The Managing Director of Bulk Oil Storage and Transportation Company (BOST), Edwin Provençal, has responded to what he described as ‘untruths’ being peddled by former President and Presidential Candidate of the opposition NDC Mr. John Dramani Mahama about the state of BOST and TOR before his administration exited power.
He expressed shock as to how the former Ghanaian leader, whom he says he respects so much, could spew untruths to Ghanaians.
The presidential candidate of the National Democratic Congress (NDC), John Dramani Mahama, has given the assurance that his next governement would revive the Tema Oil Refinery.
The NDC’s presidential candidate for the upcoming December 7 General Elections was interacting with members of the Tanker Drivers’ Association and liaison officers of the oil marketing companies in Tema on Thursday.
He said, “When the NDC assumed office, BOST was highly indebted but through proper management, the government was able to transform it to become one of the best performing state enterprises.”
Mr Mahama accused the Akufo-Addo-led administration of mismanaging BOST and TOR, assuring that should NDC return to power, it would work to revive the ailing state agencies.
However, responding to the claims by the former Ghanaian leader, Managing Director of BOST, Edwin Provencal gave a detailed account of the sordid state of BOST when the current administration took over the company.
He further gave details of what the current administration has been able to do within the three years and ten months.
Below is the full response of MD of BOST to Mr John Mahama’s claimADDRESSING FORMER PRESIDENT MAMAMA’S UNTRUTHS
As the current CHIEF SERVANT of BOST, I cannot stand aloof when the former 1st gentleman & commander-in-chief of the land, who I respect so much, decides to spew UNTRUTHS to the general public.
These are the unalienable facts:
BOST AS AT JANUARY 2017
1) As at January 2017, BOST had a backlog of unaudited accounts covering the period from 2014 to 2016. How can u declare profits during this period?
2) The Press encounter in 2015 which declared that BOST made profit on its operations by the then Managing Director was FALSE but a calculated attempt to throw dust into the eyes of stakeholders as revealed per the audited accounts which showed a loss of GHS36.342 million.
3) The 2016 audited accounts reflected a total loss of GHS459million from BOST operations. This was the HIGHEST LOSS EVER in the history of BOST.
4) In January 2017 BOST owed $624 million to suppliers, BDCs and related parties in respect of crude oil imports for processing at TOR and refined products which got lost from BOST tanks (documents available).
Can you imagine how many hospitals, schools & roads this $624million could have built?
5) Products not accounted for by BOST from BDCs between 2010 and 2014 amounting to $35.913 million hanged on the neck of the company from eight (8) BDCs.
6) As at January 2017, 15 out of 51 tanks owned by BOST across the country were non-operational, thus, decommissioned.
7) As at January 2017, The Tema-Akosombo-Product-Pipeline (TAPP) had been non-operational since 2013.
8) As at January 2017, the 77Km 12” pipes that BOST had previously acquired in 2008 for construction of a pipeline between Accra Plains and Akosombo Depots were still stuck in Houston and incurring huge additional costs AFTER 9 years.
9) In January 2017, 100% of our marine assets (all four BOST river barges, tug boat and floating dock) were broken down and non-operational, which limited transportation of petroleum products across the country. Our BOLGA-BUIPE pipeline & BOLGA DEPOT were not operational.
10) The CBM which was built on a Build-Operate-Transfer basis for BOST was transferred to TOR and subsequently leased to a South African Company under the single management for BOST and TOR. As we speak, BOST receives no revenue from this operation and TOR is only limited to dividends declared and paid by the South African Company.
11) The Tema Oil Refinery, TOR owed BOST to the tune of $13.3 million as at January 2017.
Fellow Ghanaians, PLEASE HOW CAN THIS BE EVIDENCE OF GOOD MANAGEMENT OF THESE NATIONAL ASSETS?
BOST FROM JANUARY 2017 to TODAY, 31st OCTOBER, 2020 UNDER THE LEADERSHIP OF HIS EXCELLENCY NANA ADDO-DANKWA AKUFO-ADDO.
1) The audited accounts for 2014 to 2018 has been completed with 2019 audited accounts expected to be completed by Q1-2021.
2) Whereas the 2018 account showed a 70% reduction in losses from the previous year, the 2019 management account further indicated a 41% reduction in the loss level from the year 2018. This steady decline in the loss level of the company, from 2017 to 2019, shows that during the year 2020, the company WILL LIKELY MAKE A PROFIT OR AT-WORST, BREAK EVEN.
3) With respect to the $36 million claim by eight (8) BDCs, an in-house committee vetted the figures and reviewed the volume of claims downwards to $15 million after diligent reconciliation with the claimant BDCs. This represents a potential savings of $21 million.
4) Of the $624 million owed to suppliers and related parties by BOST, 97% has been settled as at October 2020. This is huge progress at getting the company to work again. It must be noted that, some of these debts accrued out of losses on BOST/TOR crude import and refinery.
5) Of the US$566 Million, BOST paid US$408 Million from its own resources amounting to an average of US$136 Million per year. The amount paid from the companies internally generated resources amounts to 72.08% of the total amount settled out of the outstanding debts to suppliers and related parties as at 1/1/2017. Who will refer to this as a total mismanagement of a strategic state enterprise?
6) Government gave a support of US$138 Million through the Ghana National Petroleum Corporation, GNPC to help reduce the exposure of the company to the suppliers. This amounts to 24.4% of the amount paid.
7) Among other things, BOST has made a payment of $534,000 towards the rehabilitation of the Tema-Akosombo-Petroleum-Product-Pipeline. The work is expected to be completed in Q2-2021. The amount was raised from BOST’s in-house operations-storage and transmission of petroleum products.
8 ) In October 2019, two (2) of the four river barges which have been out of operations since 2013 were brought back on stream and are currently operational. These two barges generate GHS 400,000 per voyage between Akosombo and Buipe depots; an additional source of revenue to the company.
9) For the safety of the BOST depot in Buipe and the lives of people in the area, an amount of money was donated for the repair of the fire tender at the Buipe Station in January 2020. The repair works are over and the equipment is on standby to provide fire safety for the depot and the people in the area.
10) Repair works on the Bolga-Buipe petroleum Product Pipeline is complete and export of products is to commence in November 2020.
We are on the PATH TO TRUE TRANSFORMATION!
FELLOW GHANAIANS, the evidence is clear and Ghana IS working again under the leadership of HIS EXCELLENCY NANA ADDO-DANKWA AKUFO-ADDO.
#4MoreToDoMore4U
Striking petroleum tanker drivers in the Republic of Ghana have resumed work effective today, energynewsafrica.com can report.
Their resumption to duty on November 1, 2020, follows an emergency meeting at the instance of the Ministry of Employment and Labour Relations.
Members of the Ghana National Petroleum Drivers’ Union have been lamenting on some unresolved grievances which they explained have been a source of worry.
Key among the grievances were the harassment by police officers at Nchaaban in the Western Region and those on the Cape Coast-Mankessim road, as well as the ban on some 86 LPG stations.
The strike action by the transporters resulted in shortages of fuel products in parts of Accra, Tema, Ashaiman and their environs.
