nation0428

More documents

Recommendations

Info

THE NATION TUESDAY, APRIL 28, 2015 ENERGY Hike in electricity tariff likely this week DESPITE poor power supply nationwide, the Federal Government may increase electricity tariff this week, it has been learnt. Sources told The Nation that the National Electricity Regulatory Commission (NERC) has given the electricity distribution companies (DISCOs) notice of the increase. But, it, according to the source, has not given them details of the planned hike. The commission wanted to increase tariff last December but because of Christmas, it was postponed to January. It later announced a 50 per cent reduction which Nigerians saw in political gimmick for the March 28 presidential election. Last month, NERC said most residential consumers in the R1 and R2 categories did not experience any increase in tariff when rates were raised on January 1. It said the increase only affected industrial, commercial and highend residential consumers, stressing that most people in the R1 and R2 categories would begin to pay increased tariff from July 1 this year. The Commission also announced the reduction in tariff by •Continued from page 18 population.” Nigeria’s inability to monetise its enormous natural gas resources is a major challenge. Gas he said, has great potential to accelerate economic growth adding that the huge deficit in our energy consumption, especially electricity, which has constrained our economic growth can be easily eliminated if gas is fully utilised. The key is to adopt a pricing regime for gas that will encourage investment in gas infrastructure, he added. On the government’s support to local content development, Wale Tinubu, the Managing Director/ Chief Executive Officer of FIRST Exploration & Petroleum Development Company Limited, Mr. Ademola Adeyemi-Bero and the Chairman/Chief Executive Officer of Waltersmith Petroman Oil Limited, Mr. Abdulrazaq Isa, urged the government to persuade international oil companies (IOCs) to divest idle or low producing oil fields in their possession to local firms to increase local companies’ oil production and reserves. Power sector By Emeka Ugwuanyi 50 per cent, following what it called “bombardment of complaints” from customers who decried the increase that was announced earlier this year. According to NERC Chairman, Dr. Sam Amadi, the reduction was in line with the commission’s business rules after considering the Manufacturers Association of Nigeria (MAN) protest on the implication of the January 1 hike. He said NERC took the action because merit in the argument put forward by MAN that the increase would affect their businesses. Investors in the power sector have been calling for upward review of electricity tariff to match the cost of output and also help them (investors) recoup their investment fast. According them, revenue collections from the consumers are far much lower than the investors expected pre-asset handover. The poor collection, the investors added, is also worsened by the technical and commercial losses, which are greater Challenges before Buhari The major problem of power supply is lack of diversification of sources of supply. The dependence on gas-fired power plants is a setback because when a major gas supply pipeline is vandalised, the country is thrown into darkness. Therefore, besides linking the thermal power stations with pipelines that will supply gas to them, government should also look at generating power from coal, solar, wind and building more hydro power stations and also reinforc- THE passage of the Nigerian Content Act has improved the operation of indigenous drilling operators, the President, International Association of Drilling Contractors (IADC), Nigerian Chapter, Mr. Sola Falodun, has said. He said the Act has made local operators in the oil and gas industry to play better and record good profit. “With the passage of the Act, drillers and other operators in the sector get more jobs. They finance than the assumptions given by the Bureau of Public Enterprises (BPE) before the assets were handed over to them. The Multi-Year Tariff Order (MYTO) provides a 15-year tariff path for the Nigerian Electricity Supply Industry (NESI). The MYTO methodology sets out the basis and pricing principles by which the tariff of various categories of consumers are fixed or determined. It also determines load allocation to various electricity distribution companies, the closest value chain to consumers. The MYTO usually have major review every five years but every June, a minor review is carried out by NERC. The review is determined by market fundamentals. The residential customers’ tariff, especially R1 and R2 under MYTO, are subsidised by about 50 per cent by the government because they are categorised as customers with very low incomes. Their consumption, however, is subsidised