Gas
Indigenous oil companies intervention boost LPG use in Nigeria
….as stakeholders demand kerosene subsidy abolition
LAGOS – Following the low level of domestic gas consumption in Nigeria inspite of its huge reserves of over 187 tcf of gas, some indigenous oil and gas companies have taken it upon themselves to boost in-country usage of Liquefied Petroleum Gas (LPG) through a strategic intervention, even as some stakeholders in the downstream sector have continued to seek for the removal of kerosene subsidy, a commodity which currently sells over N125 a litre.
There has been aggressive deployment of Gas Stoves, Skid Plants and awareness campaigns by Oando Plc and Techno Oil Ltd, two indigenous companies as well as the government of Lagos state, south west Nigeria. These three entities amongst others have led The LPG utilization campaigns.
The initiatives by the indigenous oil and gas companies have apparently increased the utilization of LPG, otherwise known as cooking gas. According to a survey, the consumption of LPG in 2012, increased by 36.8 per cent, rising from 125,000 metric tons to 171,000 Metric tons.
In 2012, Techno Oil unveiled its `‘Going Green Revolution’’ –a platform to propagate the campaign for the change. The company launched the campaign at an elaborate ceremony at the Mainland Hotel, in Oyingbo area of Lagos with full participation of people from all walks of life. The event was a veritable forum to reach the target audience, who also happily went home with subsidized 3kg and 6kg cylinders. Tecchno Oil has also taken the campaign to other parts of Lagos metropolis and Yenogoa in Bayelsa State, even as it has been involved in strategic media campaign propagating the benefits of a shift from kerosene to Cooking gas.
Similarly, Oando Plc has invested heavily in the launching of its Gas Stove brand, using the print and electronic media to reach its target audience. The company has since launched its products in major retail outlets nationwide.
Last June, the Lagos State Government launched the “CAGEL Programme, aimed at prompting clean and sustainable environment. The programme was commissioned by the Governor of the state, Mr Babatunde Raji Fashola. The programme which has the active support of companies like Techno Oil Ltd and Oando Plc also entailed the distribution of various sizes of cylinders to participants at subsidized prices.
The increase in cooking gas usage was also made possible by the commitment to steady supply of cooking gas in the domestic market by the Nigeria Liquefied Natural Gas (NLNG) Ltd. The company recently announced an increase in the quantity of LPG to the domestic market from 150,000 to 250,000 MT.
All these are indications that there is light at the end of the tunnel for cooking gas consumption in Nigeria. It is envisaged that more interventions from the Federal Government, States and the general public will boost demand for cooking gas.
But stakeholders have advised the Federal Government to device means of providing sufficient small cylinders such as 3kg and 6kg sizes and their accessories to enable the poor and rural dwellers to use LPG. They also suggested that government should launch a scheme to increase LPG use in selected Local Government Areas and make provision for small skids for LPG storage.
According to the stakeholders, government should embark on a campaign to promote LPG usage and the gains of using the commodity.
The stakeholders argue that Nigeria on the average spends about N345b on DPK subsidy yearly and that increased LPG usage will reduce the amount. They said that increased LPG usage would also reduce the cost of subsidizing the commodity by that by extension more money would be available to various tiers of government to spend on critical infrastructure, education, health and other sectors.
Stakeholders also acknowledged the fact that one of the greatest impediments to the switch to cooking gas is the cost of gas cylinders. Gas cylinders have a life-span of 15yrs but the ability of the average Nigeria to acquire them had continued to be a challenge. To stem this challenge, the stakeholders are demanding an end to kerosene subsidy by utilizing the subsidy on liquid fuels to subsidize the acquisition of cylinders by Nigerian households.
They also suggested that the Federal Government should utilize its agencies such as the National Orientation Agency (NOA) to promote the campaign on cooking gas utilization. They pointed out that the government should replicate the CAGEL Programme of Lagos State at the federal level by coming up with laws that would make cooking gas the fuel of choice in Nigeria.
