, if we put all those together, about 2,500 megawatts is being generated from diesel, kerosene and petrol,” he said, adding that gas and power sector in the last two years have been going through significant reforms, adding however, that gas supply has been a bottleneck in the efforts to ensure reliable power supply.
Shell’s Conditions for Investing More in Nigeria
SHELL Petroleum Development Company, SPDC, has given conditions for investing more in Nigeria. It said that although it had divested assets, it is also ready to invest more than it has divested if the operating environment is right. At a special panel session of the recently concluded Nigeria Oil and Gas, NOG, conference in Abuja, Osagie Okunbor, managing director, SPDC, said his company was committed to long-term presence in Nigeria.
Okunbor said even though his company had divested, it is ready to invest more than it divested if the conditions were right. He, however, stated that for his company to invest more, the issues of security, funding and fiscal stability have to be addressed. “I think as a country what we have to be very mindful about is that we don’t completely focus on how we share the cake but focus on how we make the cake bigger. That for me is the key element of the whole fiscal stability side of the discussions. Elisabeth (Managing Director of Total Upstream Companies in Nigeria) made the point about the licenses and expiry of licenses. Many of these investments are in terms of billions, often money put forward by the private partners upfront. If the basic issue of the tenure of the licenses is not resolved, you can speak the whole day, nobody can commit the shareholders’ funds in these licenses,” he said.
Okunbor said the oil and gas industry has to be much more effective at making that point to the government about the need to provide this level of assurance for people to invest in the country.
He further stated that Nigeria’s operating environment is very uncertain, with multiple bodies implementing conflicting regulations. “I am convinced that given the long term presence we all have in this country, at whatever level, whether in the United States, The Hague; in Paris and in China, everyone thinks of a long term presence in Nigeria and there is no better way to assure long term presence in this place as assuring that you have local capacity; if you don’t have local capacity, after a while, you withers.”
Okunbor also noted that Nigerian independent companies could bring a lot on the table as they do things differently from the international oil companies, IOCs.
New Technology to Fight Pipeline Vandalism
THE federal government is to develop a new technology that would enable the country combat the activities of oil thieves in Nigeria. President Goodluck Jonathan disclosed this on Sunday, March 22, at the 2015 presidential debate organised by the Nigeria Elections Debate Group. The President also assured Nigerians that he would eradicate corruption in the nation’s oil and gas sector in the next four years if re-elected.
According to the president, oil theft is a serious challenge that must be dealt with, adding that the government was developing a technology to fight it to a standstill. He said that the private sector must be encouraged to participate to make the oil sector truly profitable to the point of exporting petroleum products.
“We are developing a technology now. Contracts have been awarded and we must stop it. The issue of downstream is a combination of government and private sector. It has to do with refining, production of fertilisers, petrochemicals. The privatised companies of government especially the Eleme Petrochemicals, is working very well. That is a big success story as the Eleme Petrochemicals was abandoned but now it is one of the biggest in the world. They are planning to expand and bring in fertiliser production into it,” he said.
Jonathan said the government planned to liberalise the downstream sector for more private sector participation in the exportation of petroleum products. According to him, the Nigerian National Petroleum Corporation, NNPC and the entire sector will have to be unbundled even without the Petroleum Industry Bill, PIB.
The President promised to eradicate corruption in the oil and gas on Sunday evening in Lagos at a youth event, tagged, “An unimaginable feat in sports.” The event was meant to showcase his administration’s achievements in the sports sector. The event attracted sports men and women, young professionals as well as beneficiaries of the federal government’s scholarship schemes, among others.
He said his administration had succeeded in using technology to tackle corruption in many areas, such as fertilizer distribution, procurement and salary payment, among others, and will do the same in the oil industry. “We are going into the oil sector. People talk about the oil industry because that is an industry with a lot of people and a lot of money is involved. But I promise you that in the next four years, we will sanitise the oil sector.”
— Apr. 6, 2015 @ 01:00 GMT