BUSINESS
2021: NNPC in Retrospect
In retrospect, the Nigerian National Petroleum Company (NNPC) Limited recorded some remarkable achievements in 2021 including the signing into law of the Petroleum Industry Act (PIA) by President Muhammadu Buhari.
There are other major achievements in the industry which had placed the country on the part of success since the first discovery of crude oil in 1956 at Oloibiri, in present day Bayelsa.
The oil and gas industry had since grown to become the bane bedrock of Nigerian economic and a major source of national development.
The industry contributes about 30 per cent of the nation’s gross domestic product, GDP, over 70 per cent of government revenue and 90 per cent of foreign exchange earnings.
With this steady beat over the past six decades and the attendant contribution to the national coffers, the Nigerian oil and gas industry has evolved; with Nigeria becoming the largest oil and gas producer in Africa.
According to the defunct Department of Petroleum Resources (DPR), Nigeria has a total of 159 oil fields and 1,481 operating wells.
Nigeria currently has the largest gas reserve in the African continent and the world’s fifth-largest exporter of liquefied natural (LNG).
According to the defunct DPR, Nigeria has a proven gas deposit of 206.53 trillion cubic feet; the gas reserve is projected to increase to 230 trillion cubic feet by 2030.
The new figure represented a major increase of 3.37TCF in proven natural gas reserves; a 1.66 per cent rise from the 203.16TCF recorded on Jan. 1, 2020.
Sarki Auwalu, who was Director of DPR, in a breakdown, said of the 206.53TCF, Associated Gas was 100.73TCF and Non Associated Gas 105.80TCF.
The impact of the unexpected emergence of the COVID-19 pandemic on the global oil and gas industry in 2020 brought huge losses to the industry; consequently, in the last two years, the global oil and gas industry suffered a two-pronged setbacks caused by the imbalance in oil supply/demand and price deflation.
This global issue of course did not happen without a reverberating effect on the Nigerian oil and gas industry and that has not put the nation’s economy in a good stead.
In January, Chief Timipre Sylva, Minister of State for Petroleum Resources, declared 2021 to 2030 as the Decade of Gas Development.
Sylva said the initiative was to transform Nigeria to a gas-powered economy by 2030.
“Our efforts will continue to focus on gas to transmute Nigeria from the conventional dependence on white products to a cleaner, more available, accessible, acceptable, and affordable energy use in gas.
“This will not only cushion the effects of current deregulation but also create enormous job opportunities for Nigerians”.
The NUPRC is in charge of upstream petroleum regulatory activities while the NMDPRA is responsible for oil and gas activities in the midstream and downstream sectors.
NNPC Ltd. was incorporated as a Companies and Allied Matters Act (CAMA) company on September 22 in line with provisions of the PIA.
The NNPC Limited and its subsidiaries would operate under CAMA 2020 without recourse to Government funds, declare dividends to its shareholders and retain 20 per cent of profits to grow its business.
The new company is to be the supplier of last resort for security reasons and all associated costs shall be for the account of the federation.
In October, the NNPC was given approval for the reconstruction of 21 federal roads across the six geopolitical zones of the country.
The approval was given at the FEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.
Briefing State House correspondents at the end of the council meeting, the Minister of Works and Housing, Mr Babatunde Fashola said that the construction works on the 1804.6 Kilometers roads is a strategic intervention under the Federal Government Road Infrastructure and Refreshment Tax Credit Scheme.
He explained that the Executive Order 7 allows the private sector to deploy in advance the taxes they would pay for infrastructure development.
OTHER ACTIVITIES
The year 2021 witnessed intensified calls for global transition to cleaner sources of energy and reduction in investment in fossil fuels exploration activities which saw the major International oil companies divesting from crude oil to gas and other renewable resources of energy.
Many of the companies have changed their names from oil companies to energy companies to reflect their current positions as they move to become carbon neutral by 2045.
It is to this end that the world leaders gathered at the United Nations Climate Change Conference (COP 26) in Glasgow, Scotland in November with discussions on energy transition dominating the conference.
President Buhari who addressed the conference demanded for energy justice for Nigeria and other developing countries with hydrocarbon resources.
He said there was need to exploit the available resources as a pathway to attain the net-zero carbon objectives by 2050.
The president noted that even though Africa accounted for only about three per cent of the global carbon emission, the continent still had the responsibility to join the world in combating climate change.
According to him, Nigeria has identified its abundant gas resources as its fuel for energy transition which informed the declaration of the 2021 to 2030 as the “Decade of Gas” by the government.
He also said that the enactment of the PIA would attract investment for the enhancement of gas utilisation. This is in alignment with the various incentives granted to investors.