However, a statement issued and signed by the Deputy Minister for Employment and Labour Relations and the leaders of Gas Tanker Drivers’ Union, General Transport Petroleum and Chemical Workers’ Union and Ghana National Petroleum Tanker Drivers’ Union said a consensus had been reached for the drivers to resume duty.
The statement assured that government would take all the necessary steps to resolve the matter with all the urgency it deserved.
Ghana’s largest indigenous oil marketing company, GOIL COMPANY Limited has grabbed two prestigious awards at the 2020 Ghana Energy Awards and the Ghana Business Awards 2020.
The highlight was the conferment of the ‘CEO OF THE YEAR- PETROLEUM’ category to the Group Chief Executive Officer and Managing director of GOIL, Mr. Kwame Osei –Prempeh at the Ghana Energy Awards.
The Award recognized the effort of Mr. Osei Prempeh among five other nominees for his contribution to the Petroleum sector, and especially pursuing excellence in the midst of the COVID-19 Pandemic.
Responding, Mr. Osei Prempeh dedicated the award to the hardworking staff of GOIL and all consumers for their loyalty to the brand.
He was hopeful the award will spur the company on ‘to rise and soar like an eagle for the benefit of not only staff and shareholders but for mother Ghana’.
In another development, GOIL has been recognized as the ‘OIL & DOWNSTREAM COMPANY OF THE YEAR’ at the third edition of the GHANA BUSINESS AWARDS.
The awards noted the excellent contribution of GOIL as not only the number one Oil Marketing Company, but also the biggest indigenous oil entity committed to partnership and innovation.
The award was received by Mr, Martin Olu-Davies, Head of Administration and Human Resource.
Source:www.energynewsafrica.com
The Chief Executive Officer of Ghana’s largest state power generation company, Volta River Authority (VRA), Ing. Emmanuel Antwi Darkwa, was, on Friday, adjudged the CEO of the Year for the power sector category at the 4th Ghana Energy Awards.
Ing. Emmanuel Antwi Darkwa beat MD of ECG Kwame Agyeman-Budu, CEO of GRIDCo Ing. Jonathan Amoako Baah,CEO of SunPowrr Innovations Ernest Amissah, CEO of Bui Power Authority Fred Oware and CEO of Meinergy Technology Kevin Wu to become the power sector CEO of the Year.
The prestigious energy event, which took place at the plus h Movenpick Ambassador Hotel, Accra, capital of Ghana, also saw VRA winning the Corporate Social Responsibility of the Year award.
Meanwhile, VRA which Ing. Emmanuel Antwi Darkwa heads also won the Corporate Social Responsibility(CSR) Company of the Year. The Authority was also awarded for its outstanding role in the fight against Covid-19 pandemic.
Other award winners in the power sector category were Bui Power Authority, Sunon Asogli Ghana and GRIDCo,
Ghana’s second largest power generation company, Bui Power Authority’s (BPA), is set to commission the first phase of its 50MWp solar power park in the Bono Region in the Republic of Ghana.
The 50MWp solar power park, which is situated on 200 acres of land (equivalent of 151 football pitch), is in two phases.
The BPA targeted 10MWp out of the 50MWp for the first phase but the Authority has surpassed it and as at last week, it had installed more than 15MWp.
Briefing the press after the Board of BPA inspected the facility, its Chief Executive Officer, Fred Oware said they are targeting to install between 20MWp and 25MWp, adding that “this will be commissioned in the middle of November.”
He said after the commissioning of the first phase, they would continue to add on until they reach the 50MWp target.
“We’re going to have 100megawatts on this site and will do it in 50s. But even with the 50MW, we will do them in bits, so we planned to do 10MWp but currently we have surpassed that,” he said.
Members of the BPA Board in a group photograph after inspecting the solar plant
Explaining the broad vision of the Bui Power Authority, regarding renewable energy to energynewsafrica.com, Mr Oware said the Authority has planned to construct a solar park with a capacity of 250 megawatts.
He explained that apart from the 50MW solar park, which is currently ongoing, they are also constructing 1MW floating solar park on the reservoir of the Bui Dam.
Mr Oware said the 1MW floating solar park is scheduled to be completed by the end of this year, adding that the Authority intends to scale it up to 5 megawatts.
He said the Authority has also acquired sites in the Northern Regions and is planning to undertake solar projects including wind power by next year.
According to him, per the Authority’s plan, it would be able to develop 2500MW of renewable energy in line with the government’s vision to ensure that 10 percent of the country’s energy mix is from renewable.
Touching on the journey towards the construction of the solar power park, Mr Oware said, initially, some staff of the Authority were not in support, but along the line, they came to appreciate the need for the project.
On how the covid-19 pandemic impacted on the project, he said way back in December, when it became obvious that the covid-19 could be a global problem, the Authority started putting in place measures to avert its impact on the project.
Among the measures the Authority instituted were that no staff was allowed to go outside the project site and also banned entry of outsiders from visiting the project site including family members of the workers.
He said the Authority provided all the logistics including food for the staff to ensure that the project continued despite Covid-19
He commended the engineers and all the staff for rallying behind him to see the project on course.
Board Chairman of BPA, Amb. Afare Apeadu Donkor who said he was satisfied with the state and progress of work, also commended the staff for working to ensure that the project was completed to add on to the country’s energy mix.
Other Board Members who were present at the inspection of the facility are Mrs. Sylvia Maria Asare,Dr Adams Sulemana Achanso, Mr Kwaku Bowiansa Abrefa and Mr Gabriel Osei (MP).
Earlier, this year, the Director of Renewable and Alternative Energies at the Ministry of Energy, Wisdom Ahiataku-Togobo who led a team from the Ministry to tour the facility, said the team was impressed by the level of progress and was hopeful that the first phase would be completed as planned.
He commended the Bui Power Authority for giving Ghana value for money by using quality materials for the project.
Mr. Ahiataku-Togobo noted that the project formed part of the government’s efforts toward increasing the penetration of renewable energy (RE) by 10 percent by 2030 as outlined in the Paris Agreement of Ghana’s Intended National Determine Contribution (INDC).
With the recent commissioning of the VRA’s 6.54MWp solar park at Lawra in the Upper West Region, Ghana’s total utility scale installed solar capacity now stands at 49MW.
In terms of total renewable energy capacity (both hydro and solar) in the country’s energy mix, Ghana now boast of about 1,633MW.This comprise Bui Generation Station 400MW + 4MW turbine, Akosombo Dam 1020MW, 160 Kpong Generating Station 160MW, Navrongo Solar Park 2.5MW, Lawra Solar Park 6.54MWp, BXC’s 20MW at Gomoa Onyaadze,
Meinergy 20MW and Safisana 0.1MW at Ashaiman.
The successful completion of the Bui Power Authority’s project will play a significant role in achieving the government’s target for 2020.”
Source:www.energynewsafrica.com
The Executive Secretary of Ghana’s utilities regulator, Public Utilities Regulatory Commission (PURC), Mrs. Mami Dufie Ofori has been adjudged Female Energy Personality of the Year for 2020 at the 4th Ghana Energy Awards Night.
Among other personalities who were nominated for the Female Energy Personality of the Year but lost to Mrs. Mami Dufie Ofori were Ing. Harriette Amissah -Arthur (Executive partner-Arthur Energy Advisors), Khadijah Amoah Country Director –Aker Energy Ghana), Kate Quartey-Papafio (Chairperson-Reroy Group) and Doreen Dedume (MD-TMG Ghana.
