Business

FG re-ignites politics of oil in North close to another election

Published

2 years ago

November 22, 2022

With 95 days to the 2023 general elections, President Muhammadu Buhari, who doubles as the Minister of Petroleum Resources, is today returning with key members of his cabinet to Gongola Basin, bordering Bauchi and Gombe states to search for crude oil in a development that pits the politics of oil against the economics of hydrocarbon. He had done a similar thing close to the 2019 general elections.

Industry watchers believe that the development, if pegged on timing, transparency, accountability and global practices, show that President Buhari and the Nigerian National Petroleum Company (NNPC) Limited will need to come clean, as most explorationists and geologists insist the development is buried in secrecy and against global practices.

Stakeholders who spoke to The Guardian noted that diversifying the country’s hydrocarbon sources, increasing existing reserves and boosting daily production remain sacrosanct even as the future of hydrocarbons faces pressure from climate change with a fast depleting funding options.

Coming as confusion persists over a one billion barrel crude oil initially said to be discovered in Kolmani well, some experts specifically noted that the return of President Buhari to the location was unnecessary, adding that a ground-breaking of a drilling activity, which would mark the second in the location should not require the presence of the President and his cabinet members.

This discovery and exploration of crude oil up North will be the first after an attempt in the Lake Chad, Borno region was aborted by insecurity.

Recall that in 2016, NNPC launched a search for oil in some Northern states. The search led to the discovery of oil in commercial quantities in Bauchi, Gombe, Borno and Niger states.

In February 2019, President Buhari, flanked by the former and late Group Managing Director of NNPC, Maikanti Baru, flagged off the Spud-In of Kolmani River 11 Well, where it was later announced about a year after that one billion barrels of crude oil was discovered.

Today’s return would mark the official groundbreaking ceremony of the Kolmani Oil Prospecting Licenses (OPLs) 809 and 810 at the Kolmani field site. The oil field is to be developed by an Indian oil firm, Sterling Global Oil, New Nigeria Development Company (NNDC), which belongs to the 19 Northern states and NNPC.

While oil majors had ventured into the basins without success, activities came on stream across basins in the Northeast, especially Lake Chad and Gongola basin as soon as President Buhari returned for a second term in office but met with criticisms by stakeholders and civil society organisations.

The criticisms were not primarily against prospecting for crude oil but timing, political undertones, secrecy and the general handling of the plan.

Divergent opinions have trailed the search for hydrocarbon in the inland basins, with one of the primary worry being that, the Buhari-led administration is only focusing on exploring the basins, which are within Northern corridor as efforts have been within Chad basin and Gongola basin despite the insecurity at the detriment of others like Anambra basin and Benue Trough (which is segmented into Upper, Middle and Lower parts).

Another concern was that the process is clouded in secrecy under an NNPC, which had pledged to be transparent and accountable, and currently partnering the Extractive Industries Transparency Initiative (EITI) to publish its spending on such activities.

Also, for most explorationists, the practices ought to be science-based, where results of findings are open and tested for global acceptability and further research, but NNPC’s Frontier Exploration Services (FES) have not been able to explain to geologists and researchers the breakthrough that led to its one billion crude oil discovery.

“Can someone discover a cure for HIV and hide the discovery? The person will be everywhere talking to researchers in the medical field. FES has not been able to explain to all of us who have been practicing in the industry for decades,” a source, who pleaded to remain anonymous, told The Guardian.

The source noted that while exploring for oil should be encouraged across all the inland basins, the current development has been politicised and compromised.

“What does the ground-breaking ceremony mean? What exactly is the activity going on there? Why does it require a whole President to do that? They have already told us that they have over a billion barrels discovered, which means they have appraised. Now they want to develop wells to bring it out.

“I do not think the President must be there since he had done the same ground-breaking of the first well in 2019. What should possibly take a whole President there again is when they want to build a refinery, gas processing plant or plant for oil and gas they discovered. This is political and possibly because of the election” the source said.

