Mohammed Shosanya

Energy industry leaders and experts will converge in Lagos on October 3, 2024, at the Association of Energy Correspondents of Nigeria (NAEC) Annual International Energy Conference
2024.

The organiser disclosed that the conference will focus on the role of natural gas as an energy transition fuel, addressing Nigeria’s Trilemma of Finance, Energy Security, and International Politics.

The National Chairman of NAEC, Ugo Amadi, in a statement signed and released to the media on Monday stated that the captivating lineup of activities for the association’s 2024 conference, promises to tackle Nigeria’s most pressing energy challenges head-on.

Amadi said the conference’s main theme, “Gas as Energy Transition Fuel: Navigating Nigeria’s Trilemma of Finance, Energy Security, and International Politics,” was carefully curated to address the critical national discourse and provide strategic solutions to guarantee Nigeria’s energy security and sustainable future.

He said, “The conference will feature a dedicated session on “Actualizing the Decade of Gas: Powering Nigeria’s Energy Sufficiency, Industrialization, and Economic Prosperity,” and other sessions that will talk about the pivotal role of natural gas in driving Nigeria’s energy sufficiency, industrialization, and overall economic prosperity.

The NAEC Chairman further emphasised that the third session of the conference with the topic: “Solving the Gas-To-Power Debacle: Unlocking Investments For NESI, Analysing Tariff Adjustment, Frequent Grid Collapses, and 6,100 MW target by December for Sustainable Growth

He noted that the session promises to tackle the longstanding challenges in the gas-to-power sector, unlocking investments, addressing tariff adjustments, and achieving the ambitious 6,100 MW target for sustainable growth.

Amadi emphasized that the 2024 Conference, marking the inaugural edition under his new leadership of NAEC, would serve as a pivotal platform for influential figures to exchange insights, knowledge, and peer-reviewed analyses concerning the opportunities and challenges confronting the diminishing investments in Nigeria’s energy sector.

Adeola Yusuf, Chairman of the NAEC 2024 Conference Committee, in his remark revealed that the upcoming conference promises to be a game-changer for the Nigerian energy industry.

According to Yusuf, the conference would bring together a diverse array of players, including ministers, CEOs, industry captains, regulators, lawmakers, and other key stakeholders, adding that with the participation of industry leaders and experts, the event promises to deliver actionable insights and innovative strategies to propel the sector forward.

He added the conference would be a catalyst for unlocking investments, enhancing energy security, and driving sustainable development in Nigeria’s energy landscape.

The Chairman of the NAEC 2024 Conference Committee emphasised that the highly anticipated details of the keynote speakers and major sponsors for this groundbreaking event will be released in a subsequent statement to be released for publication in all major newspapers, television, and radio stations in Nigeria.

Mohammed Shosanya

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday flagged off due diligence workshop to discuss and work together on the proposed divestment of the participating interests held by the Shell Petroleum Development Company of Nigerian Limited (SPDC) in the SPDC JV Assets, through a sale by its shareholders of all the issued shares of SPDC to Renaissance Africa Energy Company Limited (Renaissance).

Engr. Gbenga Komolafe, the Commission Chief Executive (CCE), explained that the goal of the workshop is to identify a successor who not only possesses the requisite financial resources but also demonstrates the technical expertise to responsibly manage these assets throughout their lifecycle.

“This makes a significant contribution to the nation’s hydrocarbon resources. Additionally, these assets hold P3 reserves estimated at 2.85 billion barrels of oil, 850.85 million barrels of condensate, 11.3 trillion cubic feet of associated gas and 12.26 trillion cubic feet of Non-Associated Gas.

“Furthermore, we must ensure that the inherent environmental and end-of-life liabilities i.e. decommissioning liabilities, are accurately identified, and assigned to the party best equipped to bear the associated risks.

“This necessitates a comprehensive understanding of regulatory requirements, industry best practices, and the unique challenges inherent in oil and gas operations”.

He further explained that the SPDC JV assets are currently operated by the SPDC on behalf of its Joint Venture (JV) partners namely NNPCL Limited and Total Upstream Nigeria Limited, Nigeria Agip Oil Company and SPDC.

The SPDC JV OMLs were originally awarded as Oil Exploration Licence -1(OEL-1) on 1 January 1949 covering the whole of southern Nigeria and Cameroon,he said.

He also said: “Ultimately, the assets were converted to OMLs on 1 April 1962 and subsequently renewed in 2014 and 2018 for 20 years. To date, the assets have achieved a cumulative production of 5.35 billion barrels of crude oil, 165. 57 million barrels of condensate, 9.51 trillion cubic feet of Associated Gas and 3.75 trillion cubic feet of Non-Associated Gas,contributing immensely to the achievement of Nigeria’s crude and condensate output.

