A total of 2.8 million electricity consumers in Nigeria have no prepaid meters, the Business Leader (Distribution), Sahara Group, the firm with majority stakes in Ikeja Electricity Distribution Company, Mr. Rotimi Onanuga, has said.
The figure represents about 54.15 per cent of 5, 172, 979, the total number of power consumers in the country.
Onanuga, who spoke at the 2016 Huawei Connect conference in Shanghai, China, also said manufacturing and trade enterprises as well as private homes spent an average of N3.5tn (about $21.9bn) annually on diesel and petrol for power generation.
He said that the IKEDC had been able to distribute 61,000 meters within its area of coverage, but stated that the target was to distribute at least 300,000 meters on or before April 2017.
Onanuga listed some challenges facing power generation and the quick deployment meters to include high-line loss rate and serious electricity theft.
“The line loss rate can reach up to 40 per cent, which is much higher than that of European and American countries, pegged at eight per cent.
“Twenty per cent of consumers committed electricity theft and difficulties exist in supervision and regulation,” he said.
He expressed regret about the energy crisis in Nigeria “given that it is the most populous country in Africa, boasting a population of 173 million, which accounts for 16 per cent of the total population of Africa.”
He said, “Despite rich energy reserves, the enactment of the Power Reform Act, and continual government investments, Nigeria’s power supply still faces serious challenges with the fast development of the social economy.
“As the largest economy in Africa, Nigeria vigorously develops its infrastructures and invests primarily in four fields: energy generation, power transmission, power distribution, and renewable energy.
“Yet due to the unstable power supply, manufacturing enterprises, trade enterprises and common families spend an annual average of N3.5tn to purchase diesel and gasoline for power generation.”
The Sahara Group business leader also listed the difficulties in electricity fee collection as another challenge being faced by the IKEDC, saying that the payment period was often as long as three to four months, thereby delaying capital withdrawal.
Meanwhile, the Sahara Group said that it had contracted Huawei Technologies for its Internet of Things solution, which would aid the IKEDC to improve its performance in area of power supply and metering.
Onanuga said, “$1.4m has been paid to Huawei, spanning over a period of over two years, from January 2015 to April 2017, to enable it to set up its IoT solution in solving our power problems.”
The Sahara Group boss explained that the Ikeja Electric was already deploying the Huawei AMI Solution, “which provides a complete set of components, including smart meters, concentrators (Huawei IoT gateway AR530 series), and an electricity operation and management system.”
The Rotating Chief Executive Officer, Huawei Technologies, Eric Xu, said that infrastructure in Africa was less developed, while Information Technology was still in its rudimentary level.
He said, “Africa needs new operating model to provide modern services for its populace.”
According to him, Huawei will provide better solutions to Africa, especially to governments that will help in the transformation of the continent.
NNPC Plans Divestment Pathway For Joint Ventures Partnership
The Nigerian National Petroleum Corporation (NNPC) has said it would outline policies to guide its joint venture partners (JVC) that wish to divest from joint ventures or the Nigerian oil and gas industry.
NNPC Group Managing Director, Mele Kyari on Monday said that Nigeria, as a key player in global energy security, was addressing its challenges, mainly fiscal, security and cost competitiveness, to stimulate investments in the oil and gas industry.
Kyari, who spoke in Lagos while delivering an address at the opening ceremony of the Nigeria Annual International Conference and Exhibition said, “NNPC, as a national oil company, is leading multiple initiatives to address this and other issues.
“As we celebrate the passage of the PIB, we have moved our focus to improve security architecture through collaboration with major stakeholders.”
According to him, the Nigerian Upstream Cost Optimisation Programme is working with operators and service contractors to challenge the cost of operations and increase profitability and growth in the industry.
“On the other hand, we are seeing a wave of divestment by oil majors operating in Nigeria. NNPC as a national oil company cannot stop partners from divesting their interest, even though it creates challenges for us in ensuring that we get the right and competent investors to take a position and add value to the assets.
