President of the Nigerian Association for Energy Economics (NAEE), Prof. Wumi Iledare (left), congratulating the representative of NNPC GMD and NNPC Chief Operating Officer, Ventures, Dr. Victor Babatunde Adeniran (right), after delivering the opening address at the12th Annual International Conference of the Nigerian Association for Energy Economics/International Association for Energy Economics (NAEE/IAEE) in Abuja.
By Felix Douglas
Taking a look at Nigeria’s present situation shows the country is in dire need of energy and with a growing population, it is not certain that it could meet its energy demand to equate the teeming population. Energy has been a severe challenge in the country as it struggles to attain energy sufficiency and despite its huge natural resources, exporting crude in reasonable magnitude with enormous gas reserves as 9th in the world, Nigeria is yet to get its acts right in terms of energy.
Apparently showing concern about the ugly trend and proffering solutions as well, the Nigeria Association for Energy Economics (NAEE) held its 12th Annual International Conference under the theme ‘Energy Efficiency and Access for Sustainable Development in Emerging Economies.’
Since its inauguration in 2006, NAEE has emerged as a respected voice and the undisputed champion in educating and building the capacity of energy professionals: academics, industry players, energy correspondents and other experts.
NAEE has, over the years provided a veritable platform for the cross-fertilization of intellectual ideas especially on energy policy issues in Nigeria in particular and Africa in general.
Delivering his speech at the opening ceremony, the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, who was represented by the Chief Operating Officer, NNPC Ventures, Babatunde Adeniran said, understandably, the conference theme is timely. “For a reason, given the energy challenge in the country and government’s bold efforts to confront it headlong in recent times, this subject matter should be of interest to us.”
The GMD gave an overview of the salient issues in respect of energy efficiency, considering its relevance to the Nigerian situation and what, collectively should be done to implant individuals and corporate bodies, the culture that will instill adherence to the principles and practice of energy efficiency.
Dr. Baru spoke on various reforms NNPC management under his purview has put in place.
He asserted that energy efficiency manifests when an appliance, equipment or a structure offers longer or better performance, using the same amount of energy or, as the case may be, lesser amount of energy compared with the output by a similar facility. The appliance, equipment or structure may range from a simple electrical device such as an electric bulb, to heavy equipment like a truck, or a locomotive or even a building.
Specifically, it should be noted that energy efficiency is achievable by means of efficient technology or processes.
According to Baru, “Energy efficient buildings, industrial processes and transportation could reduce the world’s energy needs in 2050 by one third.” This will suppress emissions of greenhouse gases. Energy efficiency therefore deals with utilizing less energy to achieve greater performance.
There are cogent reasons why, whether as a nation, corporate body or an individual energy efficiency should be embraced.
Energy efficiency prevents energy waste. Many energy sources, like oil, coal and gas, are wasting finite resources which lend themselves to being exhausted over a shorter period of time if consumers fail to moderate consumption.
It has been established that carbon emissions impact the ecosystem negatively and are, in part, responsible for climate change, necessitating the need to take appropriate actions to stem them.
Baru added that energy sufficiency prevents energy poverty and much of the world economies runs on the natural resources over which concerted efforts must be taken to prolong their survival to enable economies that depend on the natural resources last longer, thus safeguarding them from financial imbalance.
Also, saving personal income on energy consumption, means more energy efficient an individual becomes and less money his or her household spends on energy.
Interestingly, there is synergy between energy efficiency and sustainable development. Preventing energy waste lends itself to developments that take cognisance of meeting peoples’ needs without compromising those of the future generation.
The NNPC helmsman gave insight on how to achieve energy efficiency.
He said as a nation, corporate body or individual, there is the need to, at certain times, junk old appliances and procure newer, energy efficient ones. Install smart metres that offer opportunity to appropriately monitor a building’s energy use for necessary assessment. Support the construction of intelligent buildings that incorporate renewable energy technologies. Design neighbourhoods in a manner that offer accessible options of “walking, biking and public transportation”.
The use of energy efficient means moving products such as pipelines as well as rail services by having a behavioural change to use energy efficiently.
The NNPC boss charged NAEE on threefold strategy in encouraging the use of energy efficiency in the country.
To attain this objective, Baru told NAEE to collaborate with associations of like minds and various tiers of government to effect policy development for energy efficiency in the country. Provide sustained enlightenment on the desirability of Nigerians to embrace energy efficiency, individually as well as in their workplace and also to offer necessary trainings to champions of this cause.
Baru said under his purview, NNPC is leaving no stone unturned to encourage its staff to use energy more efficiently. “This is in the best interest of the corporation. I can assure you that we are getting the desired outcomes in this wise, he added.
Dr. Baru used the opportunity of NAEE opening ceremony to highlight milestones and achievement of the corporation under his watch for three and half years.
He said through efficiency, NNPC has adopted practical approach at achieving sustainable cost reduction in its everyday business, leading to far-reaching reforms across the entire value chain of its operations.
