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The Organisation of Petroleum Exporting Countries ( OPEC ) has agreed to further extend the agreement to cut global oil production by 1.2 million barrel per day till April, 2018.

However, Nigeria and Libya were once again exempted from the cut due to domestic challenges already limiting the countries from producing to maximum level.

The decision was taken on Thursday after a joint meeting with 13 OPEC and 11 Non-OPEC countries, who held a meeting for the second time in history to achieve stable and balanced global oil prices.

The Saudi Arabian Minister of Energy, Industry and Trade, Mr Khalid al-Falih said that the groups’ decision was to sustain the success of the existing agreement.

Al-Falih who is the Chairman of the meeting said that the members unanimously agreed to allow Nigeria and Libya be excluded from cuts as their output remained curbed by unrest.

“We recognise and sympathise with the domestic challenges in Nigeria and Libya.

“We understand that they need all the assistance they can get. So we will give them plenty of room to grow. We will take the fall until they do.

“Therefore, we won’t impose a limit on Nigeria and Libya any time soon,” he said.

Al-Falih said that member countries also agreed to legalise the existing cooperation with non-OPEC countries to go beyond oil cuts.

Also, the Secretary-General of organisation  Mr Mohammed Barkindo, said OPEC was working on establishing a relationship with shale oil producers in the hope of getting them to be part of the existing arrangement.

OPEC and non-OPEC countries on Nov 30, 2016 agreed to make a 1.8mbp cut, with OPEC countries making the biggest cut of 1.2mbp and non-OPEC, 600,000 barrels per day.

Until the extension, the agreement which took effect Jan 1, 2017 was expected to last until June 1, 2017.

A breakdown of the agreed oil production adjustment showed that Saudi Arabia was expected to make the largest contribution by cutting production by 486,000 b/d.

Also, Algeria is expected to reduce its output per day by 50,000, Angola, 87,000, Ecuador, 26,000, Gabon, 9,000, Iran, 90,000, Iraq, 210,000, Kuwait, 131,000, Qatar, 30,000, UAE, 139,000 and Venezuela by 95,000.

The cuts helped to push oil back above to 50 dollars per barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues.

However, the success of the cut is threatened by shale oil producers, who continue to operate unchecked, therefore flooding the market and driving down oil prices.

Meanwhile, Nigerian Petroleum Minister days the country is ready to accept OPEC production ceiling. However, the organisation has let the country out in its extended production cut.

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Senators on Wednesday stated that there was no solution in sight to epileptic power problem across the country.

Federal lawmakers made this known while debating on the burden of overbilling being shouldered by electricity consumers in the country in motion sponsored by Senator Dino Melaye.

Melaye had in plenary session on Tuesday sought permission of the Senate to present a motion on exorbitant estimated billings by Distribution Company (Disco) which was granted.

However, senators during debate on the motion on Wednesday took the opportunity to bemoan the fate of Nigerians on the sector itself as presently being managed.

First to critically dissect the entire sector as it is now, was Senator Ben Bruce (PDP Bayelsa East) who declared that Nigerians have catastrophe in their hands as far as the sector is concerned.

According to him, those currently running the sector are technically bankrupt due to a lot of factors not envisaged as at the time the privatization process was being implemented.

“They are technically bankrupt, unless we revisit the entire privatization process. Unless we understand and dissect what went wrong, we will still get estimated billing.

“We have a catastrophe in our hands; there will be no light in Nigeria under the current structure. No hope in sight, unless we revisit the process and try to understand what went wrong and bring in new players with  required capacities.

“Those who privatised the sector did not imagine the naira will be devalued from N160 to about N400 now. Those who invested in the business thought it was like a company where they will make a lot of money. I believe they only had enough money to pay the federal government and make the initial investment; they did not have the capacity to run a power sector company in a modern economy”, he said.

Making similar lamentation, Senator Bukar Mustapha (APC, Katsina State), said going by realities on ground in the sector, the country is sitting on an emergency without any sign of immediate solution.

According to him, though the nation has capacity for generation of over 12,000mega watts but only 4,000mw have been so far achieved at any time out of which 1,800mw are paid for by consumers, making the providers to be in perpetual indebtedness.