This year’s Ghana Energy Awards which took place at the plush Movenpick Ambassador Hotel in Accra, capital of Ghana was under the theme: “Excelling in Crisis: The Energy Sector In A Covi-19 Era.”
The Chief Executive Officer of Ghana’s second largest state power generation company, Bui Power Authority (BPA), Fred Oware, has been adjudged Energy Personality of the Year for 2020 at the 4th Ghana Energy Awards Night.
The Energy Personality of the Year is the Ultimate Category for the prestigious energy event.
Among other personalities who were nominated for the Energy Personality of the Year but lost to Mr. Oware were Mr. Michael Bozumbil (CEO –Petrosol), Wisdom Ahiataku-Togobo (Director for Renewable and Alternative Energies at the Ministry of Energy), Senyo Hosi (CEO-Chamber of Bulk Oil Distributors), Benjamin Boakye (Executive Director of ACEP), Ernest Amissah (CEO-SunPower Innovations) and Henry Osei (MD-Puma Energy &Blue Ocean Investments).
This year’s Ghana Energy Awards which took place at the plush Movenpick Ambassador Hotel in Accra, capital of Ghana was under the theme: “Excelling in Crisis: The Energy Sector In A Covi-19 Era.”
The 4th Edition of Ghana Energy Awards is underway at the plush Movenpick Ambassador Hotel in Accra, capital of the Republic of Ghana.
It is under the theme “Excelling In Crisis: The Energy Sector In A Covid-19 Era”
A UK-based law firm, Volterra Fietta has won a complete and decisive victory for its client the Federal Republic of Nigeria in recent investment arbitration.
Nigeria was faced with claims from foreign oil companies for billions of dollars in compensation, in arbitration at the International Centre for Settlement of Investment Disputes (ICSID).
Nigeria’s legal team, in which Volterra Fietta co-counselled with Nigerian law firm Afe Babalola & Co and U.S law firm Rameau International Law, defeated the claims and even obtained an order that the Claimants reimburse Nigeria’s arbitration costs.
The Award in Interocean Oil Development Company and Interocean Oil Exploration Company v. Federal Republic of Nigeria (ICSID Case No. ARB/13/20) was issued on 6 October 2020.
In it, the Arbitral Tribunal rejected the entirety of the Claimants’ claims on the merits and awarded Nigeria its arbitration costs.
The case involved a series of ground-breaking legal issues.
These included the jurisdictional and substantive scope of the Nigerian Investment Promotion Commission Act (the “NIPC Act”), the scope of the public international law of attribution, concepts of judicial expropriation and denial of justice, and complex quantum questions.
The Claimants were two oil companies incorporated in Delaware.
In 2013, they brought an ICSID claim against Nigeria under the NIPC Act. The Claimants alleged that Nigeria had conspired with a private individual to deprive them of their investments in the Nigerian oil industry.
They also claimed that Nigeria had engaged in multiple violations of customary international law. The Claimants claimed close to USD3 billion in damages, including interest.
The Tribunal’s key findings on the merits confirmed that none of the relevant actions complained of by the Claimants were attributable to Nigeria.
The Tribunal also confirmed that the Claimants manifestly failed to prove any conspiracy involving Nigeria.
The Tribunal’s findings establish that neither the Nigerian National Petroleum Corporation nor Nigeria breached any of its duties towards the Claimants.
Critically, the Award confirmed that the relevant decisions of Nigeria’s courts did not constitute a judicial expropriation or created any type of liability for Nigeria.
Álvaro Nistal, counsel at Volterra Fietta and leading the firm’s work on the case, said: “It is a pleasure to have contributed to our client’s complete and decisive first-ever victory at ICSID. Great teamwork with our co-counsel Afe Babalola & Co and Rameau International Law enabled Nigeria to confront the Claimants’ constantly shifting legal theories and ensure that evidence won the day over conjecture.”
Source:www.energynewsafrica.com
The inaugural AFSIA Solar Awards, organized in partnership with the Africa Energy Forum (aef) (https://www.Africa-Energy-Forum.com), culminated in a grand show streamed online on 29th October. During this ceremony, the winners of 15 categories were unveiled and celebrated.
More than 130 entries were submitted across the different categories from all over the continent over the past few months. The Jury, composed of leading experts in solar energy in Africa, have carefully evaluated each entry to identify the most deserving companies and individuals to be awarded the grand prize during this online ceremony.
Among the 15 categories in competition this year, the most disputed titles included “C&I Project of the Year” and “Mini-Grid Project of the Year”, which is reflective of the increased activity of both of these segments of the African solar industry. “Woman in Solar of the Year” has also been particularly popular among participants. This highlights the very positive trend of the growing involvement of women in the solar industry across the continent.
Winners
Winner
Utility Scale Project of the year
Sterling & Wilson Solar—-for the multi-projects 322 MW contribution to Egypt’s 1.6 GW Benban Solar Complex
Commercial & Industrial Solar Project of the year CrossBoundary Energy for the Jabi Lake Mall project in Abuja, Nigeria
Mini Grid Project of the year
Africa GreenTec —-for their productive-use based Mini-Grid projects in Mali, Niger and Senegal which are often subject to high security risks
Solar Home System Company of the year—-light for achieving the target of reaching 100 million people with solar energy
Residential Project of the year
Munyax Eco —for exceptional achievement in the field of Solar Water heaters having installed more than 1,000 units across Rwanda saving 8,000 tons of CO2 per year
African Solar company of the year
ANKA Madagascar—-for securing 5 MW worth of mini-grids across Madagascar and for the company’s innovative AgriGrid model
African Solar SME of the year
Pawame And Solar Box Gabon—for reaching 80,000 Kenyans with Solar Home System solutions while achieving cash-flow break-even and profitability for developing the “Solar Cube” which doubles the production of traditional solar panels
Financial Advisor of the year
Synergy Consulting Infrastructure and Financial Advisory Services—for their advisory services to cutting-edge large-scale projects across the continent such as the 2×50 MW tender in Botswana, the 32MW Djermaya project in Chad or the world’s first PV-CSP hybrid 200MW project in Egypt
Legal Advisor of the year
Eversheds Sutherland–for their contribution to the Open Solar Contracts with IRENA, the International Renewable Energy Agency, and the Terrawatt Initiative, providing open source standardized contracts to governments across the globe
Technical Advisor of the year
Suntrace—for technical advisory to the Fekola Gold mine hybrid project in Mali, a first of its kind off-grid hybrid project composed of 36 MW of solar, 15.4 MWh of storage, saving 13 million litres of heavy fuel oil annually
DFI of the year
African Development Bank (AfDB) for establishing SEFA, the Sustainable Energy Fund for Africa which has contributed among others First of its kind inventory finance facility for solar irrigation products in East Africa
Woman in Solar of the year
Olaedo Osoka–CEO of Daystar Power Ghana, for leading the expansion of the company from Nigeria to Ghana, Togo and Senegal and realizing C&I projects of 8MW in this 2-years period… only at the age of 27
Solar Innovation for the year
Phaesun—for their work on the RevivED Water Innovation project, a solar-powered desalination and purification systems for brackish water based on electrodialysis technology providing up to 2000l of clean drinking per day
Solar Picture of the year
Alexandre Skander Allegue – Pawame— for a beautiful picture highlighting the impact of lighting in the most remote areas
Solar video of the year
Joanna Gentili – African Minigrids–for a super inspiring and motivating video about electrifying a village in Malawi
An exceptional and global platform
The awards ceremony was organized in collaboration with aef and was conducted online.
