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Ibadan DisCo Loses over N1b to Energy Theft Monthly

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Electricity Pole
  • Ibadan DisCo Loses over N1b to Energy Theft Monthly

It is worrisome that the power sector situation is not getting better. This is made worse by the unpatriotic attitude of some consumers, who would not want to pay for what they consume, the Team Lead Revenue Protection, Ibadan Electricity Distribution Company (IBEDC) Plc, Jude Ugwuoke, has said.

Ugwuoke said the electricity distribution companies (DisCos) are running into huge losses, noting that the Ibadan distribution company alone loses over N1 billion to energy theft monthly. He said there’s no business person that would invest and lose such amount of money and be able to grow. It’s not likely, he said.

He said the effect of energy theft was seriously telling on the Discos hence the power shutdowns, which often occur in most parts of the country. He appealed to Nigerians to desist from this kind of practice to enable the DisCos deliver on their promises.

He stated that people are being sensitised on the need to discontinue from energy theft, spread the message across so that people can begin to see the need to pay for the electricity they consume.

Ugwuoke told The Nation in Lagos that the major challenge confronting the DisCos was energy theft by consumers. According to him, about 70 per cent of installed meters are now bypassed, adding that meters are to measure the quantum of energy being consumed but when that has been distorted, there would be huge losses as a result.

‘’Consumers use the energy and they don’t want to pay. A lot of consumers bypass the meters, which the DisCos had invested huge amount of money on’’. It’s a very big problem to the DisCos, he said, but noted that with the kind of strategies the distribution companies are putting in place, the challenges would be taken care of within a short time.

Ugwuoke confirmed that the DisCos also have their own challenges too. He agreed the distribution companies’ metering standard needed to be checked but added that on no account should anybody tamper with the installation even if the meters were not installed at the right place. “It’s against the law, so we need to ensure that we stop tampering with meters, and when this is done, things will change,” he said.

“We have illegal consumers who are not DisCo customers, they only hook on to the network without following the due process, their information would not be provided, they would be using electricity free of charge.”

He warned that the Discos are monitoring these activities and anyone caught in the act would be brought to book.

He also stated that Ibadan DisCo had embarked on enumeration exercise to reorganise its network, so as to know the number of its existing customers. Ugwuoke disclosed that the IBEDC had spent over N5 billion in this process trying to ensure the company effectively runs that process.

With this, the company would be able to know the number of its existing customers, the process according to him, is also targeted at bringing in those illegal consumers and legalise them and bring them to the company’s data base.

“We will be able to know the number of people in our network, that will help in planning and budgeting. So, the moment we know the number of customers we have through this enumeration, we will be able to plan ahead, we will be able to look at what to put in place in terms of metering, among others,” adding that other DisCos are doing the same, and other states are equally embarking on that process.

Stressing the need for metering, Ugwuoke said the moment the customers are all metered and they stop tampering with these meters, pay for what they consume, the DisCos will equally be able to pay for what they consume, adding that the distribution companies too do get bills from the transmission company.

“So, the moment there’s check and balances and people stop tampering with the meters, we will have proper accountability of our energy, the era of paying for what you did not consume or the DisCos losing excessively will no longer be there,” he said.

The Nigerian Electricity Regulatory Commission (NERC) is equally putting measures to ensure that consumers of electricity do not tamper with installations. According to him, the regulatory body had redefined penalties for offenders. Before now, the single phase tampering was N25,000 but now it’s N50,000 while the three phase meter tampering is N100,000.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

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Dangote Refinery

The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

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Oil Prices Hold Steady as U.S. Demand Signals Strengthening

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Crude Oil - Investors King

Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

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Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

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Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.

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