BusinessDay 19 Dec 2017
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Tuesday <strong>19</strong> <strong>Dec</strong>ember <strong>2017</strong><br />
<strong>19</strong><br />
BUSINESS DAY<br />
Energy Report<br />
C002D5556<br />
Oil & Gas Power Renewables Environment<br />
Four years on: Divergent views still trail privatisation of Nigeria’s power sector<br />
Kelechi Ewuzie<br />
Power sector<br />
stakeholders<br />
have argued for<br />
and against the<br />
performance of<br />
privatisation drive as it impact<br />
on the electricity supply<br />
four years after the process<br />
was concluded.<br />
While some are of the<br />
views that there has been<br />
a marginal improvement<br />
in electricity supply, others<br />
insist it is not at the level<br />
that was promised by the<br />
champions of privatisation<br />
nor has it matched the expectations<br />
of the people.<br />
Eyo Ekpo, Executive,<br />
GE - Transportation and<br />
Former Commissioner, Nigeria<br />
Electricity Regulatory<br />
Commission (NERC) while<br />
supporting the topic insists<br />
that there is only a right way<br />
to run any sector which is<br />
privatisation.<br />
Chantelle Abdul, Chief<br />
Executive Officer, MOJEC<br />
Power and Meters opines<br />
that Nigeria power sector<br />
operators need to stop<br />
pointing fingers at each<br />
other and work together.<br />
“Privatisation is the best<br />
way to allocate resources<br />
and make any sector better”.<br />
Segun Adaju from Rural<br />
Electrification Agency of<br />
Nigeria said.<br />
Joe Ajaero, General Secretary,<br />
National Union of<br />
Electricity Employees and<br />
National President, United<br />
Labour Congress in opposing<br />
the topic said the whole<br />
concept of privatisation is an<br />
ideology the country cannot<br />
generate power ideologically.<br />
Ajaero observed that privatisation<br />
wasn’t transparent<br />
when it was implemented<br />
saying that it is a post<br />
industrialisation concept.<br />
According to him, “Power<br />
generation does not respond<br />
to market dynamics,<br />
how you can sell a commodity<br />
that isn’t available”.<br />
He wonders why Nigeria<br />
as a country who rushed<br />
into privatisation today is<br />
trying to switch to nationalisation.<br />
Sam Amadi, former<br />
Chairman/CEO Nigeria<br />
Electricity Regulatory Commission<br />
while also opposing<br />
the theme privatisation is<br />
the right answer for Nigeria’s<br />
power sector problems.<br />
Amadi, reiterated Ajaero<br />
views that privatisation<br />
when it’s an ideological<br />
framework about how the<br />
sector should be managed<br />
is difficult to do and rarely<br />
done well.<br />
To him, “It’s not a question<br />
of whether we have a<br />
choice; we don’t! We must<br />
go to our private sector<br />
and get them to spend the<br />
money we need for our infrastructure”,<br />
he said.<br />
He further said the assumption<br />
of privatisation<br />
was that it will do the right<br />
thing because if you don’t<br />
have good corporate governance<br />
over the private sector<br />
it will still fail.<br />
“The bulk trader is there<br />
to create worthiness, but the<br />
entities cannot even trade<br />
among themselves. Reform<br />
is not only about privatisation,<br />
privatisation is only<br />
a part of the power sector<br />
reform”, he said.<br />
Stakeholders say value creation in Oil/gas<br />
sector would drive economic competiveness<br />
Kelechi Ewuzie<br />
Any plan by the Federal<br />
Government to<br />
fulfill the mandate of<br />
being among the top<br />
20 economies of the world by<br />
2020 would only materialise<br />
when the oil and gas industry<br />
is transformed from being just<br />
a key source of fiscal revenue<br />
for government to becoming<br />
a source of value creation and<br />
prosperity to energise the local<br />
economy. Operators in the<br />
industry have said.<br />
