Energy
Withdraw Licenses From Underperforming DISCOs, FG Tells NERC
In a significant move, the Federal Government has issued a directive to the Nigerian Electricity Regulatory Commission (NERC), urging the withdrawal of licenses from underperforming electricity distribution companies (DISCOs).
This development comes amid a notable 21% year-on-year decline in power generation, plunging to 3,475MW in March 2024 from 4,404MW in the corresponding period of 2023.
Challenges such as insufficient investment and a scarcity of gas supply are cited as key factors behind the decrease, raising concerns about the state of the nation’s power sector.
In a concerning trend, power generation in Nigeria experienced a month-on-month drop to 3,475MW in March 2024 from 4,043MW in February 2024, prompting several Electricity Distribution Companies (DISCOs) to implement load shedding measures.
Data from the National System Operator, a unit within the Transmission Company of Nigeria (TCN), reveals a persistently low supply, adversely affecting households and businesses nationwide.
The government has pointed fingers at the DISCOs, accusing them of insufficient efforts to enhance supply despite the availability of power on the national grid.
Minister of Power, Adebayo Adelabu, emphasized the distribution segment’s vulnerability during a meeting with agency heads in Abuja, highlighting it as the weakest link in the electricity supply value chain.
Emphasizing the urgency for improvement, Adelabu called on the Nigerian Electricity Regulatory Commission (NERC) to explore innovative measures, including imposing stringent sanctions on utilities that fail to utilize their allocations and considering the outright cancellation of licenses.
He asserted that the current franchise areas covered by Electricity Distribution Companies (DISCOs) were excessively large. He added that the government is now committed to a restructuring plan that aims to establish smaller DISCOs, with companies confined to operating in one state each.
He said “Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right, to Nigerians, we’re not doing anything. So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.
“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation, in transmission is zero.
“I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.
“Why we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis.
“Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure.”
“We are talking about issues of restructuring the DISCOs along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.
“I’ve said it before now that non performance of DISCOs in terms of epileptic power supply qualifies as a basis for revocation of license. Any DISCO that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector”.
Highlighting a crucial criterion, Minister of Adelabu, stressed that any Electricity Distribution Company (DISCO) willfully refusing available power is a valid reason for license revocation.
He emphasized that DISCOs should be prepared to uptake 90-99 percent of the allocated load.
Addressing the ongoing unacceptable electricity rationing nationwide, Adelabu revealed the government’s ambitious plan to boost power generation from the current 4,000MW to 6,000MW within the next six months.
He said “So what we are looking at is to have an agreement to ramp up to a minimum of 6,000 megawatts within the next three to six months. I know that the highest we ever generated was 5,700, about three years ago. That was specifically November, 2021.
“And this 5,700 was also distributed. If we could achieve 5,700 at that time, I believe we still have infrastructure to generate between 6,000 and 6,500. In terms of the generating companies, I have no doubt in my mind that the existing capacity can give us 6,500 once there is stability in supply of gas.
“I’ve been to a number of the generating companies and I confirmed that they have this installed capacity. And a large percentage of this installed capacity is operational, but they are not available because of low or shortage in gas supply.
“Once there is gas supply, we want to ramp up generation to a minimum 6,000MW”.
He noted that while the Federal Government would continue to pay electricity subsidies in the short-term, it plans to gradually phase it out in the next three years and return the sector to a commercially driven tariff.
In a statement to the press following the meeting, Engr. Sule Abdulaziz, the Managing Director of the Transmission Company of Nigeria, clarified that the fire at its Kano substation occurred during efforts to address a leakage from one of its transformers.
The incident unfolded as the company’s engineers were engaged in the repair process.
Keen on optimising production from the nation’s hydrocarbon assets to boost revenues and meet her OPEC production quota, the Nigerian National Petroleum Company Limited (NNPC Ltd.) and its Joint Venture partner in the Awoba Unit Field, Newcross Exploration and Production Ltd., have restarted production from the Awoba field which last contributed production to the Bonny Terminal in 2021 and was finally shut down in February 2022 due to evacuation issues and crude oil theft.