“Permit me to emphasize that the NUPRC is committed to free entry, free exit business principle aimed at encouraging investors in the sector. We understand the importance of providing a stable regulatory framework that instils confidence and encourages investment.

“To this end, we have implemented robust measures to streamline regulatory procedures and eliminate unnecessary barriers to investment.

“Accordingly, the Commission has developed a Divestment Framework consisting of seven cardinal pillars to guide the assessment of applications for Ministerial consent to the SPDC Divestment and other similar divestments”.

Speaking,Wessel de Haas,the General Manager SPDC Assets and Deputy Managing Director, the Shell Petroleum Development Company of Nigeria Limited, expressed hope that the workshop would provide necessary clarifications for the divestments.

Mohammed Shosanya

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC),says it raked in N4.34tn last year.

Gbenga Komolafe, the Chief Executive, NUPRC, who said this at the first edition of the NEITI House Dialogue organised by the Nigerian Extractive Industries Transparency Initiative,also announced the commencement of the 2024 oil bid rounds in accordance with the provisions of the Petroleum Industry Act.

He explained that the oil licensing rounds were designed to enhance quality data set and would be conducted in a fair, transparent and competitive bidding process in a non-discriminatory manner as stipulated on Sections 3 and 74 of the PIA.

He said:”It is my pleasure to announce to you that the 2024 licensing round as prescribed in the Petroleum Industry Act will commence from the end of this month and we will be going offshore to market it as part of our job.

“Our job equally entails marketing of the nation’s hydrocarbon resources to prospective investors. So we are going to do that, and the process has commenced. We’ve set very clear criteria to guide the implementation of the process from the beginning to the end transparently”.

On the amount which the country would earn from the bid rounds, Komolafe replied, “The assets that are being put on offer are mostly greenfield assets, so they are virgin assets and so to accurately quantify the amount to be generated might be difficult since they are greenfield assets.”

He, however, stated that the nation would earn billions of dollars from the assets in terms of royalties, taxies and other levies to be generated from the bid round.

Speaking on the 2024 bid process, Komolafe said, “We are currently putting on offer 12 blocks. But remember that we commenced a bid process in 2022 where we put 17 offshore assets on offer but as the date grew close to the last election we had to put a hold on it.

“However, right now we are completing that process and we are equally having 12 new bid rounds. So in totality we target to complete the 17 blocks and the ones on offer between now and early next year.”

On dormant oil blocks that were awarded to investors in the past bid rounds, Komolafe stated that the commission would revoke the awards and had commenced a review of these idle blocks.

“Currently the commission is making a comprehensive review of all the awarded assets. We are carrying out a review of all awarded assets to look at the ones that are under-performing. These assets are the ones that were not brought into maturation.

“They are idle and do not add value to the nation. So what we’ve done in that respect is that we’ve invoked the provisions of the Petroleum Industry Act to bring these assets into the basket and let then go through the competitive bid process as provided under Sections 73 and 74 of the PIA.

“Recall that the PIA has outlawed discretionary award of assets and so the award of assets now go through a fair, competitive and transparent process,” he stated.

Meanwhile, he said the NUPRC grew its revenue from N2tn in 2020 to N2.9tn in 2021. This rose to N3.78tn in 2022 and climbed further to N4.34tn in 2024.

“In the last three years, you could see the growth of the revenue generation profile of the commission. The commission has been meeting and surpassing its revenue targets and that speaks to its transparent approach in revenue reporting,” Komolafe stated.

The Executive Secretary, NEITI, Ogbonnaya Orji, the NEITI House Dialogue is a quarterly briefing of NEITI stakeholders that would take place at the NEITI House in Wuye, Abuja.

“NHD will host notable policy makers in Nigeria’s extractive industries and related sectors, who will address issues that are of interest and topical to the industry.

“The NHD will also get the invited policy maker to provide update or status report on the implementation of NEITI report recommendations as it concerns the agency. This is with a view to deepen not just government oversight and reforms in the extractive sector, but make it inclusive of all stakeholders,” he stated.

Mohammed Shosanya

The Nigerian Content Development and Monitoring Board (NCDMB),has received an interim dividend payment of N450 million out of the 1.5bn declared by the Waltersmith Refinery and Petrochemical Company Limited.

This payment represents NCDMB’s 30% share in the company for the year ended 2023,a statement said on Monday.

Rising from a Board Meeting of Waltersmith Refinery and Petrochemical Company Limited, the Executive Secretary NCDMB, Engr. Felix Omotsola Ogbe confirmed that a total dividend of N4.5bn had been approved for the year 2023, pending final approval at the Annual General Meeting (AGM). The company reported a total profit of N23.6bn as profit after tax for the same year.