He said: “The problem we have is the inefficiency within the system which we have actually so far not decided to address. I will give you a small example: Nigeria has an installed capacity of 12,522 Megawatts of power. We have non-available of 5,300. We have non-operational capacity of 3,180; meaning that the amount that is actually available is just over 4,000 Megawatts out of 12,500.

“We have transmission loss of 228mw, we have distribution `loss of 447 Megawatts. At the end of the day, only 3,800 Megawatts reaches the consumer. And we have commercial loss of more than 36 per cent.

“So, what is actually being paid for out of the over 3,000 Megawatts is only 1,800 Megawatts. So unless and until we decide to look at these inefficiency within the value chain there is no way we can have better electricity generation, distribution and also billing system in the country.

“This to me, is clearly a case of the country sitting on an emergency and a practical way out must be worked out by concerned authorities before we can be talking of steady power supply”

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UGO  AMADI, Assistant Business Editor

 International Renewable Energy Agency (IRENA) has revealed that more than 9.8 million people were employed in the renewable energy sector in 2016, according to a new report from the international body.

Renewable Energy and Jobs – Annual Review 2017, released at IRENA’s 13th Council meeting, provides the latest employment figures of the renewable energy sector and insight into the factors affecting the renewable labour market.

“Falling costs and enabling policies have steadily driven up investment and employment in renewable energy worldwide since IRENA’s first annual assessment in 2012, when just over seven million people were working in the sector,” said IRENA Director-General Adnan . Amin.

Amin added: “In the last four years, for instance, the number of jobs in the solar and wind sectors combined has more than doubled.

“Renewables are directly supporting broader socio-economic objectives, with employment creation increasingly recognised as a central component of the global energy transition. As the scales continue to tip in favour of renewables, we expect that the number of people working in the renewables sector could reach 24 million by 2030, more than offsetting fossil-fuel job losses and becoming a major economic driver around the world.”

The Annual review shows that global renewable-energy employment, excluding large hydropower, reached 8.3 million in 2016.

When accounting for direct employment in large hydropower, the total number of renewable-energy jobs globally climbs to 9.8 million. China, Brazil, the United States, India, Japan and Germany accounted for most of the renewable-energy jobs. In China for example, 3.64 million people worked in renewables in 2016, a rise of 3.4%.

IRENA’s report shows that solar photovoltaic (PV) was the largest employer in 2016, with 3.1 million jobs — up 12% from 2015 — mainly in China, the United States and India.

In the United States, jobs in the solar industry increased 17 times faster than the overall economy, growing 24.5% from the previous year to over 260,000.

New wind installations contributed to a 7% increase in global wind employment, raising it up to 1.2 million jobs. Brazil, China, the United States and India also proved to be key bioenergy job markets, with biofuels accounting for 1.7 million jobs, biomass 0.7 million, and biogas 0.3 million.

“IRENA has provided this year a more complete picture on the state of employment in the renewables sector, by including large hydropower data. It is important to recognise these additional 1.5 million working people, as they represent the largest renewable energy technology by installed capacity,” said Dr. Rabia Ferroukhi, Head of IRENA’s Policy Unit and Deputy Director of Knowledge, Policy and Finance.

The report finds that globally, 62% of the jobs are located in Asia. Installation and manufacturing jobs continue to shift to the region, particularly Malaysia and Thailand, which has become global centre for solar PV fabrication.

In Africa, utility-scale renewable energy developments have made great strides, with South Africa and North Africa accounting for three-quarters of the continent’s 62,000 renewable jobs.

“In some African countries, with the right resources and infrastructure, we are seeing jobs emerge in manufacturing and installation for utility-scale projects.

For much of the continent however, distributed renewables, like off-grid solar, are bringing energy access and economic development. These off-grid mini-grid solutions are giving communities the chance to leap-frog traditional electricity infrastructure development and create new jobs in the process,” Dr. Ferroukhi said.

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UGO AMADI, Assistant Business Editor

Federal Government resolve to reduce importation of petroleum products from the present 95 per cent to 60 per cent by 2018 may be a mirage if investors do not collaborate and invest in developing a refinery in the country.

Reacting to a recent statement credited to the  Minister of State for Petroleum Resources, Dr Ibe Kachikwu, an Energy  expert ,Dolapo Oni , Head Energy Research, Eco Bank Plc disclosed that the federal government need to provide incentives to private refiners on crude oil feedstock and taxes, while fully deregulating fuel prices.

