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Power Output Drops by 30% in 2Q, Says Report

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PHCN Power Plant

THE power sector recorded a drop of 30.01 per cent in the second quarter (Q2) due to poor generation caused by militants’attacks in the Niger Delta, a new report has said.

The report said the attacks led to the shut down of pipelines and the shut-in of gas that powered thermal plants between last April and June.

A report, released by the Transmission Company of Nigeria (TCN), stated the status of power generation and distribution during the period.

According to the report, 2,046,821,132.72 kilowatts-hour (kwh) of electricity was generated in April with average daily output of 68,227,371.09 kwh.

In May, grid output was 1,765,782,918.34 kwh with average daily production at 56,960739.30 kwh while in June production was 1,426,183,518.94 kwh and daily output was 47,539,450.63 kwh.

According to the data, Egbin Power Station made the highest contribution to the national grid with 15.81 per cent, Shell’s Afam VI Power Station came second with 13.81 per cent and Geregu Power station provided the least at 0.46 per cent.

However, Afam I-V, Gbarain, AES, Rivers IPP and Omoku Power Stations operated at zero levels. A new Independent Power Plant, Paras Energy, contributed 0.94 per cent. Paras Energy, on the Lagos–Ibadan Expressway, has a bilateral Power Purchase Agreement (PPA) with Eko Electricity Distribution Company to supply its generated electricity.

Generation output from the thermal power stations, especially those outside the Niger Delta, continued to be adversely affected by pipeline vandalism, the report said.

In May, energy dipped by as much as 13.73 per cent compared to April’s output.

Shell’s Afam VI Power station beat Egbin Power Station by making the highest contribution to the grid with 17.32 per cent.

Egbin came second with 15.63 per cen. The new entrant, Gbarain Power Station (one of the NIPP plants constructed by the Niger Delta Power Holding Company), contributed the least with 0.38 per cent while Olorunsogo Power Station, which contributed 0.72 per cent in April, made no contribution.

Total generation went down by 19.23 per cent in June compared with energy generated in May. However, for the first time, Jebba Hydro Power Station contributed the highest energy into the grid with 15.57 per cent.

Egbin came second with 14.58 per cent, while another hydro station, Kanji power station, came third with 14.58 per cent. Omoku power Station resumed production with the contribution of 0.18 per cent.

Throughout the second quarter, AES Power Station, Rivers IPP, and Afam 1-V did not produce any power. The hydro power stations steadily improved their contributions to the grid in the second quarter from 21.78 per cent in April to 23.10 per cent in May and 32.46 per cent in June.

The hydro power stations made the highest contribution in June. Thermal plants (legacy stations) experienced a marginal rise from 30.71 per cent in April to 31.66 per cent in May and dropped to 28.77 per cent in June.

The National Integrated Power Plants (NIPP) produced 20.72 per cent in April, went down to 17.33 per cent in May and dropped marginally to 17.06 per cent in June.

The most significant difference in contribution during this period under review was in the independent power plant (IPP) group. In April, the group contribution was 26.80 per cent and it went up marginally to 27.91 per cent in May and dropped drastically to 21.72 per cent in June.

During the quarter, the national grid witnessed 14 total system collapses and four incidents of partial system collapse.

“In April, the grid witnessed three instances of total system collapses and no incidence of partial system collapse but in May, the grid witnessed six instances of total system collapses and one incident of partial system collapse while in June the grid witnessed five instances of total system collapses and three incidents of partial system collapse. The incidents of total and partial collapses occurred, especially due to generation limitations,” the TCN said.

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.

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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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