This year, aef joined forces with the African Utility Week & POWERGEN Africa plus Oil & Gas Council’s Africa Assembly this October to host a ‘Digital Africa Energy Festival’ – the largest ever energy event for the African continent.
John van Zuylen, Founder of AFSIA, commented; “AFSIA Solar Awards is delighted to be hosted by this much respected programme and to unveil the winners during a digital ceremony on October 29th.
The event was organized as a great show celebrating exceptional achievement in the solar industry and hosted several African personalities such as Ndumiso Lindi, the host of the awards, and the African band and dance troupe ‘Les Merveilles de Guinee’ who gave a thrilling performance. Several leaders of the global industry such as Huawei, Trina Solar and Jinko Solar also provided their support to make this a truly exceptional event.”
Meet the jury
Applications to the AFSIA Solar Awards were evaluated by some of the most experienced professionals of the African solar industry. These experts reviewed every application independently and selected the best ones in each category.
This year the jury was composed of Eng. Lamya Abdel Hady, Head of Sector Private Projects, EETC (Egypt), Bah F.M. Saho, Executive Director, ECREEE (Cape Verde), Jo Dean, Board Member, SAPVIA (South Africa), Jasandra Nyker Managing Director, Denham Capital (South Africa), Aaron Leopold, CEO, AMDA – Africa Minigrid Developers Association (Kenya), Linda Munyengeterwa, Regional Industry Director for Infrastructure, IFC (South Africa), Izael Da Silva, PhD, Deputy Vice-Chancellor – Research and Innovation Department, Strathmore University (Kenya) and Simon Gosling, Managing Director, EnergyNet (UK).
U.S oil and gas supermajor, ExxonMobil said on Thursday that it will cut around 1,900 jobs in the United States in its latest attempt to cut costs and protect its balance sheet amid low oil prices and weak global oil demand due to the pandemic.
“As part of an extensive global review announced earlier this year, the company plans to reduce staffing levels in the United States, primarily at its management offices in Houston, Texas. The company anticipates approximately 1,900 employees will be affected through voluntary and involuntary programs,” Exxon said in a statement on Thursday, a day before it is set to announce its Q3 earnings and a day after it kept its quarterly dividend flat for the first time since 1982.
Exxon has already said it would cut 1,600 jobs in Europe as part of efforts to rein in costs.
Announcing the cuts in the United States, the supermajor, said that “These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions. The impact of COVID-19 on the demand for ExxonMobil’s products has increased the urgency of the ongoing efficiency work.”
After the press release announcing the job cuts, shares in Exxon (NYSE: XOM) climbed by 2.57 percent as of 12:21 EDT, even though oil prices were down by 4 percent at the same time.
On Wednesday, ExxonMobil said it was keeping its quarterly fourth-quarter dividend flat at $0.87 per share – the first time in 38 years that the company has failed to increase the dividend it has been paying for more than 100 years.
Exxon is set to report on Friday its third straight loss in its upstream business this year, as lower oil demand continues to hurt oil companies’ profitability.
For the second quarter, Exxon reported at the end of July its second consecutive quarterly loss, which was the worst loss for the U.S. supermajor in its modern history.
Nigeria’s power transmission company, TCN, on Thursday announced that the West African nation’s power industry attained another all-time national peak electricity generation of 5,459.5 megawatts.
According to TCN, this quantum of electricity was efficiently transmitted through the nation’s transmission grid at a frequency of 50.26Hz by 8.15pm on October 28.
“This milestone in generation is higher than any peak ever recorded in the nation’s power industry as at date,” a statement signed by Ndidi Mbah, General Manager, Public Affairs of TCN said.
“The new peak surpasses the 5,420.30MW achieved on 18th of August, 2020 by 39.2MW,’’ she added.
The Acting Managing Director, TCN, Sule Abdulaziz, commended all the players in the power sector value chain for the feat.
He attributed the gradual but steady improvement in the quantum of power delivery to the collaboration by the sector players.
He said the feat was also made possible by the unbridled effort by the Federal Government through the Federal Ministry of Power in setting the right environment for seamless operations.
Abdulaziz expressed optimism that stakeholders in the sector would continue to work together towards ensuring the continued increase in the quantum of power available to consumers nationwide.
The TCN, he noted, was committed to working with the generation and distribution companies to ensure sustained improvement in the sector for the benefit of the nation.
However, reacting to TCN statement on Twitter, section of Nigerians accused TCN of celebrating what they described as mediocrity.
According to them, they are without power yet TCN is celebrating and underscored the need to kick President Buhari out of office.
Im wondering if this new is for us.. A country of darkness celebrating new record or power generation hahahahah. @TCN_NIGERIA should be a comedy channel on Netflix
Some unidentified men have reportedly shot dead the owner of Sky Filling station at Asuadei in the South Ahafo Ano District in the Ashanti Region.
The suspects, upon killing Alhaji Sadick Abubakar, reportedly left the crime scene on a motorcycle without taking anything from the station.
The incident happened on Wednesday at about 6pm.
According to media reports, an eyewitness recounted that four armed men stormed the facility with a pump action gun and fired shots in the air.
Alhaji Saddick Abubakar was subsequently shot down by the four men, who quickly disappeared from the scene.
Superintendent Richard Boahen is Mankranso District Police Commander who confirmed the incident on Accra based Citi FM said investigations are underway to arrest the culprits.
“On Wednesday, October 28, 2020, at about 5:30 pm Mr. Abubakar Saddick who is the CEO of Sky Filling Station aged 63 was attacked and shot by three unidentified gunmen at a filling station and made away with an unspecified amount of money.”
“The victim was rushed to a nearby hospital and was pronounced dead upon arrival. So far we don’t have enough evidence, but we are still on it. We are taking our time to do a good investigation which will lead us to arrest the real culprits.”
Source:www.energynewsafrica.com
The Nigerian Oil and Gas sector has been the lifeline of the economy over the years and this has been a source of concern to both local and foreign stakeholders.
Dr. Jide Agunbiade, Director, National Oilwell Varco, Houston, Texas, the largest Oil and gas equipment manufacturing company in the world, has shared his views on the nation’s dependency on the sector, the Petroleum Industry Bill among other industry issues
Below is the full interviewHow would you assess the Nigerian petroleum industry?
The petroleum industry in Nigeria is the largest and main generator of GDP in Nigeria. The primary laws and regulations which govern the Nigeria oil and gas industry are the Constitution of the Federal Republic of Nigeria, the Petroleum Act, the Nigerian National Petroleum Corporation Act, the Oil Pipelines Act, Petroleum (Drilling and Production) Regulations 2019 and the Nigerian Oil and Gas Industry Content Development Act. The government bodies charged with regulating the oil and gas industry include the Ministry of Petroleum Resources (headed by the Minister of Petroleum Resources), the Department of Petroleum Resources, as well as the Nigerian Content Development and Monitoring Board.
