2013: Nigeria’s energy sector in retrospectives

By Adeola Yusuf

The Joint Task Force in the Niger Delta, codenamed Operation Pulo Shield, said in an end-of-the-year confession at the weekend, that in 2013 it arrested 1,857 crude oil thieves in the oil rich Niger Delta region, killed 82 sea pirates and robbers. It also lost three of its operatives in active service in 2013 to sea pirates, while three others got drowned.

With this revelation, the Year 2013 was sign-posted by issues of crude theft and several efforts to end it.

A 70-page report entitled, 'Nigeria's Criminal Crude,' by London-based Chatham House, some months ago, linked the growing incidence of crude oil theft and pipeline vandalism in Nigeria to 2015 general elections.

Proceeds from oil theft may expectedly be used to funds politics ahead the 2015 elections, the report hinted at the weekend.

It also indicted high-level politicians and military officials in what it called, “A complex criminal web that includes foreign oil traders, shippers, bankers and refiners.”

No royalties on stolen oil.
“Nigerian crude oil is being stolen on an industrial scale. Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria.

“Thieves have many ways to disguise funds … including cash smuggling, delayed deposits, use of middlemen, shell companies and tax havens, bribery of bank officials, cycling cash through legitimate businesses and cash purchases of luxury goods.”

Efforts to end menace
In the Year 2013, the government through the Vice President Namadi Sambo, penultimate Wednesday held a crucial meeting with a delegation from U.S President, Barrack Obama, to assist Nigeria in solving its oil theft menace.

The closed door meeting held at the Presidential Villa, lasted over two hours and was attended by the U.S Ambassador to Nigeria, James Entwistle.

The U.S Assistant Secretary of Defence, Sharon Burke, led the U.S. delegation, while the Minister of Petroleum Resources, Diezani Alison-Madueke, and the Group Managing Director of NNPC, Andrew Yakubu, also attended the meeting.

Entwistle, who briefed State House correspondents after the meeting, said the delegation was in Nigeria on the request made by President Goodluck Jonathan to Obama.

“A request was made to the U.S President, Barack Obama, by President Jonathan to see how the U.S can help Nigeria deal with the scourge of crude oil theft.

“Based on that request, President Obama put together this delegation and instructed it to come here and see if we can help.

“This delegation has been to Delta and Abuja for few days and met variety of government, people and citizens and oil companies.

“We are not arrogant to think that as Americans, we can just come here and solve a problem on behalf of your country.

“But, what we are trying to do in this delegation is to listen and learn so that we can understand Nigeria and this oil theft problem.

“And of course, there is international dimension to the problem and we want to make sure we completely understand Nigeria and the problem.

“We have had very good meetings including with the vice president and we have come to understand that the more you talk to people, the more you understand the problems,'' he said.

Burke spoke in the same vein that members of the delegation were drawn from the U.S Department of Energy, the White House and the Department of State and U.S Force for Africa.

“We were told to come and listen to people and understand the nature of the oil theft, revenue loss and what the problem is.

“We have had opportunity to speak with great range of people and we have had a great deal of ourselves.

“We have just met with the vice president and we will be returning home, digest the information we have got, sieve it and then report to Mr President.

“We are going back to Washington tonight, we will review our notes and discussions and then present our findings to President Obama,'' Entwistle said.

Alison-Madueke said the Federal Government sought the much needed assistant to address oil theft because of the international dimension to the scourge.

She noted that the effect of oil theft had both national and international dimensions to it.

“The U.S president as you have heard, responded to that partnership and as you can see, a high powered delegation have come to discuss and they have been able to discuss with a number of people.

“We are very hopeful that as they go back, we will continue with the discussion and come with a very salient solution to help us push back the scourge of oil theft once and for all,'' she said.

Before this, a joint multi-national sea exercise tagged “African Winds” aimed at showing readiness to flush out crude oil thieves in the Niger Delta was held at the Lagos Takwa Bay Beach.

The exercise which was jointly carried out by Spain, UK, US, Netherlands and Nigeria, was in line with the objectives of the African Partnership Station (APS) to stamp out maritime illegalities.

After the exercise, Chief of Naval Staff (CNS), Vice Admiral Dele Ezeoba, reiterated the Navy's commitment to stamping out all illegalities from the nation's maritime domain, especially in the Gulf of Guinea.

Ezeoba described the joint exercise as a milestone recorded by the participating countries in the area of strategic partnership.

He said the exercise was aimed at ensuring a secure and safe maritime space, adding that there is no one country that can handle security challenges alone.

He said “maritime security is a primary responsibility of everybody because the oceans and seas of the world are common global heritage to mankind.

“The concerted efforts at the sub-regional and multi-regional levels are to ensure that we continue to cooperate and collaborate because that is a new paradigm in terms of security imperatives.”