Respected energy expert, Henry Adigun noted that he had seen documents that supported that oil and gas exists in the basin but he was unsure of the commercial viability of the oil find.

Adigun noted however that a discovery of one billion barrels in the Gongola basin is more political than real, adding that he did not believe such volume of oil discovery in the region.

Insisting that the exploration may not be coming at the right time given the state of the oil market, Adigun stated that NNPC may need to become more transparent around the activities in the inland basins.

“There is oil there, that is what I can tell you. It may not be in commercial quantity but there is oil there. But looking at the oil market now, is it the best for us, may be no. The key thing is that the survey shows potential.

“Again, there must be clarity. There must be transparency on the why and what is going on there because now, NNPC is using government funds, which belong to the Nigerian state,” Adigun said.

Energy finance expert, Dan Kunle, noted that the move remained a good and long overdue development for the country, especially in strategically diversifying hydrocarbon base.

He noted that the inland basins should be explored for commercial reservoirs that would enable the country to not only have sweet crude but other blend of crude.

“We need strategic balance. The sweet crude has spoiled. If we find enough commercial oil and gas, we will plan what to do with it,” Kunle said.

According to him, the political decision being taken if it eventually leads to commercial discovery would be backed by calculated economic decisions.

Energy lawyer and former management staff at Shell, Ameh Madaki, said the secrecy surrounding the exploration and discovery of crude oil is something to worry about.

According to him, the development further heightens the concerns about opaqueness of the operations of NNPC.

“No serious minded oil and gas industry player believes in the viability of OPL 809 and 810, and in a post-Petroleum Industry Act (PIA) era, it is disheartening that the first commercial find by NNPC is a “quota system” discovery, to justify the frittering of NNPC profits on unviable frontier fields.

“It is obvious that it will take a long time for NNPC and the Oil and Gas industry in Nigeria to be run on commercial terms. Geopolitics will continue to play a critical role, thereby making the passage of the PIA an exercise in futility,” Madaki stated.

Although the PIA created a fund where 30 per cent of NNPC profit is now going into frontier exploration, the over 40-year of spending, projected by some stakeholders to stand at above $3 billion has been kept away from the public.

Former President, Movement for the Survival of the Ogoni People (MOSOP), Ledum Mitee, said the so-called frontier oil funding negates all business and ethical principles.

“Spending in searching for oil should be a risk by the oil company and not the government. Why wouldn’t the government also spend money to search for gold, for instance, in the Niger Delta region? The opaque nature of the spending for oil and gas in the North over these years speaks to its corrupt foundation,” he stated.

Partner at Nextier Group, Dr Ndu Nwokolo, said although the PIA led to the unbundling of NNPC, the change remained in name and a little in strategy and implementation.

“First, most of the core personnel are still there, and as it is said old habits die hard. It would be extremely difficult for NNPC to overnight change from its usual nature of not being open and overnight transform into a business that makes all its dealings open.

“There is a political economic angle to it. Is the government really willing to have a business cooperation that it has little control over, that is devoid of prebendalism and patrimonialism? Is the state ready to have a corrupt free cooperation with sound Nigerians who are dedicated to building an oil cooperation similar to what we have in other oil producing countries like us,” he noted.

Managing Partner, The Chancery Associates, Emeka Okwuosa, said the country has nothing to show for the years of exploration activities in the north.

At a time that the country is heavily indebted and struggling to survive, he expressed worries over what he described as a waste of the country’s scarce resource.

“Honestly, we need to prioritise on servicing existing oil infrastructure and refineries and encouraging the coming on stream of new refineries. We should discourage wasteful expenditure on unsubstantiated oil exploration. We need to be more prudent and imbibe the twin pillars of transparency and accountability. It is not by force we must discover oil in the North,” Okwuosa said.

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Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

2 months ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

2 months ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

2 months ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.