The Constitution, the Petroleum Act and the Exclusive Economic Zone Act vest the rights to, as well as the control of, all minerals, mineral oils and gas in Nigeria and its territorial waters and exclusive economic zone in the Federal Government. The Minister of Petroleum has absolute discretion under the Petroleum Act to grant oil exploration, prospecting and mining licenses to companies incorporated in Nigeria.
The Federal Government participates in the oil industry through the Nigerian National Petroleum Corporation (NNPC). The NNPC oversees and governs all activities in the Nigerian petroleum sector, whilst the Federal Ministry of Petroleum Resources acting through the Department of Petroleum Resources (DPR) is the regulatory authority. The National Petroleum Investment Management Service, a business unit of the NNPC is responsible for the management of government investments in the petroleum sector.
An assessment of the Nigerian petroleum industry reveals that the NNPC is one of the inefficient government institutions in Nigeria, with heavy political interference, ambiguities, corruption and nepotism. Recent investigations and probes into government corruption in Nigeria reveals that a substantial part of government corruption, originates from the activities that relate to the management of the oil and gas proceeds, supposed to be channeled towards the growth and development of the nation.
Despite the monetary resources remitted to its coffers, NNPC has since been facing challenges in funding its upstream operations and obligations. NNPC has also failed to effectively manage the downstream sector, which is characterized by moribund refineries, scarcities, inconsistent and uncompetitive fuel prices. Despite the abundance of petroleum commodities in Nigeria, the country’s largest import is from the petroleum products, which increases the supply and reduces the value of the Naira in the foreign currency market.
Consequently, NNPC has lost its international goodwill, because of its inconsistency and political interferences, and this has caused doubt and high business risk in the Nigerian oil industry. Though an oil rich country, Nigeria is the world headquarters of poverty, which explains further the poor management of the oil resources in the country.
Furthermore, in recent times the Nigerian petroleum industry has also been negatively impacted by a number of external factors such as a surplus of global crude supply leading to global oil price decline, competition from renewable energy, the devastating impact of the Covid-19 pandemic on the global oil economy, as well as the 2020 fracturing of the OPEC+ alliance (with Russia) leading to a sharp decline in oil prices in 2020. Many of these challenges though near to medium term have the potential to continue for the longer term.
In September 2020, President Muhammadu Buhari proposed the scrapping of the NNPC and the creation of NNPC Limited, in the new Petroleum Industry Bill 2020 submitted to the National Assembly.
The hope is that with the proposed scrapping and commercialization of the NNPC, this will mark a turning point for the petroleum industry in Nigeria and that the challenges that the sector has faced for many years will be addressed and remedied.
Former President Obasanjo decided to privatize the nation’s refineries but was reversed by former President Yar’adua. Today, the nation has spent hundreds of millions on them. If you are the President, how will you address the issue?
More than 55 years after Nigeria started producing and exporting crude oil and gas, the government-owned refineries — located in Port Harcourt, Kaduna and Warri, are sitting idle. Prior to their shut down, the refineries were performing minimally due to years of neglect, mismanagement and pillage, leaving the country almost wholly dependent on imported petroleum products. Claims from successive governments, of turnaround maintenance and rehabilitation of these refineries have yielded no positive results.
The Government has deviated from her traditional role of providing social services, law and order etc., to conducting businesses. She has channeled her funds and energy into business ventures such as running the refineries which has led to spending hundreds of millions with no significant change. Since the de-privatization of the sector by Yar’adua, the nation has suffered decline in oil-revenue despite the amounts been spent on running these refineries.
If I were the President of Nigeria, I would take the following steps –
a) Relinquish government control of the operation and management of the nation’s refineries by divesting a majority of its 100 percent equity to competent, resourceful and experienced independent private refining firms with the requisite capital and technical expertise needed for the development and maintenance of the refineries.
b) Establish a governmental agency which would have a board made up of external and independent stakeholders, that would govern and regulate the activities of these independent private refining firms.
Privatizing the refineries, the government and the nation as a whole stand to gain several advantages which includes but not limited to the following
a) Improvement in the efficient allocation of resources, for mobilizing investment and for stimulating private sector development.
b) Reduce corruption and parasite mentality of Nigerians towards government owned sectors.
c) Infuse capital and modernize technology in our refineries, many of which have not seen any improvement for years.
d) Strengthen capital market by increasing the number of companies traded.
e) Privatization would allow the government to perform its primary function that is administration and maintenance of law and order and leave the actual running of business enterprises to private sectors.
f) Create more employment opportunities as a result of expansion in these privatized sectors and will also will bring change of attitude in workers as private management does not tolerate the attitude that prevails in the public sector.
g) Parastatals were characterized by gross inefficiency, corruption and mismanagement. Conversely, the operational dynamics of privatization favors efficient management.
What is your take on the PIB, have you observed any gap?
The Petroleum Industry Bill (PIB) is an oil reform bill which has been in the works for about 20 years. Successive administrations have tried without success to pass the bill into law, due to political and legislative issues. The PIB is currently under legislative consideration and represents the most comprehensive review of the legal framework for the oil and gas sector in Nigeria, since the industry began commercial operations in the 1960s. The PIB has been formulated to regulate the entire sphere of the industry and repeal most existing oil and gas legislations.
The PIB seeks to increase government revenue from oil, as well as lay down a strengthened legal and regulatory framework for the Nigerian oil industry, set up establishment of commercially driven petroleum entities; and promote transparency in the administration of Nigerian petroleum resources. The bill seeks to address the problem of administering petroleum resources in line with global best practices and to provide for efficient and independent sector regulation.
In September 2020, President Buhari transmitted the much awaited PIB 2020 to the National Assembly. A notable feature of the PIB 2020 is that it proposes the scrapping of the Nigerian National Petroleum Corporation (NNPC) and makes way the creation of the Nigerian National Petroleum Company Limited. The assets, interests and liabilities of NNPC shall be transferred to NNPC Limited. It is further stated in the PIB 2020, that the Minister of Petroleum Resources shall at the incorporation of NNPC Limited, consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted which shall form the initial paid-up share capital of the NNPC Limited and the government shall subscribe and pay cash for the shares. Thus, ownership of all shares in NNPC Limited shall be vested in the government at incorporation and held by the Ministry of Finance incorporated on behalf of the government.
It is envisaged that approval of Nigeria’s Petroleum Industry Bill would turn the NNPC into a limited liability corporation and in turn open a new avenue for fund-raising by allowing the sale of NNPC’s Limited’s shares to investors.
A major gap in the PIB 2020 is that the government’s continued control of the new NNPC raises concerns of a likely continuation of old practices such as corruption and weak accountability. Also, the PIB 2020 does not specifically require the government to sell shares in NNPC Limited and this may stifle the much needed fund raising required for the growth of the sector. Furthermore, unlike previous reform proposals the PIB 2020 does not set a specific deadline for when the privatization/commercialization will be completed.