They observed that while<br />
other global players in the oil<br />
and gas industry reposition<br />
themselves in the emerging<br />
new energy landscape,<br />
Nigeria inevitably must restrategise<br />
her ways to remain<br />
a global player and not lag behind<br />
in the new dispensation.<br />
Those who know in the<br />
industry opine that the oil<br />
legacy has also imposed significant<br />
costs to the national<br />
economy in Nigeria through<br />
petroleum and energy price<br />
distortions, fraudulent governance<br />
practices, institutional<br />
inefficiencies, and fiscal instability<br />
and irresponsibility.<br />
According to them, “The<br />
expansion of the oil and gas<br />
industry in Nigeria since the<br />
<strong>19</strong>70s has produced fundamental<br />
changes in the<br />
structural configuration and<br />
fiscal architecture of the Federation”.<br />
They noted that Nigeria<br />
has transformed from a diversified<br />
agro-based economy,<br />
which it was in the sixties,<br />
to the rent seeking and rent<br />
sharing mono economy that<br />
it is today.<br />
Emmanuel Egbogah,<br />
Chairman, Emerald Energy<br />
Resources, Lagos Nigeria<br />
observed that low oil prices<br />
have led to dwindling external<br />
reserves for Nigeria because<br />
of its huge dependence on<br />
oil revenue. Coincidentally,<br />
the drop in external foreign<br />
reserves has had a direct<br />
impact on exchange rates<br />
with the weakening of its local<br />
currency as against the<br />
petrodollar and a surging<br />
inflation rate.<br />
Egbogah while speaking<br />
at an energy forum in Lagos<br />
recently said it is evident the<br />
current security challenges<br />
within the context of undeniable<br />
and abysmal energy<br />
consumption and utilisation<br />
in Nigeria have led to dwindling<br />
government revenue<br />
and subsequently, a devastating<br />
low economic prosperity.<br />
This he believes makes the<br />
transformation of the oil and<br />
gas industry in Nigeria within<br />
the context of the global oil<br />
and gas market dynamics,<br />
inevitable.<br />
According to him, “Continual<br />
investments, economic<br />
and policy incentives were<br />
instituted by the Federal Government<br />
to increase Nigeria’s<br />
proved oil reserves to 40.0<br />
billion barrels and expand<br />
production capacity to 4.0<br />
million barrels per day by<br />
2010 from its then 2.5 million<br />
barrels per day”.<br />
“This goal by government<br />
is yet to be achieved due to<br />
insurgency and insecurity<br />
in the Niger Delta, declining<br />
crude oil price trends and<br />
ineffective governance of the<br />
industry”<br />
Quoting a World Bank<br />
Index report while delivering<br />
a key note address on the<br />
topic Transforming the Oil<br />
and Gas Industry in Nigeria<br />
to meet emerging global<br />
energy market landscape at<br />
NAPE <strong>2017</strong> Pre-Conference<br />
Workshop, Emmanuel Egbogah<br />
said, “Value creation<br />
and addition could have bolstered<br />
the economy thereby<br />
mitigating the low domestic<br />
gas utilisation rate of about<br />
12% in 2015”<br />
“Poor average refining<br />
capacity of about 15% in the<br />
last 5 years and abysmal per<br />
capita electricity consumption<br />
at 145 kWh as against<br />
world average of about 3,126<br />
kWh and Sub-Sahara Africa<br />
(SSA) average of about 480<br />
k W h”.<br />
Ken Abazie, Chairman of<br />
the Petroleum Downstream<br />
Group of the Lagos Chamber<br />
of Commerce and Industry<br />
observes that proceeds from<br />
the crude oil sales contributes<br />
in the neighbourhood of<br />
about 88 percent of the total<br />
revenue accruable to the Federal<br />
government of Nigeria.<br />
Nepal Oil gives back to hospitals,<br />
communities in Abia State<br />
Olusola Bello<br />
As part of its community<br />
and philanthropic<br />
efforts,<br />
