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Energy Crisis: Nigeria to lose N1.2bn daily over Agip oil export cut

Nigeria’s energy crisis on Monday took a multiple dimension as Agip announced a halt in oil export at its 25,000 barrels per day (bpd) Brass…

Nigeria’s energy crisis on Monday took a multiple dimension as Agip announced a halt in oil export at its 25,000 barrels per day (bpd) Brass export terminal in Bayelsa. 

This was sequel to a blast at its facility, which could trigger a $2.84 million (about N1.2 billion) daily oil export loss. 

Nigeria has been battling with activities of oil vandals who have been using advanced technology to blow up oil installations. 

Most of the recent setbacks have been attributed to them amid increased oil spillage and environmental degradation. 

Such activities have made it difficult for Nigeria to meet its OPEC quota and by extension lose billions of dollars at a period of rising oil prices in the international market. 

The announcement of the destruction came when the national electricity grid crashed to zero from a 2,700 megawatts (MW) level around 11am, amidst an emergency meeting between the Minister of Power, Engr. Abubakar D. Aliyu and power firm operators on how to resolve the problem. 

According to the Nigerian Agip Oil Company (NAOC) in a statement, the force majeure was declared on oil exports of 25,000 bpd from its Brass terminal and gas feeds to the Nigeria Liquefied Natural Gas at Bonny after a blast at its facility in Nembe LGA of Bayelsa State that cut oil export from its Brass export terminal. 

The force majeure also affects the gas supplies to the Okpai Power Plant. 

At the price of at least $113.4 per barrel of Bonny Light on Monday, Daily Trust reports that Nigeria’s loss from crude oil exports could amount to $2.84m daily and may continue until the damaged facilities are repaired. 

The incident was the second attack in a few days after an earlier incident on February 28 at its Obama flow station led to a production shortfall of 5,000 barrels per day, the oil company said. 

Gas output of 13 million standard cubic metres per day has been deferred due to the incident, the statement said. 

Force majeure is a legal clause in contracts that absolves firms from legal liabilities due to circumstances beyond their control. 

The company said, “An incident occurred on the Ogoda/Brass 24” oil line, at Okparatubo in Nembe LGA of Bayelsa State. 

“The event was caused by a blast, consequently causing a spill. All wells connected to that pipeline were immediately shut-in whilst river booms and containment barges were mobilised to reduce the impact of the spill.

“Regulators for inspection visit and repair teams have also been activated. State and federal government and security authorities were notified. 

“Deferred production is estimated at 25 kbopd oil and about 13 MSCM/d of gas. 

“Force majeure has been declared at Brass terminal, Bonny NLNG and Okpai Power Plant,” Eni (Agip) stated. 

The National Oil Spills Detection and Response Agency (NOSDRA) confirmed that joint investigative visits on the two incidents have been conducted but that the field officers assigned were yet to file their reports. 

The Director-General of NOSDRA, Mr Idris Musa, said the two incidents were traced to vandalisation, adding that 20 barrels leaked in the Feb 28 incident, while 1,249.8 barrels were discharged into the environment in the second incident.

Communities lament degradation 

Meanwhile, residents at the predominantly fishing settlements who operate in the creeks and near the Atlantic shoreline at Nembe and Brass in Bayelsa have lamented the adverse impact of frequent spills in the area. 

Mr Noel Ikonikumo, Chairman, United Fishing Union, Sangana, listed the oil spills to include the November 5, 2021, well blowout from Aiteo’s field in Nembe and a gas leakage at Conoil’s field at Sangana in Brass LGA also in Nov 2022. 

He said barely three months after the Nov 5, 2021 incident from Aiteo’s field, another leak occurred in February, while two other incidents occurred near Ship’s Obama Flow station in Nembe, which cumulatively polluted the waters they fish in. 

Energy expert, Mahmud Sani lamented that Nigeria has failed to get it right decades after the discovery of the oil treasure. 

“The development in the Niger Delta region is sad because oil bunkering is one of the reasons for the persistent crisis in the industry. 

“The amnesty programme has solved some problems but it did not put an end to organised thievery. High profile individuals are involved in bunkering and the government must find a way of tackling them,” he said.

Outage after grid collapse 

Besides the ugly development in the gas industry, there was a nationwide power outage since Monday morning when the national electricity grid crashed to zero after it lost 1,100 megawatts (MW) from a 3,700MW peak generation earlier and dropped to 2,700MW before the crash, a grid operations report has shown. 

The incident occurred just as the Minister of Power, Engr. Abubakar D. Aliyu, called an emergency meeting with power sector operators to address the low power generation.

The system did not pick up load till later in the afternoon, Daily Trust reports.

During the time under review, many communities in some states suffered power outages even as businesses that relied on electricity had to use generating sets with the attendant high cost of diesel. 

According to the grid operation trend, of the active 25 GenCos on the grid, 19 were producing power as of 6am when the grid had 3,867.60MW but that began to reduce gradually until it dropped to 2,761.20MW by 10am after six GenCos went down, leaving just 13. 

At least 1,100MW was lost from the 3867MW peak generation when the five GenCos shut down. 

The analysis shows the affected plants to include Azura-Edo IPP (Gas), which was generating 447MW earlier. Shiroro hydropower, which had 300MW before it went off; Trans-Amadi (Gas) that lost 92MW; Alaoji NIPP (Gas) lost 75MW; and Ihovbor NIPP (Gas) which lost 101MW. 

The situation occurred less than a day after the GenCos, through the Association of Power Generation Companies (APGC), raised the alarm over inefficient grid management and accruing debt in the electricity market. 

They said some of the GenCos’ turbines now have technical faults due to the inefficiency while the debts have limited their ability to pay for more gas-to-power. 

The management of the Transmission Company of Nigeria (TCN), which manages the power grid was yet to comment on the immediate cause of the collapse, being the first of such this year.

A management official promised to revert, saying the company was restoring the grid at the moment. 

Power Minister, Aliyu had recently noted that investments in the power sector were yielding results with just two system collapses recorded last year from a multiple of 10 in the past years. 

Meanwhile, in the latest meeting, which continued into Monday night, the minister tasked the operators on working together to make electricity more stable.

Those in attendance at the meeting, which was held at the Power House in Abuja, include representatives of GenCos and DisCos, Transmission Company of Nigeria (TCN), Nigerian Bulk Electricity Trading (NBET), Niger Delta Power Holding Company (NDPHC), NNPC Ltd, among some gas suppliers. 

The minister said: “This meeting was summoned to address the current electricity situation in the country which we see not happy about. 

“We must find a solution so that Nigerians will have electricity. I want us to have the patience to talk to each other, not blaming each other.” 

Aliyu maintained that the Nigerian government will not relent in its effort to make sure that improvements in the power sector are sustained and built upon so that the electricity supply improves across Nigeria.

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