This was contained in a statement put out on the state oil company’s X handle on Tuesday from Abuja, under the signature of its Chief Corporate Communications Officer, Olufemi O. Soneye.
He asserted that since the restart of the Awoba field by NNPC Ltd and it partners on April 13, 2024; production from the field has averaged 8,000 barrels per day and is expected to plateau at 12,000 per day at full ramp up within 30 days.
Awoba is also expected to significantly boost gas supply to the power sector and other gas-based industries, Soneye added.
Biztellers reports that the Awoba Unit which straddles OMLs 18 and 24 is located in the mangrove swamp south of Port Harcourt, Rivers State. Both OML 18 and OML 24 assets are under the management of the NNPC Upstream Investment Management Services (NUIMS).
Recall that the NNPC Ltd. has been recording a string of production successes from the JV portfolio which have significantly lifted overall national production. Besides the recent start of production at the Madu Field by the NNPC Ltd/First E&P JV, the company has achieved the restart of production at OMLs 29 and OML 18 in late 2023 which have steadily contributed an average of 60,000bpd to the nation’s production output since their restart.
The Group Chief Executive Officer of NNPC Ltd., Mallam Mele Kyari, ascribed the achievement to the President Bola Ahmed Tinubu administration’s success in providing enabling operating environment for businesses to thrive.
He expressed appreciation to all stakeholders (staff, operators, host communities, government security agencies, and private security contractors) who played a pivotal role in achieving the feat.
The Nigerian National Petroleum Company Limited (NNPC Ltd) and its Joint Venture partner in OML 85, First Exploration and Petroleum Development Company Limited (First E&P), have commenced oil production from the asset also known as Madu Field.
Biztellers reports that production from the field which is located in shallow waters offshore Bayelsa State and operated by First E&P is expected to be at an average of 20,000 barrels per day.
The achievement is a testament to the commitment of the President Bola Tinubu administration to optimise production from the nation’s oil and gas assets through the provision of enabling environment for existing and prospective investors.
According to the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, the commencement of oil production at the Madu Field is a significant milestone that will contribute to the larger goal of meeting the production required to drive revenue growth and boost the nation’s economy.
He commended stakeholders for their support, and opined that the addition of 20,000 barrels per day by an indigenous oil player signals the commitment of stakeholders to achieving economic development for Nigeria.
Recall that the Final Investment Decision (FID) on the development of the Madu Field and a sister field, Anyala, was taken by the NNPC Ltd/First E&P JV in 2018.
Production from the Madu Field will be processed at the JV’s Abigail-Joseph Floating Production Storage and Offloading (FPSO) Unit, which has a crude oil storage capacity of up to 800,000bbls.
Chevron Nigeria Limited (CNL) has denounced stories being peddled around that it is recruiting.
General Manager, Policy, Government & Public Affairs, CNL, E. O. Brikinn, denounced the stories in a statement made available to Biztellers, in which he cautioned that the company will not respond to enquiries about “fraudulent advertisements and job offers”.
It reads, “Chevron Nigeria Limited (“CNL”), operator of the Nigerian National Petroleum Company Limited (“NNPCL”) and CNL Joint Venture, is aware of the circulation of false recruitment information in some media and online channels in the name of CNL and Chevron Corporation, purportedly advertising job positions in CNL.
“Additionally, fraudulent job offers have reportedly been sent through emails, text messages and phone calls by individuals purporting to be staff or representatives of CNL and Chevron Corporation.
“Members of the public are hereby notified that CNL does not solicit job applications or initiate recruitment processes through emails, posters, handbills, text messages, social media, or phone calls.
“Job seekers are advised to always check the company’s website at: http:/www.careers.chevron.com, and the national newspapers for job advertisements from CNL.
“CNL does not and will not require applicants to make any payment towards processing any job application. Job offers requesting candidates to pay money, at any point during the recruitment process, are not from CNL. CNL advises that anyone who receives these fraudulent communications should report them to the appropriate law enforcement agencies.
“CNL hereby dissociates itself from all false job adverts and offers published in any online media platform, web site, email, poster, handbill or any other medium.
“CNL will not respond to enquiries about fraudulent advertisements and job offers.”
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