In November, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, announced that government would remove subsidy on Premium Motor Spirit from 2022.
The minister said that government plans to replace it with a monthly N5,000 transport grant to about 40 million poor Nigerians.
Analysts believe that removal of subsidy would make the price of petroleum products in Nigeria, be at par with its African neighbours which would discourage smuggling.
He said that the 2022 deadline is realistic as the impact of the subsidy removal might be mitigated with the coming on stream of the 650,000bpd Dangote Refinery, Bua Group Refinery, Waltersmith Refinery and other modular refineries.
Nigerians also witnessed an unprecedented hike in the price of Liquefied Petroleum Gas (LPG), also known as cooking gas, in 2021.
The increment forced some low-income families to go back to the use of firewood and stove, which was a setback to the government’s aspirations to deepen gas utilisation in the country.
As at January, the price of cooking gas ranged from N4,500 to N5,000 depending on the location, but in a few days to the end of the year in December, the marketer sold the LPG for between N8,500 and 10,000.
Marketers attribute the hike to global supply challenges, high international prices, limited availability of foreign exchange and high exchange rates.
The GMD/CEO of NNPC, Kyari gave reasons for the increase and assured the nation of NNPC’s commitment to bring down the prices.
On Nov. 5, Well head 1 in Nembe, Bayelsa operated by AITEO Exploration and Production spilled its contents, causing serious damage to the environment.
The company, working with local and international experts, was able to stop the leakage on Dec. 8, while clean up and investigation into the incident was carried out.
Also, NNPC presented a symbolic tax credit cheque to the Minister of Works and Housing Mr Babatunde Fashola, in his office in Abuja.
At the event, the minister dispelled insinuations that the NNPC was taking over road construction from the ministry. (NAN)
By Tony Obiechina, Abuja
The Commissioner for Insurance/CEO, Mr. Olusegun Ayo Omosehin, and his management team have met with the members of the Constitutional Committee on “Mobilisation and Diversification” of the Revenue Mobilisation Allocation and Fiscal Commission ( RMAFC) led by Engr.
During their working visit to NAICOM Headquarters, Mr. Olusegun Ayo Omosehin, in his opening remarks, reaffirmed the critical role of the insurance sector regulator in supervising, regulating, and safeguarding the interests of insurance policyholders.
He highlighted insurance’s pivotal role in mobilising savings for long-term developmental projects and enabling businesses to thrive while managing risks effectively.
He also stressed the Commission’s commitment to ensuring insurance companies meet their obligations, thus contributing to the sustainability of the economy.
Speaking, Mohammed Baba emphasised the importance of revenue generation, institutional expansion, and employment creation for Nigerians through collaborative efforts.
The Commissioner for Insurance also acknowledged President Bola Ahmed Tinubu’s ambitious goal of growing the Nigerian economy to One Trillion United States Dollars ($1 trillion) by 2026.
He expressed the insurance sector’s intent to significantly contribute to this objective. Additionally, he mentioned ongoing efforts to embed insurance within the National Credit Scheme to ensure its sustainability.
Mr. Omosehin stressed the need for continuous advocacy and sensitization of government institutions about the vital role of insurance in national economic development.
From Joseph Amedu, Lokoja
No fewer than 22,000 beneficiaries in Kogi will get N50,000 each, under the Presidential Conditional Grant Scheme (PCGS) to boost Micro, Small and Medium Enterprises (MSMEs) in the state
The Managing Director and Chief Executive Officer (MD/CEO) of Kogi Enterprise Development Agency (KEDA), Hon.
Okeji said the PCGS was being implemented by the Federal Ministry of Industry, Trade and Investment through the Bank of Industry (BOI) in partnership with the Kogi Government in line with the Renewed Hope Agenda of President Bola Tinubu.
He noted that the PCGS enrollment for beneficiaries of Nano businesses was flagged by Kogi Government simultaneously on Wednesday across the three senatorial districts in Okene, Ankpa and Kabba respectively.
He disclosed that over 22,000 beneficiaries across the 21 local government areas of Kogi would receive N50,000 each as grant to boost their nano businesses and improve sustainability.
According to him, about 1070 beneficiaries would get the grant from each of the 21 local government areas across the state.
“The PCGS is aimed at ameliorating the harrowing effects of the fuel subsidy removal, to provide a one-off grant of N50,000 to over 22,000 Nano business owners across Kogi State.
“We are grateful to Mr President for the impactful initiative at a time of stiff economic challenges for both businesses and the generality of Nigerian citizens.
“Mr President’s gesture is a sensitive step towards safeguarding the small business ecosystem which is the lifewire of the nation’s economy,” he said.