According to him the federal government can achieve something pretty close to 30 % local production and 70% imports or just over that. The refineries have operated at more than 20% capacity for a while now and with some of the efforts put in recently, we might see them achieve an average 30% capacity in 2017, which would translate into about 30% of local consumption.

He also  stated that the issue of Forex may not be a serious challenge for now because it is being resolved gradually and one can see diesel prices are starting to ease.

However, he  explained that the way forward is for investors to make serious investment in refinery  and government should compliment  investors with good incentive .

Also making his remarks, Mr. Reginald Stanley, a former Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), and Chairman, Board of Advisors urged investors to collaborate and invest in developing a refinery in the country.

He maintained that , a single marketer cannot invest in building a refinery because refinery costs more than 250 million dollars for 20,000 barrels today.

“Refinery is not going to work with the present structure of management.

“This is a very tough business and should not be under government management in order to achieve its purpose.

“Today, refineries are such that you must be extremely efficient, because it’s a tough business and it is only the toughest that will survive, and interested investors in modular refineries should plan well,’’ he said.

It could be recalled that Minister  in a function in Lagos said that with the proposed construction of modular refineries in the Niger Delta and more investments in the sector, the importation of refined products would be reduced to 60 per cent by 2018.

According to him, the country will start exporting refined products with the commencement of Dangote Refinery in 2019. Stressing that “The nation is at the turning point where the downstream industry is more critical than ever and will drive the economy.

Currently, the NNPC imports over 95 per cent of petroleum products owing to challenges being faced by marketers in accessing Foreign Exchange.

“It is achievable as Federal Government has shown a strong will to revamping the refineries coupled with the plan to bring about 20,000 barrels per day from modular refineries set to come on stream soon,” he said.

Kachikwu said the country’s refining capacity for the first quarter of this year presently peaked at 10 million barrels of crude oil.

This he noted was against eight million and 24 million barrels recorded for the entire years of 2015 and 2016 respectively.

However, Industry experts in various fora has called for total deregulation of downstream which remains a great challenge to the development of the industry. According to them the downstream business is at a verge of shut down over the huge debt log of two billion dollars owed marketers, which is posing serious challenge.

They are of the opinion that deregulation of downstream will allow market forces drive the industry. As of now with the current price of crude oil in the market and the cap on price set out by the Federal Government at N145 per litre, it does not encourage importation of petroleum products.

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The Chief Executive Officer of Nigeria’s Oando has said worst disruptions in oil-producing Delta region are over, and production could reach 2.2 million barrels per day (bpd) by the end of June.

Oando chief Pade Durotoye told the Africa Independents Forum on Wednesday in London that the long-closed Forcados oilfield could also be back to capacity by the end of June.

“We think that the worst is behind us,’’ Durotoye said. “Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd.’’

Attacks in the Niger Delta had pushed production to just over 1 million bpd at certain points last year, the lowest in decades, but attacks have abated since the start of the year.

The first Foracdos cargo from the main Trans-Forcados export line loaded last week, though operator Royal Dutch Shell has said force majeure remains in place.

Durotoye said “bold actions’’ by the government to address security in the area had helped, and that if it continued, Oando could boost output from 50,000 bpd to 150,000 bpd within18 months.

Durotoye said concerns over more violence had made investors to view the region with a lot of caution.

“Capital is still going to be constrained,’’ he said.

Durotoye also said Nigeria’s long-delayed Petroleum Industry Bill (PIB), which governs everything from the operations of state oil company NNPC to fiscal terms on oil exploration projects, was moving at a more assured pace.

“We expect approval sometime in the second half of the year,’’ Durotoye said.

Uncertainty over fiscal terms has held back upstream investment, especially in capital-intensive deepwater offshore.

Durotoye said PIB approval would “put some (investor) concerns to bed.’’

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OPEC and non-OPEC ministers would meet on Wednesday for informal consultations in Vienna in a last-ditch bid to agree the duration of oil output cuts.

The ministers would also seek to clear a global stocks overhang that has pulled down the price of crude.

Top oil producer, Saudi Arabia, favours extending the output curbs by nine months rather than the initially planned six months, to speed up market rebalancing and prevent crude prices from sliding back below 50 dollars per barrel.