Some of these achievements include:
Transparency and accountability: smarting from a turbulent past which was fraught with allegations of opacity and lack of due process, NNPC is flourishing under a renewed regime of transparency, accountability and adherence to due process. From crude term contracts to publications of monthly financial reports, transparency has permeated all facets of its operations.
Increased crude oil production:
In 2018, Nigeria’s national average daily crude oil production stood at about 2.019 million barrels. This volume translates to an increase of 9% above the 2017 average of 1.86 million barrels and comes as a significant improvement from the unimpressive production levels recorded. To underline this, the NPDC in 2018 posted a production growth of 52% compared to 2017.
Baru stressed further that there is an improvement nationwide in fuel supply. NNPC has entrenched its gains and achievements in steady supply and distribution of petroleum products nationwide, a Petroleum Product Monitoring Task Force comprising of NNPC and DSS Personnel was set up.
The team has its presence in all the critical and active depots particularly in coastal areas of the country and their impact is being felt especially in the area of preventing round tripping or back-loading from coastal depots and other forms of sharp practices as noticed during the last fuel crisis.
The GMD emphasized that the petroleum products retail arm of NNPC has played a significant role in ensuring continuous supply of petroleum products to Nigerians through its mega, affiliate and leased stations. For instance, a total of 1.2 billion litres was sold in 2018 as against 1.1 billion litres in 2017 representing a 7% increase. This was achieved through addition of 40 new affiliate and leased stations bringing the network to 618 stations nationwide.
On the past, NNPC Retail has also moved from loss making to profitability.
On Joint Venture cash call Exit, NNPC negotiated settlement of the pre-2016 JV Cash Call Arrears and also championed indigenous cash exit/JV self-funding mechanism.
The corporation has repaid over US$1.5bn out of US$5.1bn cash call arrears to date, a development that has not only restored the confidence of IOC JV partners, but has also led to improved reserves growth and crude oil production. It was quite fulfilling that in 2018.
Renewed Frontier Exploration:
Dr. Baru revealed in his presentation that NNPC has made remarkable in-roads in frontier exploration within some inland basins of the country. Topmost on the feat list is the Kolmani River-II Well which was spudded-in last February, 2018.
In its operations, the corporation is progressing satisfactorily, with drilling so far at over 10,000 feet with tremendous prospects. There was also the Chad Basin which was halted by the security situation in the area. The Basin received new vigor with the successful Spud-In of Kolmani River Well II at an elaborate ceremony by President Mohammadu Buhari.
He threw more light on revamping of critical downstream infrastructure.
Since coming on board, Baru has ensured that most of the moribund critical downstream infrastructure such as pipelines and depots across the country have been fully revamped. NNPC depots have been resuscitated and put to use through decanting of over 140 Million litres of PMS nationwide.
The corporation has also worked on the pipeline systems particularly Systems 2B and 2E supplying petroleum products to South West, South-South and South East Regions.
Reduction of the contracting cycle:
NNPC has reduced contracting cycle for upstream operations to nine months from an average of twenty-four. The target of the corporation is to achieve less than six months and strategies are being put in place to actualize this target.
Sustained Gas Supply to Power:
In 2018, national average daily gas production stood at 7.90bscf. This represents an increase of 3% above 2017 average daily gas production of 7.67bscf of the 7.90bscfd produced in 2018, an average of 3.32bscfd (42%) was supplied to the export market, 2.5bscfd (32%) for Re-injection/Fuel Gas, 1.3bscfd (16%) was supplied to the domestic market and about 783mmscfd (10%) was flared.
Domestic gas supply capacity was marginally stable at about 1700mmscfd with an average of 1.3bscfd actually supplied to the domestic market. This is due to power evacuation challenges resulting from frequency management caused by rejection of allocated load by Distribution Companies (DISCOs) as well as transmission line constraints.
However, of the 1.3bscfd supplied to the domestic market, an average of 761mmscfd was supplied to the power sector while 470mmscfd was supplied to industries and the balance of 69mmscfd was delivered to the West African market through the West African Gas Pipeline (WAGP). To sustain domestic gas supply, NNPC has restored all its gas plants to almost full capacity.
The aspect of automation of Crude Oil Marketing Operations has also gotten a boost: This process has helped to evaporate perceived mystery around the management and sale of Nigeria’s crude oil grades with introduction of innovative solutions triggering an ambience of transparency and stakeholders’ confidence in the operations of the COMD.
As part of the GMD’s achievement, NNPC at a click of a button can tell how much crude oil is sold, at what price, who bought it and where it has gone to. This has in no small way raised its efficiency quotient to an enviable level.
In his closing remarks, Baru thanked NAEE for providing another platform for the advancement of knowledge and intellectual discourse on energy economics and the economics of energy.
The event was graced by dignitaries across the energy value chain with numerous presentations on energy matters with regards to Nigeria and the globe. It was a gathering of energy experts and deliberations were made through panel discussions and solutions were proffered on how the country can move forward by attaining a sustainable energy efficiency.