The Executive Vice-Chairman of Techno Oil Ltd, Mrs Nkechi Obi, confirmed that her company was investing massively in the campaign for the switch from kerosene and firewood to cooking gas, in a bid to promote cleaner environment needed to boost healthy living among Nigerians thereby increasing the life expectancy of the average Nigerian.
According to Obi, “for us the advocacy for the switch to the use of cooking gas, a cleaner way of cooking, has become a Corporate Social Responsibility (CSR). We regard ourselves as change agents.
“It is a disgrace that Nigeria with so much gas reserves higher than countries like Ghana and Senegal will have the lowest consumption of cooking gas. “It is our determination to sustain this advocacy as part of our CSR so as to boost inflow of tourists, Foreign Direct Investment and to raise foreign exchange earnings needed for development projects nationwide.
“We are happy that stakeholders are appreciating the humble efforts of our advocacy and the investment of Techno Oil in making cooking gas as the energy of choice in Nigeria,” she added.
Nigeria is reported to have the lowest per capita LPG consumption in Africa even as it has the capacity to produce well over 3 million metric tonnes (MT) per annum.
Announces ambitious expansion plans
Platform Petroleum says the company is targeting a billion-dollar investment as it announces an ambitious strategic plan to bring 3 marginal fields into production by 2025, with a target of 10,000 barrels of oil and at least 50 billion standard cubic feet of gas per day.
Speaking on the sidelines of the 2024 Offshore Technology Conference (OTC) in Houston, USA, Chief Dumo Lulu-Briggs, Chairman of Platform Petroleum said that the company has scheduled a roadshow in London this June 2024 to raise extra funding to finance their ambitious expansion plans.
“The upcoming roadshow aims to attract equity partners and prepare for future opportunities, targeting a billion-dollar investment. We are seeking partners ready to invest in Nigeria’s oil and gas potential.
Our goal is to showcase the country’s vast opportunities and its potential to international investors” Lulu-Briggs said.
Platform Petroleum’s roadshow in London will highlight the company’s efficient production, upgraded flow stations, increased capacity, and achievements in nearly zero emissions.
With about one percent gas flare currently, Platform aims for zero gas flares by the last quarter.
“Nigeria is a vast market, and Platform Petroleum is thinking big. With the government’s ambitious plans, such as the Lagos-Calabar coastal line, Platform is poised for growth; pushing itself to the next level, building on a strong foundation and following Seplat’s successful precedent”, Lulu-Briggs said.
Despite being a small company, he emphasized that Platform Petroleum has demonstrated significant success and efficiency, showcasing that smaller oil and gas entities can indeed achieve remarkable feats adding that he believes that the company deserves recognition and more assets.
“Platform Petroleum is ambitious, aspiring to become a tier-1 company akin to international oil companies (IOCs) or a tier-2 company like Seplat. Interestingly, Seplat originated from Maurel & Prom, Shebah Petroleum, and Platform Petroleum, and today stands as a major player in the industry.
This history underlines Platform’s potential for substantial growth”, Lulu-Briggs said.
Furthermore, the Platform Petroleum Chairman said that the Offshore Technology Conference (OTC) is a crucial event for promoting Nigeria’s significant market potential.
“Partnering with the Petroleum Technology Association of Nigeria (PETAN) at OTC is key to attracting investment. The current proactive government understands the necessity for economic growth, and Platform is prepared to leverage every opportunity in the oil and gas industry to contribute to this expansion”, he concluded.
Precious ADELOLA
The NNPC/Aiteo Joint venture has announced the introduction of Nembe Crude Oil Grade, a new crude oil grade into the international crude oil market.
The announcement of the Nembe Crude Oil Blend, produced by Aiteo, the Operator of the NNPC/Aiteo Oil Mining Lease (OML) 29 Joint Venture (JV), was made at the ongoing Argus European Crude Conference in London, on Tuesday.