Okeji expressed gratitude to Gov. Ahmed Ododo for keying into the initiative and providing the adequate resources required to draw down the benefits to thousands of Kogi Nano businesses.
This, he said the governor was fulfilling his determination to strengthen the MSMEs which remained the backbone of the nation’s economy.
He added: “We thank our governor for swinging into action to provide the needed resources to complement the effort of the federal government in flagging off the scheme across Kogi.
“As we embark on this journey of empowering our Nano businesses today, let me remind you that you are the backbone of our economy.
“As such, the government of our dear Gov. Ahmed Ododo is determined to provide all the support that will boost your capacity and survival. We will not let you fail”, Okeji assured.
In his remarks, the Ohinoyi of Ebiraland, HRM Alh. Ahmed Tijani-Anaje, commended President Tinubu for the timely initiative, and eulogised the governor for ensuring that a larger number of Kogi citizens benefited from the scheme.
Our Correspondent reports that Okeji subsequently went round the state to monitor the enrollment exercise in Kabba and Lokoja.
Okeji further said that the enrollment exercise which was being conducted by officials of BoI, was expected to continue till Friday, while disbursement follows immediately.
One of the beneficiaries, Oyiza Bajeh from Adavi, thanked the President for the gesture, and appreciated the Governor for deeming it fit to bring the program to the grassroots.
“When I received a text message from BOI to come for data capture, I dismissed it as one of those scams. But upon a second thought, I decided to give it a tryer.
“Surprisingly, I met a huge crowd of market women, youth and even people with disabilities gathered here at the Ohinoyi palace for the exercise.
“We are very grateful to President Tinubu and Governor Ododo for the gesture,” Bajeh said.
By Ubong Ukpong, Abuja
The Accountant General of the Federation, Mrs Oluwatoyin Madein on Wednesday said total revenue inflows to the Federal Government in the first quarter of 2024 amounted to N318.5 billion.
She disclosed this in a hearing by the House of Representatives Committee on Finance to monitor the revenue by agencies of the Federal Government.
Represented by the Director, Revenue Expenses, Felix Ogundayero, she said this was against a total expected revenue of N2. 591 trillion for the year 2024.
She added that a reconciliation of the figures was still ongoing and what was declared is what is available at the moment.
Madein expressed confidence that it would be an exceptional year in terms of revenue for the country based on the policies of the present administration.
She said the bottom up cash planning policy would be adopted in implementing the 2024 budget.
She said, “Reconciliation is still being done but the total revenue inflows to the federal government for January to March amounts to N318. 5 billion as against a total budget of 2.691 trillion.
“For the budget, the bottom up cash planning policy is on course and the 2024 budget is going to be implemented via that policy and officers have been retained and sensitization is ongoing to ensure that MDAs are well equipped on the modalities and conditionalities,” he said.
Chairman of the Committee, Hon James Faleke, said the essence of the sitting was in line with their duty as a parliament to oversee to ensure that the revenue estimates which were submitted by each agency before the 2024 appropriation bill was passed into law are met.
He said, “We have to ensure that those estimates are met. The Appropriation has become a law and so that revenue that you proposed to generate in the year we take it upon ourselves to do it on a quarterly basis to measure your performance.
“We want to ensure that revenue activities from January to March are in line with your appropriation. When you are giving us your figure, you tell us what the figure was expected for the generation and what you have achieved. Also tell us your expenditure,” Faleke said.
Chief Executive Officer of the Ministry of Finance Incorporated (MOFI), Dr Armstrong Takang, also disclosed that so far N101 billion have been declared as dividends by some agencies under it.
He said the report presented was not comprehensive as some agencies were yet to declare their dividends due to various factors.
He said, “So far we have received dividends declared by some companies. But for many others their reports are either being prepared and have not been completed or have been completed but they have not gone to their boards for approval and subsequently the AGM and as such we cannot use the number of their dividends until that has been done based on the corporate governance rules.
“Based on the number so far, it’s about N101 billion from the entities we have identified. We continue with other entities whose dividends have not been paid to ensure we go through the process of them passing it at the board level and the AGM before the figures are sent to us and the money rendered to the treasury.”
The Chairman of the Committee, Faleke, directed that all the agencies under MOFI should produce their annual report for the past 10 years.
“All organisations under MOFI should produce their annual report for the past 10 years and the dividend that ought to have been paid, what ought to have been paid, and what was paid by each of the agencies, and of course evidence of payments,” Faleke said.
The House also berated the Nigerian Agricultural Insurance Corporation for performing far below expectations.
The Corporation, represented by Dr Philip Ashunze, had said out of a total expected revenue of N10 billion, it had only generated N70 million so far.
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