He hinted that NCDMB expects to receive additional 30% of the outstanding N3bn dividend after the AGM is convened later this year.

He added that the receipt of this interim dividend payment is a testament to the strong performance and profitability of Waltersmith Refinery and Petrochemical Company Limited.

“The NCDMB is proud to be a part of this success and looks forward to continued collaboration with the company in the future,” he stated.

According to him,the company is upscaling the refinery capacity from 5000 bpd to 10,000bpd and the expansion project is 44% completed and on time to be commissioned by early 2025.

NCDMB’s investment in the Waltersmith project was also geared to catalyse the industrialisation of the Nigerian oil and gas industry and its linkage sectors and deepen Nigerian Content in the oil and gas industry. It was the first third-party investment embarked by the Board, and it provided proof of concept and paved the way for other successful investments by the Board.

Penultimate week,NCDMB received a cheque of $1 million from Nedogas Development Company Limited (NDCL), being part of the return on investment (ROI) on one of the Board’s strategic investments.

The cheque was presented by the Chairman of the company, Engr. Emeka Ene when he visited the Nigerian Content Tower in Yenagoa Bayelsa State, where he was received by the Executive Secretary, Engr. Felix Omatsola Ogbe and other members of the Board’s management.

Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company and it culminated in the construction and commissioning of a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.

Mohammed Shosanya

Wale Ajibade, Executive Director, Sahara Group has said,that inadequate refining capacity, insufficient storage, and impeded product movement across Africa are the three major impediments slowing the growth of the continent’s downstream oil sector.

In a paper, “Africa Downstream Market Developments and Forecast”,presented at the recently concluded Africa Refiners and Distributors Association (ARDA) Week 2024 in Cape Town, South Africa,Ajibade said addressing these gaps would transform Africa’s downstream petroleum industry.

He noted that shoring up the continent’s refining capacity was critical to sustaining efficiency, availability and accessibility in the sector. He explained that as Africa explores ways of achieving hitch-free energy transition, efforts must be made to ensure optimisation of the sector’s value responsibly and collaboratively.

“Many African countries lack sufficient refining capacity to meet domestic demand, leading to heavy reliance on imports. This lack of self-sufficiency leaves these markets vulnerable to supply disruptions. Addressing this would require fresh investments and collaboration across the sector’s value chain,” he said.

On insufficient storage infrastructure, Ajibade said this has continued to hamper the ability to maintain strategic reserves and ensure reliable supply during times of high demand or supply chain disruptions.

“In East Africa, shippers at Beira, Dar es Salaam and Mombasa — the key entry ports for refined products — are experiencing significant demurrage. Ageing and poorly maintained pipeline networks result in significant product losses and distribution bottlenecks,” he stated.

According to him, a collaborative solution which involves regulators, operators, investors, financial institutions, and government owned oil companies is required to help the African downstream sector to reach its full potential and provide reliable and affordable energy access to the continent’s growing population.

“Africa’s downstream Market leaders will need to work closely with her the various governments and agencies to carefully navigate the complex challenges through regulation and technology adoption while pushing fo sustainable growth across Africa,” he said.

He further stated that the continent increasingly relies on imports of refined products to support consumption growth, primarily due to the underutilisation of existing refineries caused by technical issues.

“Investments in refinery upgrades, pipeline modernisation, and the construction of new storage facilities will be crucial to overcoming these challenges and unlocking the region’s energy security and economic development,” he added.

Highlighting some positive trends in the sector, Ajibade said the African downstream market is experiencing rapid growth and transformation, driven by soaring energy demand, population growth, and the focus on industrialisation, urbanisation, and economic He explained that these would drive the demand for refined petroleum products, petrochemicals, and related downstream services is forecasted to grow by up to 30% by 2040.

“Africa is experiencing a lot of migration from rural to urban areas. In 2015, Africa had only six cities with more than five residents compared to 17 expected in 2030. Africa has experienced an increase in the number and capacity of industries across the continent, with industrial GDP set to double by 2025,” he said.

On the promotion of regional and cross-border trade, Ajibade noted that initiatives such as the African Continental Free Trade Area are promoting regional integration and facilitating cross-border trade in downstream products.

“This is encouraging investments in integrated downstream assets, logistical infrastructure, and harmonised regulatory frameworks to capitalise on the expanded market opportunities,” concluding that production of chemicals, plastics, lubricants, and specialty products would foster self-sufficiency and spur economic growth though increased job creation, reduced import reliance and enhanced technological innovation.”