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Fashola, Stakeholders Focus on Debts Payment, Supply Growth

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The Minister of Power, Works and Housing, Babatunde Fashola
  • Fashola, Stakeholders Focus on Debts Payment, Supply Growth

The 19th ministerial meeting of the Minister of Power, Works and Housing with operators of the power sector, has held with a focus on payment of debts owed the power sector by ministries, departments and agencies (MDAs), and legacy debts inherited from the defunct Power Holding Company of Nigeria (PHCN), and power supply growth.

It held in Lagos with a communique focusing on identifying, discussing, and finding practical solutions to critical issues facing the Nigerian Electricity Supply Industry (NESI).

The operators agreed to encourage the promotion of true story of hope in the sector, based on ongoing projects and efforts to improve the power sector, and limit inaccurate and alarmist comments in the media about the power sector.

The agreement was necessitated by an earlier statement by the Power Minister, Babatunde Raji Fashola.

Fashola had expressed dissatisfaction with a statement made by the Managing Director/Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey, saying that Peavey’s claim that the Federal Government owes Egbin N125 billion and that Egbin had spare 700 megawatts (mw), which could not be evacuated due to the inability of the Transmission Company to wheel it were inaccurate.

The Minister said with that statement Peavey was working against national interest, noting that Peavey was inciting other generation companies (GenCos) not to comply with grid codes and regulations made pursuant to the Electric Sector Power Reform Act of 2005, which prescribed frequency levels of operation for power generating companies.

Fashola also reminded operators at the meeting about the Payment Assurance Guarantees to the generation companies, as well as the verification of MDAs’ debts, which have been reported as part of the government’s plan to resolve liquidity challenges in the power sector.

The communique noted that the Nigerian Electricity Regulatory Commission (NERC) was commended for its new mini-grid regulation, which has yielded new projects with the inauguration of a new 20kw project in Kwali Local Government Area in the Federal Capital Territory, with a plan to power 145 households and five businesses by Haven Hills Synergy Limited, and another to be completed shortly in Kano State. The Minister encouraged investors and developers to cooperate with NERC to fast-track the implementation of the regulation, with the hope that the private sector increases capacity to distribute the over 6,000mw available for distribution.

The report also showed that Eko and Yola Electricity Distribution Companies recorded 100 per cent payment performance to the market operator for service providers, and the meeting was encouraged to make payment for transmission and other services provided in good time.

The Niger Delta Power Holding Company (NDPHC) said it has completed Magboro connection project, and also announced the progress in projects at Ugwuaji, Egbema, Okija, Omotosho and Olorunsogo host communities, expected to be completed by December this year.

The NDPHC listed vandalism as a major challenge to the progress of projects in Afam – Ikot Ekpene axis, and encouraged the public to end vandalism. TCN also announced the completion of rehabilitation works at Omotosho plant in line with planned reconnection of the communities.

At the meeting were NERC, GenCos, distribution companies (DisCos), the TCN, Gas Companies (GasCos) and other government agencies such as the NDPHC, the Nigerian Bulk Electricity Trader (NBET), Nigerian Electricity Liability Management Company (NELMCO) and Nigerian Electricity Management Services Agency (NEMSA), responsible for the regulation and development of the electricity industry as well as the Nigerian National Petroleum Company (NNPC) and the Central Bank of Nigeria (CBN).

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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oil-rig

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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