with charges from other classes of customers, according to MYTO provision. However, the planned increase in tariff is coming at a very wrong period because power supply across the country is at its worst. •From left: Chief Executive Officer, SEPLAT, Austin Avuru; Deputy Managing Director, FBN Capital, Taiwo Okeowo; and Chief Finance Officer, SEPLAT, Roger Brown at the signing ceremony of the $700 million for SEPLAT in Lagos. ing the transmission segment of the power supply value chain. The transmission network is very weak and unable to wheel 3,000megawatts (Mw) of electricity efficiently. There is also need to legislate on power theft, vandalism of power equipment and facilities, so that such vandals and thieves are appropriately punished to deter others. Enthroning the right electricity tariff and ensuring adequate gas supply will boost growth of the power industry, the experts said. ‘Nigerian Content Act has benefited oil drillers, others’ Conoil set to play big in N250b lube market CONOIL Plc has unveiled plans to play big in the nation’s lubricant market which is projected to hit the N250 billion mark by the end of this year. The projected high revenue from lubricant business is predicated on the expected upsurge in the demand for lubricants by the automobile and industrial sub-sectors of the economy. According to a statement, the company will invest over N5 billion in building a new lubricant manufacturing plant and filling lines, in addition to big lubricant plant in Apapa, Lagos, to significantly increase its engine oil production capacity. This will put the company in good stead to take huge advantage of the projected growth in the domestic lubricant market and invariably skyrocket its lubricant contribution to its overall turnover. The substantial increase in lubricant production, Conoil said, is projected to boost the company’s bottom-line while also increasing significantly its industry share in the lubricant segment. Conoil ranks as one of the nation’s topmost marketers of quality lubricants with a reputation for reliability and unsurpassed performance. Its popular lubricant brands of Quatro and Golden Super Motor oil hold top positions in the market and are adjudged the brand of choice. The company also has wide range of industrial lubricants for SEVEN Energy International Limited has started supplying gas to the 560 megawatts (MW) Cala- bar National Integrated Power Project (NIPP). The commercial delivery of gas to Calabar NIPP started in March, this year, and is being executed through Accugas, a wholly-owned subsidiary of Seven Energy. When operating at full capacity, Calabar NIPP will increase national power generation by over 10 per cent. According to the company, gas is being supplied to the power plant from Seven Energy’s Uquo Gas Processing Facility in Akwa Ibom State through the Seven Energy pipeline network. The gas supply will enable the power plant to complete commissioning and start the delivering electricity to the national grid. The Chief Executive Officer, Seven Energy, Phillip Ihenacho, said: “Delivering a cost-effective and reliable gas supply is critical to providing sustainable power supply into the national grid to meet the government’s reform objectives and to facilitate industrial development. I am delighted that our ability to deliver an indigenous gas solution, from end to end is now being recognised by a broad range of industrial and power sector customers. Not only will the gas we supply drive en- By Akinola Ajibade big-ticket transactions, hitherto the preserve of the International Oil Companies (IOCs). The divestment of shares by the IOCs and the subsequent interest shown by independents or local operators to buy into their assets is a good omen to the industry. We hope the trend will continue in the sector,” he said. Falodun said the passage of the Petroleum Industry Bill (PIB)would revolutionise the industry because operators would adopt and adapt to new technologies and practices. He noted that crude oil theft, illegal bunkering, pipeline vandalism, and other unhealthy practices have slowed down exploration, adding that passing making relevant laws would position local operators for better performance. He said recouping investment on oil rigs is not easy, adding that with time the operators would overcome their challenges. 