“The NNPC will ensure that Nigeria’s national strategic interest is safeguarded by developing a comprehensive divestment policy that will provide clear guidelines and criteria for divestment of partners’ interest,” Kyari said.
He said the corporation would make clear distinctions between divestment of shares and operatorship agreements under various joint operating agreements while leveraging its rights of pre-emption and evaluating the operational competence and tract records of new partners.
Kyari said in order to sustain a prosperous business environment, particular attention would be paid to abandonment and relinquishment costs, severance of operator staff, third party contract liabilities, competency of the buyer, and post purchased technical, operational and financial capabilities.
He said the NNPC would declare its first dividend to Nigerians as it prepares to release its 2020 financial statements in the third quarter of this year.
The local unit of the Royal Dutch Shell had in May said that its onshore oil portfolio in Nigeria was ‘no longer compatible with its strategic ambitions.
“We have reduced the total number of licenses in onshore Nigeria by half. But unfortunately, our remaining onshore operations continue to be subject to sabotage and theft,” Chief Executive Officer, Ben van Beurden, told investors at the company’s AGM.
Early this year, Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited concluded the sale of their combined 45 percent interest in Oil Mining Lease 17 and related assets in the Eastern Niger Delta to TNOG Oil and Gas Limited.
Petrol Subsidy Likely to Gulp N2T This Year –Rainoil GMD
Nigeria may end up spending N2 trillion on petrol subsidy this year if the current situation persists, the Group Managing Director, Rainoil Limited, Dr Gabriel Ogbechie, has said.
Ogbechie said this on Sunday at the Nigeria History Series of the Centre for Values in Leadership, themed ‘Indigenous participation in the downstream oil and gas sector’ moderated by Prof. Pat Utomi.
While lamenting the lack of deregulation in the downstream sector, he said the government was spending about N8m daily on petrol subsidy.
He described the sector as highly regulated, saying, “I wonder if there is any other sector of the economy that is as regulated as the downstream.”
He said, “The biggest elephant in the room today as far as the downstream is concerned is the failure, so to speak, of the government to deregulate the downstream – fixing the price at which petroleum products are sold, I believe, is very seriously harmful to this economy.”
According to him, the landing cost of the petrol imported into the country is about N300 per litre, based on the current naira-dollar exchange rate.
Sirius Petroleum and Baker Hughes Collaborate on OML 65 Drilling in Nigeria
Sirius Petroleum, the Africa-focused oil and gas production and development company, has signed a memorandum of understanding with Baker Hughes. The MoU names Baker Hughes as the approved service provider for Phase 1 of the Approved Work Program (AWP) of the OML 65 permit, a large onshore block in the western Niger Delta, Nigeria. Baker Hughes will provide a range of drilling and related services at a mutually agreed upon pricing structure to deliver the initial nine-well program.
Sirius has signed various legal agreements with COPDC, a Nigerian joint venture, to implement this program. COPDC has signed a Financial and Technical Services Agreement (FTSA) with the Nigerian Petroleum Development Company (NPDC) for the development and production of petroleum reserves and resources on OML 65. The FTSA includes an AWP which provides for development in three phases of the block. and Sirius has entered into an agreement with the joint venture to provide financing and technical services for the execution of the PTA.
The joint venture will initially focus on the redevelopment of the Abura field, involving the drilling and completion of up to nine development wells, intended to produce the remaining 2P reserves of 16.2 Mbbl, as certified by Gaffney Cline and Associates (GCA) in a CPR dated June 2021.
Commenting, Toks Azeez, Sales & Commercial Executive of Baker Hughes, said: “We are extremely happy to have been selected for this project with Sirius and their JV partners. This project represents an important step towards providing our world-class integrated well-service solutions in one of the most prolific fields in the Niger Delta. Baker Hughes’ technological efficiency and execution excellence will help Sirius improve its profitability and competitiveness in the energy market.”
Bobo Kuti, CEO of Sirius, commented: “We are delighted to have secured the services of one of the world’s leading energy technology companies to work with our joint venture team to deliver the approved work program on the block. OML 65. We look forward to building a long and mutually beneficial partnership with Baker Hughes.”
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