Iraq and Algeria as well as top non-OPEC producer Russia also supported a nine-month extension but some Gulf members, including Kuwait and the United Arab Emirates have pointed to a need for further analysis.

OPEC would meet formally in Vienna on Thursday to consider whether to prolong the deal reached in December in which it with the11 non-members agreed to cut output by about 1.8 million barrels per day in the first half of 2017.

A ministerial monitoring committee consisting of Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman meets in the Austrian capital to discuss the progress of cuts and their impact on global oil supply.

Saudi Arabia, which holds the current OPEC presidency, will also attend.

Several OPEC delegates said they expected the meetings on Wednesday and Thursday to be relatively painless, resulting in an output cut extension by nine months.

“I think the meeting will go smoothly,” a delegate said, referring to signs of consensus in the group, including Iran, which has fought Saudi Arabia in many recent  meetings.

However, several delegates and ministers said they did not believe cuts could be extended to a full year.

Possible surprises could include a deepening of the cuts, but this would likely be minor because the non-OPEC producers that are expected to join the accord for the first time on Thursday, such as Turkmenistan and Egypt, are fairly small.

Oil cuts have helped push oil back above 50 dollars a barrel, giving a fiscal boost to producers.

By 0750 GMT on Wednesday, Brent crude was up 0.5 per cent at around 54.50 dollars a barrel.

However, the price rise has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market’s rebalancing with global stocks still near record highs.

“This is a bit tricky as production cuts cause higher prices which will incentivise more production for the U.S. shale oil and reduce the impact of the production cuts.

“So it’s a bit cyclical,’’ Sushant Gupta, research director for consultancy Wood Mackenzie, said. (Reuters/NAN)

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Zimbabwe, which has not had power cuts for the past one and half years, might experience massive load shedding by May 31, if it fails to settle its power import bill with Mozambican and South African power utilities.

Zimbabwe Electricity Supply Authority (ZESA) Holdings chief executive Josh Chifamba said on Tuesday that the company failed to pay 43 million U.S. dollars it owed South Africa’s Eskom and Mozambique’s Hidroelectrica de Cahora Bassa (HCB) due to foreign currency shortages.

The 43 million U.S. dollars is coming from a payment plan that ZESA struck with the two regional power utilities early this year.

According to the plan, ZESA should have paid 89 million dollars between January and April but only managed to pay 46 million dollars.

HCB and Eskom gave ZESA up to May 31, 2017 to pay up the debt failure of which the two utilities would cut off power supplies.

Overall, ZESA owes Eskom 80 million dollars and 40 million dollars to HCB.

Eskom supplies Zimbabwe with 300MW while HCB provides 50mw.

Zimbabwe requires 1,400 MW daily but is able to produce around 980 MW due to aged power plants.

Chifamba said ZESA was making frantic efforts to secure the money to clear the debt.

“We have been having meetings with the Reserve Bank of Zimbabwe and the Ministry of Finance and Economic Development to find ways of coming out of this.

“Hopefully this week something will come up because everyone knows the effects of failing to pay,” he was quoted as saying.

Zimbabwe has engaged China’s Sinohydro to expand Kariba South Power plant by 300 MW.

The first 150 MW unit of the expansion project is expected to come on stream by December and the other 150 MW unit by the first quarter of next year.

ZESA says the additional 300MW from Kariba would go a long way in helping the power utility to meet national demand.

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The Bonga oil field has produced about 702 million barrels of oil since inauguration in 2005, and operated at more than 92 percent availability in 2016, Managing Director of the oil field operator, Shell Nigeria Exploration and Production Company (SNEPCo), Bayo Ojulari, has said. The volumes came from the Bonga main field and Bonga Phases 2 and 3 that unlocked the nearby Bonga North West field in August 2014. It has capacity for 65,000 barrels of oil equivalent per day.

Addressing energy editors in Lagos on Tuesday on the new lease of life of Bonga after a major turnaround maintenance which was completed in April, Ojulari said one of the highpoints of the turnaround was the engagement of about 65 Nigerian contractor and subcontractor companies. Over 1000 people were involved, spread across worksites and vessels in the exercise described as the biggest in scope in the 12-year history of the asset.

He said, “The exercise stimulated growth of support industries vital to deep-water asset management. It provided a wider benefit to the Nigerian economy by boosting demand for a range of goods and services including offshore vessels and platforms, materials, floating hotel and helicopters.”

