Stories by Adewale Sanyaolu

At a period the country is battling recession, occasioned by plummeting crude oil prices, the Nigerian National Petroleum Corporation (NNPC), last week, shocked Nigerians with fresh moves to embark on a more rigorous exploration of the Gongola and other frontier inland basins as part of efforts to shore up the oil and gas reserve base across the country.
The Group Managing Director, NNPC, Dr. Maikanti Baru, made the disclosure when he paid separate visits to the Governors of Bauchi, Mr. Mohammad Abubakar; and Gombe State, Mr. Ibrahim Dankwambo, as well as the Emir of Bauchi, Alhaji Rilwanu Adamu, and the Emir of Gombe, Alhaji Abubakar Shehu Abubakar III.
The NNPC had on the directive of President Muhammadu Buhari, embarked on a similar exercise in the Chad Basin, when he gave the management of NNPC a marching order to intensify efforts in its search for hydrocarbon in the Chad Basin.
The Lake Chad Basin Experience
After three decades of elusive search for hydrocarbons in the Lake Chad Basin where the Federal Government spent about $340 million and additional N27 billion, in seismic expedition, Nigeria looks set to continue its crude oil exploration in the North East region. This time around looking at the Gongola and other frontier inland basins.
But, petroleum engineers, investment experts and geologists have warned the Buhari administration could yet burn its fingers in the long run as the geography of the zone may not guarantee a commercial find.
It was on the basis of this sentiment that the recent marching order handed down to the management NNPC to resume oil search in the Chad Basin after 30 years of futile efforts  and closely followed by the recent exploration moves in Gongola and other inland basins is eliciting reactions from stakeholders in the oil and gas sector.
They have argued that the quest for hydrocarbons in the Chad Basin, which is adjacent to Niger Republic, Cameroon and Chad, would seriously be hampered by economies of scale projections, insecurity and the unwillingness of oil companies to drill outside the Niger Delta with already proven reserves. This may also have been responsible for their inability to invest in the North East after 30 years of exploration.
But the Group Managing Director of NNPC, Dr. Maikanti Baru, had while on separate visits to the Governors of Bauchi,  Gombe ,  as well as the Emir of Bauchi, and the Emir of Gombe, had stated that  the search for oil in Gongola was for the good of the country and the region, considering its immense benefits.
The President’s directive is coming after the Federal Government had burnt a whopping N27 billion and $340 million in the three decades of search for oil in the region without commensurate result.
“While there are about 37 billion barrels of proven oil reserves and about 187 trillion standard cubic feet of gas in the South South of Nigeria, what we want to explore in the North is an unproven reserve of about 2.3 billion barrels of oil reserves and about 14.65 trillion standard cubic feet of natural gas available for four or more countries in the Chad Basin,”   a recent study stated.
A strong Defense for Hydrocarbon Search in Gongola
“In strict compliance with President Muhammadu Buhari’s mandate, the NNPC has, therefore, commenced activities in the Gongola Basin by awarding the contract for seismic data acquisition of over 500 square kilometres of 3D seismic data in the first instance.
The NNPC is deploying state of the art technology in the present data acquisition and we are confident that these efforts will lead to clearer definition of the prospective of the basin,” Baru had said
He added that the contractors awarded the contract for the seismic data acquisition in the Gongola Basin, Integrated Data Service Limited, a subsidiary of the NNPC, and the Bureau for Geophysical Prospecting, were mobilising to commence the project.
The GMD stated that the seismic data acquisition activities and exploration well drillings would bring about employment opportunities for youths, adding that when successful, the multiplier effects would contribute to the economic empowerment of the surrounding communities and the nation at large.
President, Nigerian Association of Petroleum Explorationists (NAPE), Mr. Nosa Omorodion, while defending the position of NNPC to move into frontier basin to search for oil said there is no wrong or right time to get involved in exploration activities.
Omorodion said findings have proved that oil, and even more of gas could be found in frontier basins, saying the use of modern technology has equally made the search for oil easier compared to what obtained in the past.