Nepal Oil & Gas<br />
Services Limited, an indigenous<br />
midstream and downstream<br />
oil and gas companies,<br />
on Saturday, <strong>Dec</strong>ember<br />
2, <strong>2017</strong>, embarked on a<br />
medical assistance drive in<br />
the towns of Umuahia and<br />
Aba in Abia State.<br />
The purpose of the initiative,<br />
tagged ‘back-to-theroots’,<br />
was to give back to<br />
communities in Abia state,<br />
where Ngozi Ekeoma, the<br />
managing director, Nepal<br />
Oil & Gas, was born and<br />
brought up, whilst putting<br />
smiles on the faces of people<br />
ahead of the yuletide season.<br />
The charity drive initiative<br />
kicked off with medical<br />
relief donations at the<br />
Federal Medical Center,<br />
Umuahia and Ensign Private<br />
Hospital, Aba. A total<br />
of 30 wheelchairs and 15<br />
crutches were donated to<br />
the hospitals and patients<br />
in the Accident Emergency<br />
Ward, Children Emergency<br />
Ward, Orthopedic Ward, Female<br />
and Male Wards. Most<br />
of those who are recipients<br />
of the medical aids have<br />
been hospitalized beyond<br />
their discharged date, due<br />
to their inability to procure<br />
the necessary medical aids<br />
to continue their recovery at<br />
homes. The donations now<br />
put them in a position to<br />
properly heal both psychologically<br />
and emotionally.<br />
The team thereafter, left<br />
the town in search of one<br />
Happiness Nwachukwu,<br />
a young lady, the doctors<br />
said, is urgently in need<br />
of a new wheelchair. They<br />
located Miss Nwachukwu<br />
at Ayaba Umueze community<br />
in Aba, where they replaced<br />
her dilapidated and<br />
out-of-order wheelchair,<br />
she had used for years.<br />
An incredibly surprised<br />
Happiness was emotional<br />
as she received a gift that<br />
would change the way she<br />
celebrates this year’s yuletide<br />
holidays.<br />
In addition to this, the<br />
Nepal Oil team also indicated<br />
interest to work out concessionary<br />
measures with<br />
the hospital management to<br />
defray the medical bills of up<br />
to 10 indigent patients, who<br />
for reason of their financial<br />
state, could not afford to<br />
pay for their medical care<br />
and consequently could not<br />
leave the hospital facilities<br />
for their homes. Some of<br />
these patients have stayed<br />
in the hospital for 1, 3, 5 even<br />
up to 8 months.<br />
Commenting on the<br />
charity drive initiative, the<br />
Company Secretary/Legal<br />
Adviser, Nepal Oil & Gas,<br />
Mr. Umanta Ude Umanta<br />
stated, “At Nepal Oil & Gas,<br />
we have a management<br />
team that has continually<br />
invested in people-building<br />
and philanthropy. Our<br />
Corporate Social Responsibility<br />
(CSR) is most of the<br />
times charity-driven. We<br />
are always on the lookout<br />
for people who are in need<br />
to provide relevant and<br />
sustainable assistance to<br />
them. This charity drive is<br />
one of the numerous ways<br />
we are giving back to the<br />
communities/society.<br />
“Earlier this year, Nepal<br />
Oil & Gas donated relief materials<br />
worth over 10 million<br />
Naira to victims of the tragic<br />
Benue flood disaster. This<br />
Yuletide season, residents<br />
of Aba and Umuahia have<br />
been strategically chosen<br />
for this year’s charity drive,<br />
a way of giving back to the<br />
community that raised our<br />
Managing Director, Mrs.<br />
Ngozi Ekeoma and connecting<br />
her back to her roots. The<br />
choice of hosting the charity<br />
funfair at Hospital Road Primary<br />
school, Aba was also<br />
strategic, as that was where<br />
Nepal Oil’s Managing Director<br />
received her first formal<br />
(elementary) education.”<br />
Olusola Bello, Team lead, Analysts: Kelechi Ewuzie, Isaac Anyaogu, Graphics: Fifen Famous. Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378; +234-8036534708
Change language