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N6bn Power Transmission Projects Stalled Amid Funding Challenge

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  • N6bn Power Transmission Projects Stalled Amid Funding Challenge

Power transmission projects worth about N6bn have remained stalled in the past few years due to lack of government funding, even as the nation seeks to achieve incremental power supply.

The nation’s power generation and distribution companies were privatised in November 2013, but the transmission segment of the value chain was left in the hands of the government.

Since 2002, a total of 130 projects across the country had yet to be completed, the Managing Director, Transmission Company of Nigeria, Dr. Atiku Abubakar, said at a forum held by Eko Electricity Distribution Company Plc in Lagos, with members of the House of Representatives’ Committee on Power in attendance.

He said the nation’s power grid continued to experience collapse as a result of low spinning reserve.

Abubakar said, “In the TCN, we have over 130 big projects, from 330KV to 132KV to associated substations, from 2002. But they have not been completed due to lack of funding from government. For three years’ budgets now, nothing has been allocated for the projects.

“Year in year out, we made provisions for the projects in the budget, but they were removed for reasons we don’t know. In 2015, the power sector had only N1bn allocation; and these projects are worth N5bn to N6bn. They are over 60 to 70 per cent completed; we have all the materials on the ground.”

He said the contractors could not continue the project because payment had not been made, adding, “We hope this year, we will be able to fund the projects so that they will be completed within one year or one and a half years.”

The TCN MD noted that the issue of gas constraints had worsened power supply in the country.

He said, “Principally, that (gas shortage) is what is drawing us back. If you recall in February, we reached 5,074 megawatts, which was the highest ever generated in Nigeria. But now, we are hovering between 3,000MW and 3,200MW.

“We are hopeful that the situation will improve and we will get improvement in generation. Once we are generating anything below 3,000MW, nobody can guarantee the grid stability. That is, system collapse is bound to happen.

He decried the lack of adequate spinning reserve to forestall system collapse, saying, “Sometimes we have 15MW, 20MW and 36MW as spinning reserve. So if you lose 300MW, what can that do in order to quickly rise up and protect the system; you will lose the system. So, that is the issue. But we are trying as much as possible to avoid system collapse.”

The Managing Director, EKEDC, Mr. Oladele Amoda, said when the private investors came in after the privatisation of the sector, power generation was around 3,000MW, adding, “Our demand in Eko is between 700MW and 1,000MW. The best we have got was 500MW, and that was around February.”

He said the gas pipeline vandalism was militating against the drive for incremental power.

Noting that the sector had suffered huge neglect before the privatisation, Amoda said more than 70 per cent of their customers did not have functional meters and the situation was not peculiar to the EKEDC.

He said, “The investors put measures in place to rehabilitate and upgrade the assets. We went to the banks to get loans so as to sustain the network. We purchased a lot of transformers and provided meters to many of our customers.”

The Chairman, House of Representatives Committee on Power, Mr. Dan Asuquo, said, “One thing I think my colleagues and I are taking back is the level of enlightenment and concern, which Nigerians have shown to get better quality service for what they pay for. I think we have an increased agitation for better service for what they pay for.”

He said the committee was monitoring the performance of the power firms to ensure Nigerians were not exploited in any way and to get value for their money.

He noted that the power sector had been denied measurable investment in the last 30 years, saying, “The decay is very much.”

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.

Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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Crude Oil

OPEC Says Uncertainties Remain High in 2021

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OPEC Says Uncertainties Remain High in 2021

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.

In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.

However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.

Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.

But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.

The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.

Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”

“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.

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Crude Oil

Brent Crude Oil Rose to $56.25 Per Barrel

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Brent Crude Oil Rose to $56.25 Per Barrel

Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.

Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.

Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.

Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.

Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.

China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.

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