… Speaks on IP Phase ll Challenges, ‘Power For All’, New Oil Fields in Akwa Ibom
With the global future of oil questioned once again after hitting a frightening low amidst the Covid 19 pandemic, glimmers of hope hover with a bold prediction from an authority in the industry that oil and gas will remain dominant commodities in the market for the foreseeable future.
The observation was made this weekend by the Chairman, Board of Directors, Ibom Power Company, Engr. Etido Inyang. Inyang, an internationally certified drilling engineer with 20years experience in the global oil and gas industry also has vast experience in civil engineering. He was speaking to the media.
Asked about what the future holds for the industry, the chairman said trends have shown that oil price has never fluctuated to a point that it stays low forever. It is at a very low level, he agreed, but predicted that once the Coronavirus hurdled is scaled, there will be a bounce-back.
‘I spent 20 years before leaving the oil industry. I study the trend and still in tune with happenings and curves in the industry’, he remarked.
Disclosing that the federal government is about to bid for marginal fields, he strongly recommended that prominent indigenes of the state ‘should go for these marginal oil fields’.
He revealed that between 13 to 15 fields will be going to Akwa Ibom State and advised against allowing only external forces to benefit from the prolific fields from ExxonMobil and Total. He suggested that Akwa Ibom government as the highest producer of crude oil should set up a team that will go for the bid rounds so that its indigenes are trained in oil production for the ‘big money’.
‘I still believe in oil. The world has not produced anything in commercial quantity to challenge oil and gas yet. Look at NLG Train 7, it is coming on stream, contract has just been signed. That will enhance the cost of gas and it was signed during the Covid 19 period. In future, 10 to 20 years, there could be a technology to compete; but currently the technology available is not commercial enough to challenge oil’.
Responding to a question on why IP is yet to reach its Phase II, Inyang referred to the difficulty witnessed as a general problem in the country’s power sector. According to him, lots of investors are ready to invest in the phase II but the absence of Power Purchase Agreement has hindered progress. The federal government’s unresolved issue with the PPA which must be followed by Sovereign Guarantees has lingered.
‘They are not backing up PPA with SGs anymore and that has to be done by the federal government and not the state government. This policy has disenfranchised a lot of investors.
‘It is not only in Akwa Ibom but all over the country. That’s why you won’t see new power plants coming up. The federal government policy currently does not support new power plants’.
On the Power For All initiative of the state, Inyang reiterated the concept is on track as every stakeholder and partner involved are working in synergy to meet the 2021 exit point set by the governor.
‘Where we are now is the level we are engaging banks, Phedc, and we are lined up to engage the NERC because power is in the exclusive list’.
He said they have looked at the architecture to retain power in the state and IP has the capacity to sustain availability of the project which will be profitable for government, fast track industrialization and push growth of SMEs. Communities without power are to be enlisted and captured in the plan and he was hopeful that physical engagement of infrastructure, designing and deployment of power will happen soon.
The board chairman played down fears that the downturn in oil which will affect gas production will hinder the capacity and productivity of IP.
‘The downturn should even be advantageous to us as we have already logged in the price regime for gas supply.
There is still a lot of gas volume in the reservoir. The depletion does not affect us. It will affect new businesses and only those pumping for export. Some people have shut their wells because of the cost in quota. The business already has its price regime’.
On the improvement in power supply seen lately in the state, he attributed it to efforts made by Governor Udom Emmanuel before and during the weeks of total lockdown to ensure the effects of that executive order were not felt too hardly.
‘Before the lockdown began, there were concerns on how people would cope without power in their homes and we held a meeting with Phedc.
The governor insisted that they must ensure there’s power availability across the state. They complied with that directive. The excuse they (Phedc) have given for rationing power is because many consumers do not pay for what they consume,’ he quipped.