According to Ojulari, the turnaround witnessed an optimisation of resources and was safely completed within schedule. The exercise included statutory and regulatory checks and inspections; repairs and replacement of equipment; and upgrade of facilities.

A critical success factor, according to Ojulari, was the collaboration by more than 10 functions who benchmarked their contributions against a robust execution plan. Procuring materials from Original Equipment Manufacturers (OEMs) saved cost and ensured seamless delivery, and the project team sourced key equipment and carried out fabrications within Nigeria. This innovation, he said, marked a turning point in SNEPCo’s efforts to develop the capabilities of Nigerian companies in the provision of goods and services in deep-water oil and gas production.

Ojulari expressed delight at the increasing number of women on the frontline, noting that more women were involved at every stage of the turnaround compared to any of the three previous exercises. “I’m very pleased that over 95 percent of these women are Nigerians and they add to our growing pool of Nigerian deep-water professionals produced through the asset,” he said.

He commended the Nigeria National Petroleum Corporation (NNPC) and its co-venture partners for their timely support in the safe delivery of the turnaround.

SNEPCo is credited with producing the first generation of Nigerian deep-water oil and gas engineers, and in 2016, Bonga won ‘Asset of the Year’ Award in the Shell Group.

Bonga is Nigeria’s first deep-water development in depths of more than 1,000 metres, and is located 120km offshore Nigeria. The Bonga Floating Production Storage and Offloading vessel receives crude and gas from production wells on the seabed and has the capacity to produce 225,000 barrels of oil and 210 million standard cubic feet of gas per day. SNEPCo operates Bonga in partnership with Esso Exploration and Production Nigeria (Deep Water) Limited, Total E&P Nigeria Limited and Nigerian Agip Exploration Limited under a Production Sharing Contract with the NNPC.

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It was a worrisome development as two under-aged vandals were arrested in Owerri, Imo State by members of a neighbourhood watch.

The vandals, who are identified as Nnaemeka Azuna,16, and Ugochukwu Malachy, 13, were cutting aluminum conductor cable belonging to the Enugu Electricity Distribution Company (EEDC) when luck ran out on them.

Both have been handed over to the Nigeria Security and Civil Defence Corps (NSCDC), Imo State for further investigation.

In a related development, Solomon Nwafor, an indigene of Ebonyi State, arrested early in the year for being in possession of intermediate core cable vandalised from an EEDC distribution substation located at Kano Street, Coal camp, Enugu has been sentenced to two years imprisonment.

Also, Mohammed Isa, who hails from Jigawa State, in company of two unidentified accomplice attacked EEDC distribution substation located at Orji Community, Owerri, Imo State.

Ifeanyi Anyanwu and Kelechi Ahuruonye, both from Mbaise town were apprehended while attempting to vandalize a distribution substation at Umu-Awuka community in Owerri North.

Franklin Ani was arrested for forgery and printing of EEDC electricity bills and was subsequently arraigned at Onitsha Magistrate Court.

Three vandals, Ifeanyi Nwankwo, Chukwudi Nweke and Eberechi Nwafor, were responsible for vandalizing bare aluminium conductors from nine fallen LT poles at Ndiowu Community in Orumba North, Anambra State were arrested with the support of the community’s vigilante group.

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Eko Electricity Distribution Company (EKEDC) on Monday announced that there would be five days power outage within Ikoyi, Victoria Island and part of Lagos Island from May 24 to May 28.

The company’s General Manager, Corporate Communications, Mr Godwin Idemudia, said in a statement in Lagos that the outage was to enable the maintenance crew from the Transmission Company of Nigeria (TCN) to address technical issued at Alagbon transmission station.

Idemudia said  there were technical and maintenance issues to be resolved on various transmission stations equipment and devices within Alagbon station.

“We want to inform our esteem customers that from Wednesday, May 24 to Sunday, May 28 there will be an outage within Ikoyi, Victoria Island and part of Lagos Island.

“This is to enable TCN maintenance crew resolve some technical issues within Alagbon transmission stations,’’ he said.

The EKEDC spokesman said the company highly regrets any inconveniences caused by the five-day outage.

He, however, promised that supply would be restored to affected areas as soon as the maintenance is successfully completed.

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