Finally, the passage of the PIB is being pursued without matching the goals and vision of the PIB and the country’s energy policies. Without linking the PIB to a clear energy policy direction that responds to the troubling issues of epileptic power supply, security of local consumption of gas, reform of the downstream sector and refineries, enhancement of local content, linkages between the Oil and Gas (O&G) sector and local economy in order to unleash the industrialization potentials in Nigeria, Nigeria may never be able to harness the full development potentials in the O&G industry. And for so long, it is unlikely to free the sector from instability that threatens the revenue peace in the Niger Delta.
What is your take on the alleged unbundle of the NNPC under the draft of the new PIB?
NNPC was established on April 1, 1977 and currently has a mandate in exploration and production, gas development, refining, distribution, petrochemicals, engineering and commercial investments, all in the oil industry. NNPC has sole responsibility for upstream and downstream developments, and is also charged with regulating and supervising the oil industry on behalf of the Nigerian Government. NNPC activities basically involve, upstream and downstream operations, including:
• Crude oil production (SBUs)
• Supervision and management of government investment in the oil and gas industry
• Conversion of crude oil/gas into refined petrochemical products (PMS, DPK, AGO, etc.)
• Transportation and marketing of these products.
NNPC achieved the functions listed above through subsidiaries. These subsidiaries are made up of twelve strategic business units and the Department of Petroleum Resources. The twelve SBUs are:
• National Petroleum Investment Management Services (NAPIMS)
• Nigerian Gas Company Limited (NGC)
• Nigerian Petroleum Development Company Limited (NPDC)
• National Engineering and Technical Company Limited (NETCO)
• Integrated Data Services Limited (IDSL)
• Pipeline and Product Marketing Company (PPMC)
• Kaduna Refining and Petrochemical Company Limited (KRPC)
• Port Harcourt Refining Company Limited (PHRC)
• Warri Refining and Petrochemical Company Limited (WRPC)
• Duke Oil
• Hydrocarbon Service Nigeria Limited (Hyson)
• Nigerian Liquefied Natural Gas Limited (NLNG).
Although the functions of the NNPC have been distributed amongst its subsidiaries, it has under-performed significantly in various areas of its responsibility. With allegations of corruption and financial impropriety; legal complexities due to outdated laws; poor maintenance of assets and a burdensome federal character charter necessitating national spread in recruitment, asset locations and resource distributions which has resulted in incompetence and irrational and unprofitable business decisions; its performance in developing the oil industry is arguably woeful.
The extant regulatory frame work and governmental bodies of the oil and gas sector have not promoted a culture of transparency in the oil and gas sector and they have not created the right opportunities or taken the required steps to tackle systemic corruption, oil spillage, petroleum products pricing and supply, amongst others.
There is a strong indication that if the PIB is passed into law by the National Assembly, the NNPC would be unbundled/scrapped (the DPR and Petroleum Products Pricing Regulatory Agency may also be scrapped) and the following new entities would be established –
a) The Nigerian Midstream and Downstream Petroleum Regulatory Authority, which shall be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry.
b) The Nigerian Upstream Regulatory Commission, which will be responsible for the technical and commercial regulation of upstream petroleum operations.
c) NNPC Limited, which shall assume the duties, assets and liabilities of the scrapped NNPC.
I believe the unbundling of the NNPC would make for clear separation of powers, increased statutory and sectoral funding, operational autonomy, transparency in appointments and dismissals, and insulation from political influence, within the newly established governmental entities.
If unbundled, what structure do you suggest should be implemented to further block holes in the sector?
I believe the structures/new entities proposed by the PIB 2020 (as discussed above), should be adequate to block holes in the Nigerian oil and gas sector.
Globally, one key structure that helps block holes in the oil & gas sector is sustainable finance. International experience shows that NOCs need flexible, reliable options for accessing capital while maintaining checks and balances that prevent them from becoming states within the state. Of particular importance is developing a workable revenue retention model that allows the kind of medium and long-term planning needed for effective commercial operations. This can be achieved by publicly listing the NOC shares. If managed well, public listings can enforce market discipline. They have encouraged innovation and efficiency in Petrobras (Brazil), Statoil (Norway) and KMG (Kazakhstan).
As a case study, Brazil partially privatized Petrobras in 1997 with the ratification of Law 9.478. At the same time, the state established a regulatory body, the National Petroleum Agency, to guide Petrobras through its transition to a mixed public-private entity, and in particular, to assist in the sales of its shares abroad (notably on the New York Stock Exchange). Proceeds from the sales then went back into the sector, principally in offshore drilling and exploration.
This exercise served Petrobras’s stated goal of increasing revenues in three ways. First and most obvious, the share sales raised cash up front. Second, compliance with stringent U.S. stock exchange reporting requirements incentivized better, more efficient management, which in turn reassured investors when Petrobras went out to raise capital. Third, the share sale helped reduce fuel subsidy costs, which were ballooning Brazil’s public debt and inflation. By creating new and binding obligations to maximize Petrobras’s profits for shareholders, Brazil gave itself a fresh legal argument against entrenched interests around subsidies. Phaseouts were then done gradually to reduce political fallout, with price controls on products with smaller market shares (jet fuel, lubricants and kerosene) reduced ahead of the big gasoline and diesel subsidies. Within a period of years, Petrobras’s production levels, proven reserves and revenues increased substantially, and the company has further enhanced its skills and reputation as a world leader in deepwater exploration and production.
The Bill provides for a 10% Host Community Fund for inhabitants of communities hosting oil and gas resources but failed to disclose how the fund will be sought. Do you think this will create issues in the future?
The PIB 2020 has proposed that the host communities will receive 2.5% of the actual operating expenditures of E&P companies (working in such host communities) for the preceding year and such funds will be placed into the Petroleum Host Communities Fund (PHCF).
The previous versions of the PIB that were not passed had provided for the creation of PHCF, into which the companies will contribute 10% of their operating expenses.
The PIB 2020 states that the funds will be sought from contributions received from E&P companies operating within the community. The issue I foresee arising is how the payment of the 2.5% of the actual operating expenditure of these E&P companies will be enforced, in terms of if the E&P companies can be made to accurately disclose their actual operating expenditure for the preceding year. However, this may be resolved by ensuring they submit their audited accounts for the preceding year for confirmation.
That being said, the creation of PHCF is arguably not the solution to the Niger Delta crisis and it is indeed incredulous that so much agitation has arisen in this regard. Prior to the proposal and subsequent inclusion of the PHCF in the PIB, various government intervention have been put in place in addition to the allocation of derivation, such as the Niger Delta Development Board, the Oil Mineral Producing Areas Development Commission (“OMPADEC”), the Niger Delta Development Commission (“NDDC”), and the Ministry of Niger Delta Affairs (“MNDA”). Rather than identify and address the root cause of why the various government interventions in the past have not yielded the desired result, there is a shift towards either placing an additional layer of responsibility on oil companies and/or creating another layer of institution which would likely be bogged down with the same problems plaguing the existing institutions.
Of course, the underlining problem is not a mystery, aside from inadequate government funding, a pervasive culture of corruption has contributed largely to the intervention programs making little or no impact over the years (however, this is not a forum for this discuss). The establishment of the PHCF in itself is not untenable and indeed may be a welcome development to bring resource dividends to the oil-producing region. However, the debate should not hinder the progress of the PIB and the creation of the Fund need not be included therein. Rather than creating a totally new avenue to further tax oil and gas companies, why not revamp the structure of the existing institutions particularly the NDDC and the MNDA? These institutions were established primarily to execute Federal Government’s projects for the development and environmental sustainability of the region and are funded mainly by the government and oil and gas companies. Restructuring of an institution like NDDC such that a large portion of the funds accruing to them can be channeled towards creating a PHCF or a Fund with similar characteristics should be considered.