 Experts react
Head, Energy Research Ecobank Development Company (EDC) Nigeria Limited, Mr. Dolapo Oni, said ‘‘I saw the development as well. I have same mixed feelings about it as I have with other exploration efforts. While it’s significantly cheaper to explore now because oilfield service costs are linked to oil prices, countries that take advantage of this opportunity are typically countries that have savings that they made when oil prices were higher. Thus, they are simply plowing profits back into replacing reserves and production,’’ he maintained.
However, he said, Nigeria didn’t save and are cash-strapped, adding that it might not be the best time to be spending a lot of money looking for oil.
‘‘It might also be a reflection of the new focus and discipline in the NNPC that they have committed to these ventures now amidst our financial/economic challenges.
In other words, considering Nigeria’s declining reserves, it’s important for the NNPC to lead efforts to replace reserves and it can’t be subject to availability of funds.
Oni, while hoping that NNPC’s efforts are successful because it will reduce the country’s vulnerability to insecurity in the Niger Delta and give Nigeria an opportunity to re-write Nigeria’s oil engagements afresh. ‘‘We can ensure that new discoveries are properly exploited and communities are properly engaged now to minimize disruptions,’’he disclosed.
In his contribution, Partner, Bloomfield Law Practice, Mr. Ayodele Oni ,said the situation depends on how one views the issue ,adding that considering Nigeria’s geological history, it may be considered a step in the right direction especially to reduce, ultimately, reliance on the Niger Delta basin.
However, he noted that considering current oil prices and the challenges being faced in connection with the modification/review of Nigeria’s hydrocarbons legislation, it is unlikely that anyone would spend money exploring in that area, even if hydrocarbons are immediately found.
‘‘In my view, therefore, the best time to have taken many of the steps now being taken by the government was when oil prices were high. At that time there was enough money to set aside for seismic studies, research etc but the previous administration failed to so do.
Thus, regardless of what happens with government’s efforts in the Chad basin, I do not believe that the benefits would be immediate,’ ’he said.
On his part, Director, Centre for Petroleum Economics and Energy Law, University of Ibadan, Prof. Adeola Adenikinju,had told Daily Sun,that considering the huge financial obligation of the NNPC, adding the burden of oil exploration in the North East would be foolery.
He specifically mentioned the inability of the NNPC to manage its upstream assets in the Nigerian Petroleum Development Corporation (NPDC), coupled with its failure to meet up with its cash call obligations currently put at about $6 billion in its various Joint Venture (JV) operations with IOCs.
The petroleum economist explained that committing huge resources for oil search in that region at a time the global oil market is going through a difficult time would not be a good investment decision for the country to take.
‘‘I doubt if NNPC has the resources to commit to such cause. Again, this is where the issue of political interference comes in. This is not an issue of politics but business. Directing the NNPC to resume oil search in that region is not good for the corporation. The corporation should run as an independent business en-tity devoid of political interference. They should be able to determine whether to resume oil search or not, and not the government telling them what to do,’’ he warned.
His views were equally supported by the publisher of Africa Oil and Gas Report, a magazine focusing on the petroleum sector, Mr. Toyin Akinosho, who warned against the involvement of NNPC in the resumed search for oil prospects in the North East.
Akinosho said though the IOCs were not interested to get involved in exploration activities in that re-gion, they prefer to concentrate their energy and resources in deep water operations, having gradually moved out of onshore prospects as a result of attendant security challenges.
The publisher who is also a geologist with several years of working experience with Chevron, advised NNPC to allow those that are more experienced in that terrain to develop the assets and then pay returns to government, stressing it would be a more sustainable approach.