51 applications in manufacturing, textile, cement, breweries, oil exploration and producing companies, and transmission oils for the transmission and gear system of vehicles. With a total consumption of 600 million litres, according to industry sources, which amounted to one percent of the world’s total demand, Nigeria ranked as the third largest consumer of lubricating oils with gross earnings of N150 billion in 2013. Notwithstanding the huge potential and contributions of the lubricant business to the growth of the nation’s economy, the market is threatened by the importation of sub-standard and offspec finished lubricants from the Far East. The Department of Petroleum Resources (DPR) and industry stakeholders have expressed concern that the local lubricant market has become a dumping ground for substandard and off-specifications imported engine oil. The DPR raised the alarm over the negative environmental and economic impact of the quasi-lubricant substances. Lubricants are technology-driven products with value-addition to base oil, one of the refined byproducts. They are necessary products to guarantee energysavings, cost-effective and maintenance of plant and machinery in industry to sustain the nation’s industrial growth and economy in general. Seven Energy begins supply to Calabar NIPP hanced power generation, but when combined with improvements in transmission and distribution, it will also facilitate industrial and commercial developments which will have a far reaching impact throughout the community, stimulating industry and generating employment as a result.” The Managing Director, Accugas Steve Tierney, said: “The Calabar NIPP is a major power plant in Calabar and a further endorsement of the quality and reliability of our services. Our strong capability across the region with ownership of gas reserves and pipeline infrastructure has enabled us to commercialise our gas assets, delivering a solution that the market has been demanding for many years. We are ready and look forward to adding more customers to our network across the South East of Nigeria, bringing affordable and reliable gas to a wider audience.” Seven Energy has invested over $1 billion in the Southeast region of the Niger Delta in the last five years and since the commissioning of the Uquo Gas Processing Facility last year, the firm has also started the supply of gas to other off takers such as the Ibom Power Company, Notore Chemical Industries Limited and the United Cement Company of Nigeria, also in Calabar. How non-producing marginal fields can be productive, by firm’s chief THE Chief Executive Officer Eunisell Solutions, an indigenous oil and gas service company, Mr. Dickson Okotie, has said there is hope for marginal fields that are yet to produce, in view of the imminent revocation of their licences. He told reporters at this year’s oil and gas awards in Lagos that such fields could still produce with the application of technology. He also noted that marginal field operators face many challenges ,including lack of access to finance and technical competence which have prevented them from fully benefitting from the Local Content Act. He said: “We all know that licences which were awarded for marginal fields in 2003 have expired and those whose fields are yet to produce will be revoked soon, however, there’s still hope for those fields that are not producing yet because of the type of solution we bring to industry. We have proved to hold the technical competence to develop a field in 120 days as shown in the Qua Iboe marginal field. As soon as we are able to get all parties involved, we roll out our services which may also comprise financing of the entire facility from drilling to production, in the event of the operators inability to finance the project.” He said the company has delivered unique services to various clients in the industry over the years, including the building and financing of central processing facilities for indigenous major indigenous oil and gas producing companies to help local companies benefit from the Local Content Act.
52 THE NATION TUESDAY, APRIL 28, 2015 DESPITE the Cabotage Law, Nigeria is losing N1.8 trillion yearly to foreign shipowners in cargo haulage, it has been learnt. Under the law, coastal trade is reserved for indigenous shipowners; their foreign counterparts are allowed to participate in the business subject to a waiver by the Federal Government. To the Shipowners Association of Nigeria (SOAN), the law is not serving its purpose because the group’s members cannot handle cargoes that pass through the nation’s waterways. The group met in Lagos last week on how to engage the in-coming THE NATION BUSINESS MARITIME Stories by Oluwakemi Dauda MaritimeCorrespondent Muhammadu Buhari administration on involving its members in crude oil lifting. Sources close to the group said a vessel involved in offshore operations collects at least $5,000 daily. This, according to a source, is the least amount collected by foreign vessels on the nation’s waters. The country, he said, is losing $10 billion yearly to foreigners because of the government’s alleged failure to engage indigenous ship chandlers; and also losing N45 billion yearly due to the preference given to foreign ship owners and their choice of insurers over the indigenous companies in the lifting and importation of fuel. The