It has been suggested that a good way to prevent mismanagement of such a Fund would be to involve international agencies such as the United Nations (“UN”) in its management. In this instance, the administration of the PHCF would involve representation from relevant stakeholders such as the Federal Government, Governors from the oil-producing States, traditional rulers, Oil Companies, reputable NGOs, the UN as suggested, and more importantly, community-level participation. Such direct grass-root/community level involvement of the people would calm their agitations and ensure that the people have a strong voice in deciding what projects and interventions are required for each of their communities and be able to monitor the implementation process until execution.
Such a partnership initiative would reduce the layer of corruption by ensuring that disbursements from the Fund are utilized for the specific community or regional development project it is earmarked for. The Federal Government also has a major role in ensuring that it meets its funding obligations as and when due.
Bill says assets of the subsidiaries of the NNPC listed under the Public Enterprises Privatization and Commercialization Act shall be delisted from the Effective Date of this Act. But the bill does not provide a clear roadmap for the commercialization/privatization of the NNPC or timelines for attendant transition. Don’t you think this will be prolonged?
From the available literature on the PIB 2020, same does not seem to provide that assets of the subsidiaries of the NNPC listed under the Public Enterprises Privatization and Commercialization Act, shall be delisted from the Effective Date of the Act. This was a provision of the PIB 2018 which has been superseded by the PIB 2020.
However, if this provision remain the same as in PIB 2018, without a clear roadmap and target for the commercialization / privatization of the NNPC assets, I am inclined to agree this plan could take forever to be implemented. The Bill splits NNPC into three companies and creates two new agencies to assume many of the corporation’s current regulatory duties, but the Bill omits most of the details needed to actually make the NOCs more profitable and efficient and as such does not make a good business case for potential investors.
The Corporate governance of the companies, prior to privatization, is not thoroughly addressed. This is evident in the proposed dismemberment of the NNPC into different entities which begs additional elucidation. The PIB establishes 9 institutions. The companies that will inherit the NNPC’s assets now consist of the National Oil Company (NOC), the National Gas Company PLC (NGC), and the National Petroleum Assets Management Company LTD (NPAMC). The ownership structure and allocation of assets amongst the institutions still require further clarification in the Bill.
The Bill also fails to provide clear provisions on the shareholding rights of government, or address the composition of the NOC or NGC boards and exposes the companies to no direct legislative oversight. There are also no precise declarations on how the NOC and NGC would fund their operations and the Bill does not discuss the process of domestic sale of crude oil, which is currently handled by the NOC. The regulators also do not appear to have sufficient independence to effectively carry out their functions and are subjected to major Ministerial supervision, which could introduce far-reaching political considerations into decision-making.
Finally, the objectives of the privatization and commercialization program in Nigeria stated out in Act No 28 of 1999 are:
a) To send a clear message to the local and international community that a new transparent Nigeria is now open for business.
b) To restructure and nationalize the public sector in order to substantially reduce the dominance of unproductive government investment in the sector.
c) To change the orientation of all public enterprises engaged in economic activities towards a new horizon of performance improvement, viability and overall efficiency.
d) To raise funds for financing socially-oriented programs like poverty eradication, health, education etc.
It is not very clear how these objectives are realized in the proposed Bill and this in itself will inevitably lead to delay and prolongment of the commercialization of these assets.
Bill also allows the Agency to accept gifts of money or other property upon such terms and conditions as may be specified by the person or organization. Will this not affect the integrity or accountability of the agency?
This is a provision of the PIB 2018 (this provision may also be replicated in PIB 2020). The provision is replicated below –
(27) The Commission may accept grants of money or other property upon such terms and conditions as may be specified by the person or organization making the gift provided, such gifts are not-
a) inconsistent with the objectives and functions of the Commission under this Act;
b) accepted from persons or organizations regulated by the Commission. (2) Nothing in subsection (1) of this section or in this Act shall be construed to allow any member of the Board or staff of the Commission to accept grants for their personal use.
From the above exceptions in a) and b) as well as (2), I believe these clauses adequately limit the ambit of the Commission to accept gifts and also secure the integrity or accountability of the Commission.
What is your take on a modular refinery?
Recent attempts made in driving the growth of refineries through private investment notwithstanding, Nigeria still has a long way to go in establishing refineries that are capable of producing at full potentials. Quite commendably, there have been some efforts and initiatives in recent years to upgrade existing refineries. These initiatives, if executed rigorously, will drive growth and reforms within the sector in the medium to long term.
By way of definition, a modular petroleum refinery is a process plant for refining crude oil that is engineered and constructed on largely skid-mounted structures. Each skid contains a section of the entire process plant and through interconnecting piping the component skids are linked together to form an integrated operable process plant at the site. A modular skid unit houses a process system within a frame so that the system can be transported easily. The modular process skid offers a high level of quality control, efficient use of space and pre-delivery testing to ensure ultimate functionality. Modular refineries are usually available in capacities ranging from 1,000 to 30,000 barrels per day (bpd).
Modular Refineries are ideally suited for remote locations and are viable for investments by Public-Private Partnership (PPP) as a source of rapid production of primary fuel products and raw materials for Petrochemical Downstream Industries. Establishing a crude oil refinery requires approval from the Department of Petroleum Resources (DPR) in Nigeria. Investors may need to apply for oil block allocation or partner with government at different level to guarantee investment and feedstock for the production plant.
The conditions required to make such an investment in modular refinery workable will include:
proximity and access to crude supply;
location to sizable markets with logistics advantages;
project finance on preferential terms from development credit agencies; and
government incentives.
Prospects of Modular Refineries
Modular refinery which is ideal for stranded production fields and remote locations could be sited in the riverine areas where accessibility to the petroleum products at present seems to be very difficult due to logistics. This will allow the dwellers in such areas to purchase the products at cheaper price than what is obtainable there at present. Modular refinery can be put together within a short time span of about 15 to 20 months and can be established within a short period of time at different locations. This ultimately does away with the need for expensive transportation of crude oil through pipeline covering long distance, which more often than not, are susceptible to vandalization as has been the case in several parts of the oil producing States in Nigeria.
In addition to promoting availability of petroleum products and helping to conserve foreign exchange utilization for the importation of petroleum products, establishment of modular refineries in Nigeria will bring about rapid production of feedstocks for downstream petrochemical plants.