OML 29, an asset located onshore Nigeria, is operated by Aiteo Eastern Exploration & Production Ltd, Africa’s leading indigenous hydrocarbon producer, following a historic acquisition from Shell in 2014.
NNPCL Boss, Engr. Mele Kyari
The Nembe Crude was previously blended with the popular Bonny Light grade and exported via the Bonny Oil & Gas Terminal.
The unique selling point of the Nembe Crude Oil grade with an API gravity was highlighted by both the Aiteo E & P and NNPC Limited Leadership at the Argus Conference in London.
The Nembe Crude Oil grade also has a low sulphur content and low carbon footprint due to flare gas elimination, fitting perfectly into the required spec of major buyers in Europe.
Two cargoes of 950,000 barrels each of the Nembe Crude Oil grade have since been exported to France and the Netherlands. With its attractive Assay of API 29 and low sulphur content, the Nembe Crude Oil grade commands a premium to the global Brent benchmark.
With the NNPC-Aiteo OML 29 JV back on-stream, Nigeria now boasts of an additional crude oil export of 2 Cargoes at 950,000 barrels each per month and 1.2 Bcf of export gas monthly.
This remarkable achievement signals the commencement of activities at Nigeria’s newest crude oil terminal, the Nembe Crude Oil Export Terminal (NCOET), which was licensed in line with the extant laws and Crude Oil Terminal establishment regulations.
The terminal was conceived as a Floating Storage and Offloading Vessel (FSO) with a storage capacity of two (2) Million Barrels and the ability to offload crude oil to any export tanker from AFRAMAX to Very Large Crude Carriers (VLCC).
It has a loading capacity of 25,000 barrels per hour and will be exporting over 3.6 million barrels of Crude oil monthly at full scale of operation.
Currently, hydrocarbon production from OML 29, which was hitherto constrained due to evacuation challenges owing to the security issues around the Nembe Creek Trunk Line (NCTL) corridor, has now been resolved through a collaborative and creative approach that led to the innovation of the Alternative Crude Oil Evacuation Solution.
The Argus European Crude Conference 2023 in London is a gathering of energy majors, refiners, NOCs, traders, financial institutions, and other representatives from across the global oil markets. The event also provides a critical opportunity for business leaders to connect, discuss, share and learn from one another.
Modupe Asudo
Major players in the oil and gas sector in Nigeria led by the Nigerian National Petroleum Company Limited (NNPCL) have covenanted to optimise operations by reducing contracting cycle to not more than 180 days.
A statement issued by the company disclosed that the Memorandum of Understanding (MoU) to this effect was endorced on Monday in Abuja at the company’s head office.
Other parties to the the contract include, the Nigerian Content Development and Monitoring Board, (NCDMB) and international oil companies.
Biztellers reports that an optimised contracting cycle was expected to improve the ease of doing business, reduce cost and drive efficiency, which would eventually translate to production growth, increased revenues, and ultimately improved profitability.
In addition, the MoU was expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate value for all stakeholders, including investors, companies, host communities and Nigeria.
Notable elements in the framework of the MoU, going by the statement, included a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively.
This was in contrast with the current best effort performance of 327, 333, and 185 working days respectively.
According to Group Chief Executive Officer, NNPCL, Mele Kyari, signing the agreement portends exciting times for Nigeria’s oil and gas industry, in addition to standing as a bold testimony that the company was plunging into the future of hope, productivity and success.
Kyari, represented at the occasion by Executive Vice President, Upstream, NNPCL, Oritsemeyiwa Eyesan, pointed out that with oil and gas as the bedrock of Nigeria’s economy, there was need to get the contracting process in the Industry right so as to get the economy back on track.
In his remarks, Executive Secretary, NCDMB, Simbi Wabote, described the MoU as a way forward and a critical step towards enhancing the nation’s crude oil production.
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