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TCN’s Ineptitude Costs 11 Discos Lose N1bn Monthly – ANED

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Kano

The 11 electricity distributions companies (Discos) in Nigeria’s power sector on Wednesday alleged that the inability of the Transmission Company of Nigeria (TCN) to wheel maximum generated electricity to their respective networks was costing them a monthly revenue of N1 billion.

The Discos spoke through their platform, the Association of Nigerian Electricity Distributors (ANED) in response to TCN’s recent claims that the Discos and not it was the weakest link in the country’s electricity value-chain.

Their claim of TCN’s operational ineptitude was contained in a statement from the Executive Director, Research and Advocacy of ANED, Mr. Sunday Oduntan in Abuja.

ANED said the TCN still had the unholy character of defunct and hugely corrupt Power Holding Company of Nigeria (PHCN), adding that the company has not been able to guarantee its members mostly in the north stable power supply.

It explained that the Discos as alleged by TCN, could not be rejecting power or load-shedding their customers because the economics of their tariff was built on improved power distribution and consequent revenue collection.

It also noted that TCN’s plan to execute 22 transmission projects and improve their willing capacity to above 6000 megawatts (MW) within 2016 was doubtful given that the country was already within the fourth quarter of its financial year and no tangible fund has been given to the TCN for the projects by the government.

“It is unfortunate that the new management of TCN, with the departure of Manitoba Hydro, rather than reach out, in partnership, to work with the other stakeholders of the sector, is more interested in pointing fingers and playing the blame game.

“No matter how TCN wants to play it to color the reality of transmission shortcomings, transmission remains the weakest link in the power value chain,” said ANED.

It said: “To date, the maximum wheeling capacity reached by TCN has been 5,074.7MW versus its claims of increased capacity from 5,500MW to 6,000MW, wholly untested and unproven.

“Any plans by TCN to complete 22 critical projects captured in the 2016 budget has to be a function of the availability and release of the requisite funding required for same. Given that we are in the fourth quarter of 2016, it is not clear that TCN has received, nor will it receive, any funding that comes close to enabling it complete the indicated projects – a continued legacy of limited and poor funding of a vital aspect of power infrastructure.”

It explained that: “In view of the dire need of generation, as well as the generation thresholds in the Discos’ tariffs, which constitute the basis of their revenue recovery, it is inconceivable to think that any Disco would load-shed, thereby diminishing its revenue prospects and alienating its customers.

“Factually, a major contribution to the liquidity challenges that the Discos are currently experiencing is TCN’s infrastructure and technical limitations in wheeling power to the proper areas of a Disco’s geographical footprint.”

“Discos are currently experiencing a monthly loss in excess of N1 billion due to limited transmission capacities in various areas of the country, especially the northern part. Even worse, is TCN’s inability to meet its financial obligations, relative to this shortfall, thereby compromising the Discos’ ability to meet their obligations to the Market Operator,” it added.

ANED said it will welcome TCN’s operational improvement which it said can only happen with proper funding, upgrade of its project management capacity, and competent personnel.

It said the power privatisation was premised on turning around the operational profile of the TCN but that progress in that direction has remained quite minimal.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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