Advantages of Modular Refinery Operation in Nigeria
a) Establishment of Oil and Gas Free Zone: Modular refineries proposal should go with the establishment of oil and gas free zones in all oil producing states as a means of diversifying the country’s economy. Siting modular refineries in the oil and gas free zones would cut investment cost.
b) Incentives from Government: Availability of government incentives through a well-balanced legal and regulatory framework to promote investments and guarantee returns on investments. Also, economic incentives such as tax holiday and grants will encourage investors to come into the sector in their droves.
c) Adequate Security: Restoring security and safety would require a multi-faceted approach involving the use of various pragmatic measures. The government has adopted various measures to stabilize and bring about peace within the Niger Delta region. These include: implementation of the amnesty program, the creation of the Ministry of Niger-Delta Affairs, and the establishment of the Niger-Delta Development Commission (NDDC). However, these institutional arrangements have not delivered effective results and therefore are being reconsidered & finetuned. Interventions need to be sustainable and address the agitations of the South-South communities; which range from developmental neglect to environmental degradation. Furthermore, these plans can be more efficient and effective if delivered as a mix of diplomacy and advanced security intelligence measures
d) Friendly and Effective Regulations: Effective Regulations will be a key driver for growth within the refining sector and therefore bold and decisive reforms are necessary. Regulations are pertinent to driving confidence within the refining sector and boosting attractiveness to potential investors.
Challenges to Modular Refinery Operation in Nigeria
a) Regulatory Uncertainties: The Nigerian oil and gas industry is heavily regulated by multiple regulators including the Ministry of Petroleum Resources (MPR), Department of Petroleum Resources (DPR) and even the Nigeria National Petroleum Corporation (NNPC). The effectiveness of these bodies in the refining sector has remained debatable. According to the Nigerian Extractive Industries Transparency Initiative (NEITI), Nigeria loses an estimated $15 billion yearly in foreign investments due to regulatory uncertainty. Uncertainties in regulations have discouraged various institutional and Individual investors in setting up modular refineries in Nigeria.
b) Security: Industrial sabotage, crude oil theft, illegal refining operations, pipeline vandalism and piracy present significant challenges in the oil and gas industry. Modular refinery investors can be swayed by the security condition of the country as investors would, more often than not, desire an environment, where their investment is not only safe but also secure. The several initiatives to curb instability within the Niger Delta Region of the Nigerian government as well as multinationals notwithstanding, security still mains a major challenge. As a matter of fact, instability in the region has compelled some companies to declare force majeure on oil shipments.
c) Infrastructure: Damaged pipelines, shallow channels and the absence of an effective logistics backbone are some major infrastructural impediments that have constrained growth of refineries in Nigeria. For a while now, damaged pipelines have impeded the supply of crude for refining operations. The rail system which can be a viable alternative for transporting huge product volumes, is highly capital intensive and requires huge investment. Furthermore, the inland waterways are too shallow to accommodate safe use of oil tankers to transport crude oil and refined products to the hinterlands. This has not been quite helped with the paucity of considerable investment in dredging and barges.
d) Feedstock Access: One of the biggest challenges which local and new modular refineries are most likely going to be faced with is how to access feedstock supply on a regular basis. Guaranteed feedstock access has not been aided by inadequate infrastructure, insecurity and unstable production.
e) Sanctity of Contracts: Inability to predict whether contractual terms will be honored and not be deviated from pose a great challenge. Every investor is concerned about the performance of contracts and often wary of contractual breach. Past antecedents of the Nigerian government in its disposition in some of the joint venture contracts with some of its International Oil Companies (IOC) partners sometimes leave a lot to be desired. While there is some motivation that the government is desirous of honoring contracts executed by its representatives, more efforts should be put to ensure that agreements entered into are kept.
Lenders in Refinery Project Finance
Like sponsors, there is no limit to the number of lenders in a refinery project finance transaction. The lenders are the debt financiers of the project – they finance the project by providing long-term loans – and they are prepared to accept the risk involved in the venture.
The principal lenders in a project financing are: T
a) Commercial Banks: Commercial banks (especially international banks) represent a primary source of funds for project financings – they are the largest providers of debt capital in project finance. The banks also offer financial advisory services in the project, and seek to have a high level of control over the management of the project because if the project fails, it may damage them heavily.
b) Export Credit Agencies (ECAs): Essentially, an export credit agency (ECA) is owned by a government. An ECA is a public agency or entity that provides a loan guarantee or funding to projects for an amount that does not exceed the value of exports that the project will generate for the ECA’s home country. Notable examples of ECAs are the Export-Import Bank (Ex-Im Bank) of the United States, the Export Credit Guarantee Department (ECGD) in the United Kingdom, and the Nigerian Export-Import Bank (NEXIM). Because infrastructure projects in developing countries often require imported equipment from the developed countries, the ECAs are routinely approached by sponsors and contractors to support these projects.
c) Multilateral Agencies: Multilateral agencies are established by intergovernmental agreements and unlike ECAs are independent of the interests of any single country member or recipient government – they are designed to promote international and regional economic co-operation. They can provide direct lending, political insurance to other lenders and even equity participation. In addition, these institutions often play a facilitating role for projects by implementing programs to improve the regulatory frameworks for broader participation by foreign companies and the local private sector. In many cases, the multilateral agencies are able to provide financing on concessional terms.
No doubt, Nigeria’s refining sector holds great prospects for the future. There have been some government initiatives to increase local refining capacity to offset continued growth of importing finished products for growing consumer demand. The goal is to provide lower cost, steady supply of fuels and products on a local level.
This is very commendable as it will go a long way in increasing local security of supply for transportation fuels, local electricity as well as sustained use of LPG cylinders for cooking and heating fuel obtained in-country, benefiting from lower regional pricing, transportation, and other incentives such as local jobs creation.
Dr. Jide Agunbiade is a subsea engineer with over 20 years’ experience in the offshore industry. Over the past 20 years, he has been involved at a significant level in virtually all the shallow to Deepwater projects in Sub-Saharan Africa and the Gulf of Mexico.
He is a member of The Nigerian Society of Engineer, Society of Underwater Technology and a Fellow of Institute of Industrial & Systems Engineers amongst other. He has a combined honors degree in industrial and Production engineering from University of Ibadan. He is also a graduate of the General Electric (G.E) advanced engineering program, as well as being G.E green and black belt certified. He has a master’s degree in organizational management, an MBA from the prestigious AIU in Houston Texas and Ph.D. in leadership and Business from HPCU Atlanta Georgia. He is also a Ph.D. scholar in Environmental policy at the Texas Southern University.
He started his career in Nigeria with various Engineering firms in Eket, Warri and Port Harcourt before left for the US close to 20 years ago. Over the last 20 years he has worked at Texaco Overseas, Houston as subsea Engineer, General Electric Houston Texas where he was Principal Engineer for the $4billion Duke Energy Edwardsport IGCC (Integrated Gasification in Combined Cycle) project that built the first-ever IGCC plant in Edwardsport, Indiana. He is currently a director at National Oilwell Varco, the largest Oil and gas equipment manufacturing company in the world headquartered in Houston Texas with 600 locations in 5 continents worldwide. He is a Philanthropist, prolific Investor, Energy Consultant and one of the few Nigerian Subject Matter Expert (SME) in Subsea Production Systems. He has attended and presented at several Conferences, Seminars, and Workshops all over the globe. He has interest and ownership in in several enterprises including one of the largest shipping and Logistics Company in Africa, Oil field and real estate.
The awards noted the excellent contribution of GOIL as not only the number one Oil Marketing Company, but also the biggest indigenous oil entity committed to partnership and innovation.
The award was received by Mr, Martin Olu-Davies, Head of Administration and Human Resource.
Source:www.energynewsafrica.com
Source:www.energynewsafrica.com