Federal Government, a source said, loses over N3.5 billion monthly in freight insurance, urging the in-coming administration to arrest the situation. • Deputy Comptroller of Customs Biri inspecting the seized goods at the Government Warehouse in Lagos. PHOTO: OLUWAKEMI DAUDA Customs seizes N105m goods concealed in train THE Monitoring Team of the Nigeria Customs Service (NCS) at Idiroko has intercepted a train from Kano, carrying assorted textile and other goods at the Abeokuta Railway Station in Ogun State. The team was led by the Deputy Comptroller of Customs, Yahaya Usman Biri. Sources told The Nation that the team had been on the trail of the consignment from Kano following a tip off that the items came from unapproved routes to the train station. The items evacuated from the two coaches included 27 bales of blanket, 141 long bales of ankara materials, 49 cartons of choc balls, two gallons of vegetable oil, four bags of 40kg parboiled rice, three small sacks of printed textile materials, one carton of bonny cream milk, one sack of detergent and 159 small sacks of textile materials. A senior Nigerian Maritime Administration and Safety Agency (NIMASA) official, who pleaded not to be named, said the amount foreign ship owners pay to the agency and others is meagre compared to what they repatriate. He put the Federal Government’s loss at over N1.8 trillion yearly, wondering why the loopholes were not plugged by the out-going administration. Indigenous insurance companies, he said, were sidelined in the insurance of imported fuel both locally and internationally “The sorry situation we find our country as a maritime nation is ridiculous and in absolute contravention of the Local Content Act. “For instance, Nigerian ship chandlers are supposed to be given 95 per cent of business opportunities in the ship chandelling industry and other opportunities to render services in the ships. The in-coming administration needs to ensure that the local content Act is wholly implemented in order to create jobs for Nigerians in the maritime, oil and gas sectors effectively. “The participation of multinational companies in ship chadling has rendered many Nigerians jobless and the Buhari led government must correct these anomalies. “When the Cabotage regime came on stream, the intention was mainly to stimulate the development of indigenous capacity in the Nigerian maritime industry.But many years after, the situation remains the same despite the despite the efforts by NIMASA. “In the oil and gas industry, Nigeria has close to 500 oil wells. For each well, there is a rig, which is supported by a minimum of five ships, and they are called oil support vessels. Each of the foreign ships earn $5,000, while others earn $150,000 per day. “The Cabotage Act seeks to reserve domestic coastal trade or Cabotage trade within Nigerian coastal and inland waters to vessels built and registered in the country, wholly owned and manned by Nigerian citizens. Foreign-owned vessels and companies are, however, allowed to participate in Cabotage trade within Nigerian waters, subject to obtaining a waiver and or license from the Federal Ministry of Transport. “Almost 10 years, not much has changed, as the indigenous vessel owners, who the law was designed to protect remained sidelined and impoverished while foreign shipping companies dominate the trade and the Federal Government not looking responsive. “I can say conveniently that even e-mail: maritime@thenationonlineng.net Cabotage: Nigeria loses N1.8tr yearly to Buhari urged to review policy THE Free-on-Board (FoB) policy is causing the country a huge loss, the President, Association of Nigerian Licensed Customs Agents (ANLCA), Alhaji Olayiwola Shittu, has said. He wants the in-coming Muhammadu Buhari’s administration to review the policy. FoB is a trade policy that allows a buyer to pay for the shipment and landing costs of the goods from the port of origin. Shittu urged the President Goodluck Jonathan administration to adopt Cost, Insurance and Freight (CIF) for the lifting of crude oil. CIF, he said, gives the seller the right to arrange for the ferrying of goods by sea to a port of destination, and provide the buyer with the documents necessary to collect them from the carrier. Shittu said a major part of the problems faced by indigenous owners was due to the failure to enforce the foreign ship owners Nigerian Maritime Administration and Safety (NIMASA) Act, 2007, eight years after its enactment. He said Nigeria is the only country that is still using the FoB policy. A member of the group, Mr Segun Ogunsanu, said the indigenous shipping firms have over the years been grappling with lack of cargo support, adding that this had made many of them to close shop, a development which led to unemployment years after the enactment of the act and other legislations, such