Ezeoba added that the exercise would further enhance their human capacity, which would enable the Navy develop technical expertise that will further create the impetus they need to enhance maritime security not just in Nigeria but in the Gulf of Guinea.

The oil theft, which is touted to be the biggest problem facing the multi-billion dollars oil and gas industry in Nigeria in recent times, pre-dates the administration of President Goodluck Jonathan, which is now deploring all efforts to end the inherited problem.

The low sides
The passage of the much awaited Petroleum Industry Bill (PIB) after five years on the shelves of the National Assembly, the execution of December 2013 gas flaring deadline and promises to renew 20-year oil leases for International Oil companies (IOCs), which expired five years ago in Nigeria are some of the unfulfilled promises in 2013.

Notwithstanding theses low times in the oil and gas sector, a major step was taken on Friday October 1, 2013, in the efforts of the Federal Government to improve electricity supply to Nigerians as four power generation firms and 10 distribution companies of the Power Holding Company of Nigeria (PHCN) were handed over to investors who had in August paid about $3 billion (N480b) for the assets.

Amidst tight security by soldiers across various formations of PHCN, the Federal Government completed the 14-year planned hand over of the power assets to the new owners.

At the handover ceremony, which took place simultaneously across the country, government threatened to sanction any new owner who defaults on the delivery of performance agreement they signed with it.

The companies that were handed over to their new owners are Ughelli Plant, Geregu I Plant, Kainji Hydro and Shiroro Hydro. The distribution companies are Ikeja, Eko, Ibadan, Jos, Kano, Yola, Abuja, Benin, Enugu and Port Harcourt.

Speaking at the ceremony to mark the handover of Abuja Distribution Company to KANN Consortium Utility, Vice President Namadi Sambo, who is also the chairman of the National Council on Privatization, noted that the day was historic as it marked the biggest divestment of public utility in Africa.

Sambo who was represented by the Minister of Power, Chinedu Nebo, assured Nigerians that the reforms being implemented in the sector by the government would increase consumers' access to electricity which will in turn stimulate economic growth.

“The participation of the private sector would bring about higher generation capacities through the provision of more efficient and cost effective power stations and improvements in electric power distribution in the areas of billing and collection, and transmission networks.

“Such capital injection and efficiency have been inadequate in PHCN over the years, resulting in gross inadequate power supply with attendant negative effects on the citizenry and the economy at large.

Today's handover marks the concluding stage of the transaction with the four generation companies and 10 distribution companies,” he said.

According to Sambo, “the challenge facing the electricity sector in Nigeria is enormous, but we are equally convinced that the opportunities in the sector are enormous. Therefore, the Federal Government is committed to creating the enabling environment for the private sector investors to take on these challenges and the opportunities therein to ensure quality and cost effective service delivery to Nigeria's electricity sector.”

Sambo warned the new owners of the public utilities that government would sanction any of them who fails to deliver on the agreement reached with it, noting that government is determined to ensure that quality electricity gets to Nigerians.

He assured all PHCN workers that government would not short change any of them, disclosing that about N360 billion have been spent on the settlement of the workers.

He noted that the remaining N30 billion needed to complete the payment was ready and that government would adhere to the agreement it reached with electricity workers' union on Thursday that paved the way for the handover.

Meanwhile, the Minister of Power, Prof. Chinedu Nebo has said the constant destruction of key gas to power infrastructure contributes to about 22 per cent of overall drops in electricity supply experienced in Nigeria's Electricity Supply Industry (NESI) especially recently.

Nebo noted that the act of sabotage against the country gas-to-power pipeline networks by unscrupulous individuals have taken a different turn with discoveries that dynamites have often been used to blow out the lines.

He gave an instance where the Western gas supply trunk line from Warri through Escravos was found to have been damaged at many points far more than it was initially imagined.

The minister told members of the House of Representatives committee on power which were led by their chairman, Hon. Patrick Ikhariale on an oversight visit to the ministry that: “Another one at the Eastern axis at Bokoloma were punctured at many points and it would take the next one month to fix.”

Stating the impacts of these acts on the nation's electricity supply system and economy at large, Nebo requested the parliamentarians to enact stiff laws to ensure that heavy penalties are meted on the saboteurs while serving as deterrence to others, insisting that such acts should not be tolerated.

“The worrisome problem associated with vandalism according informed the convocation of stakeholders' forum by the office of the National Security Adviser (NSA). This forum brought together all security agencies to tackle the menace, it was resolved that information sharing among all stakeholders is key to fighting vandalism,” Nebo added.

Last line
Hopes are high that the government and all stakeholders in the Nigeria's energy sector have learnt lessons in 2013 to improve on the New Year 2014.

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