sterling-bank

MSMEs: Sterling Bank to fund production of solar power generators

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As part of efforts to grow the Micro Small and Medium Enterprises (MSMEs), Sterling Bank Plc has concluded arrangements to fund the production of solar power generators for the National Association of Barbers and Salon Employers of Nigeria (NABSEN).
Director General of Africa Clean Energy Summit (ACES), Mr. Victor Fodeke, stated this at the National Power Programme for MSMEs and Project Roadmap held in Lagos, last week.
The deal which is to be executed by a consortium; Africa Clean Energy Summit (ACES), Africa Clean Energy Group Inc, USA, Always Green Power and Systems Limited and the Environment Communications Limited will further help to increase the over 10 million customer base of NABSEN.
Fodeke said apart from the initiative creating and sustaining over 20 million jobs, it would equally help reduce the level of green house gases.
He explained that the support of Sterling Bank would afford beneficiaries a payment flexibility plan to fund their solar panels, batteries and other accessories which would be available from a minimum of one kilo watts.
He, however, warned would be beneficiaries not to overload the gadgets as such would reduce the lifespan of the solar power generators.
Minister of State Industry, Trade and Investment, Hajia Aisha Abubakar,in her address said that the consortium is also in partnership with Bank of Industry (BOI), New Partnership for Africa’s Development (NEPAD), and Covenant University, Ota to roll out the first batch of the solar generators to the association under the solar generators supply and installation agreement for empowering MSMEs in Nigeria in area of research, capacity building and innovation for solar installers/maintenance and technicians.
Abubakar,who was represented by the Acting Director in the Ministry, Dr. Francis Alaneme, regretted that the capacity of MSMEs is being hampered by plethora of challenges, adding that the challenges are being addressed by critical policy priorities.
“The capacity of MSMEs, which cover the entire range of economic activity sectors in Nigeria is hampered by poor access to credit, poor infrastructure and poor access to market.
These challenges are being addressed by critical policy priorities such as raising awareness and appreciation for entrepreneurship and equipping a new generation of entrepreneurs with requisite business management skills, providing an enabling regulatory environment that supports MSMEs, improving access to financial support and fostering MSME growth and profitability”, she stated.
She urged the stakeholders to give their support in addressing energy crisis by supporting the initiative so as to boost the development of MSMEs as the engine of economic growth.


electricity-comparison

NERC adjudge Benin Disco tops in metering roll out

Benin Electricity Distribution Plc. (BEDC) has emerged tops in metering progress performance rating report.
The rating was carried out by the regulator- Nigerian Electricity Regulatory Commission (NERC) in its second quarter 2016 state of affairs of the electricity supply industry amongst Distribution Companies (Discos) across the country.
The report, which came on the heels of additional 100,000 metering plan according to a statement from the firm, explained that BEDC scored 65.30 per cent to emerge overall lead performer in metering progress aspect of the report.
‘‘BEDC had demonstrated its consciousness of the metering gaps existing across its various customer classes and had commenced the process to cover the metering gap for existing customers in its area of operations.
The company has been proactive in installation of meters having installed over 120,500 meters since takeover. It has taken advantage of both the Industry CAPMI Scheme and own funded meters. More than 90,000 out of these have been installed in 2016 alone, the statement said
On its metering rollout plan for the rest of the year, BEDC said it plans to achieve 100 percent metering of all industrial and maximum demand customers by the end of November 2016; alongside installation of another 100,000 meters for domestic and commercial customers for the remainder of the year; extension of the existing Automated Meter Reading (AMR) capability to 3,000 maximum demand meters, and metering of at least 1,000 distribution transformers in order to adequately account for energy billing to customers.
To achieve the targets set, the company in addition to the existing stock of 32,000 meters said it had placed order for another 45,000 units for distribution, while it has also recently re-engineered its metering process with a view to eliminating all administrative bottlenecks to reduce processing and installation time.
In a related development, BEDC disclosed that it has developed action plan towards reducing technical losses through capacity addition by implementing network improvement projects as described in its Capital Expenditure (CAPEX) plans.
This, it said, includes the installation of power and distribution transformers, line refurbishment by replacing undersized/damaged conductors and HVDS deployment.