as the Cabotage Act, 2003 and Nigerian Content Act 2010. “The policy is being used to the detriment of the economy,” he said. Ogunsanu said the adoption of either the CIF or FoB policy by the Federal Government should be based on how the policy is of advantage to the parties involved The items have been transferred to the government warehouse in Ikeja. The team has begun investigation to establish the source of the consignment. The team said it succeeded because of the support of Comptroller-General of Customs (CGC) Alhaji Dikko Abdullahi. The team had made a similar seizure at Iddo Train Terminus in Lagos with the collaboration of the Federal Operation Unit (FOU) Zone ‘A’ officers. • Shittu in the shipping. The intention of the Cabotage Act, he added, was to give indigenous shipping firms the support to enable them to compete with their foreign counterparts, who have usurped the cargoes on the international shipping route and the coastal and inland region. in the crude oil carriage that they do today, if SOAN, ISAN is allowed to do 60 per cent of their own allocation, they will be putting back more than about N1.5trillion or N1.8 trillion into the economy and that is almost half of the budget. What is the budget? It is N4 trillion or something above that. If the ship owners contribute N1.5 trillion or more into it, the multiplier effect of it would be seen in our economy and the job it would create. Speaking at the inauguration of SOAN in Lagos last week NIMASA’s former Director-General Mr Temisan Omatseye said there was no magic to end foreign domination apart from clear cut vision, good policy and implementation and demonstration of enough political will by those in government. “With the poor state of our economy, I think it would be suicidal for us to continue to engage foreigners to lift our crude. The government must ensure that every dollar we pay for the carriage of our oil comes into the economy. “I am very sure that by the time we put the naughty issue before the government it would be ready to engage indigenous ship owners. “We are businessmen and we won’t ask government for money but tell them how to open up the industry,” he said. Omatseye also bemoaned several millions of dollars the country is losing to foreign ship owners and urged the government to end the problem with good policy formulation. SOAN’s President, Mr Greg Ogbeifun, promised that the group would promote the interest of Nigerian-owned vessels and also provide a forum for dialogue among indigenous ship owners. “SOAN comprise ship owning companies with proven track records of activities in the industry recognised by upstream and downstream sectors of the shipping industry as well as by the private and public sectors of the industry. Ogbeifun, who is also the Chief Executive Officer of Starz Group, said SOAN was set up to facilitate participation of Nigerian shipowners in international fora on shipping matters through effective representation “To cultivate and maintain good relations with the government and maritime authorities by contributing expertise in formulating policies and regulations on national and maritime activities. “We won’t set agenda for the new government but will only set a road map for them. We are not a pressure group but a group of businessmen with proven track record,” he said. Five Customs officers in trouble over ‘shady’ clearance FIVE senior Customs officers at the Tin-Can Island Port, Lagos, have been queried for alleged dereliction of duty. They have been invited to the Federal Operations Unit (FOU) in Ikeja, Lagos to explain why they released a 20-foot container carrying goods not declared in the Bill of Lading. Sources said the officers had been ordered to go to the FOU before moving to Abuja to face a disciplinary panel. A source said: “The container was released by senior Customs officials at Tin-Can port but FOU officers intercepted the container, following a tip-off. “Some of the items in the container include a vehicle, tiles and over 300 cartoons of items that were not declared by the importer.” FOU’s Public Relations Officer Uche Ejesim confirmed the seizures. He did not give details.
Page 1 and 2: $370m Abacha NEWS loot Page 5 found
Page 3 and 4: THE NATION TUESDAY, APRIL 28, 2015
Page 25 and 26: ’ TUESDAY, APRIL 28, 2015 E-mail:
Page 29 and 30: Newspaper of the Year AN 8-PAGE PUL
Page 33 and 34: TUESDAY, APRIL 28, 2015 Website: ht
Page 41 and 42: 42 THE NATION TUESDAY, APRIL 28, 20
Page 43 and 44: 44 SHOWBIZ Artistes shine as Star l
Page 45 and 46: 46 HEALTH THE NATION TUESDAY, APRIL
Page 47 and 48: 48 THE NATION TUESDAY APRIL 28, 201
Page 49: 50 THE NATION BUSINESS ENERGY fects
Page 54 and 55: THE NATION TUESSDAY, APRIL 28, 2015
Page 62 and 63: THE NATION TUESDAY, APRIL, 28, 2015

nation0428

Create successful ePaper yourself

Delete template?

Save as template?