NEWS
Dangote Refinery and Its Crude Supply Wars
By Akpandem James
Ever since the Dangote Refinery began production late last year, it has faced numerous challenges. It has been in conflict with many major players in the oil and gas industry, including the national oil company, Nigerian National Petroleum Company Limited (NNPC Ltd.), as well as the two industry regulators: the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream/Downstream Petroleum Regulatory Authority (NMDPRA).
The management of the facility has accused these entities of either directly sabotaging the refinery or attempting to do so by limiting its access to the required crude supply and penetration of the local markets. In the past two months, conflicts have been commonplace between the refinery’s management and the strategic operator and regulators. NNPC Limited and the regulators have denied all the accusations and maintained that their operations comply with the laws outlined in the Petroleum Industry Act, 2021 and the accompanying regulations.While Dangote Refinery’s management is presumably striving to meet its extensive demands, there is a concern among industry players that the new refinery owners are aiming to monopolise the sector without regard for existing rules and conventions governing global industry practice.Observers outside the industry view the ongoing conflict between Dangote Refinery and key players and regulators in the petroleum industry as a recurring pattern in the Dangote conglomerate’s business strategy. This strategy appears to involve eliminating competition and establishing a monopoly, as seen in previous conflicts in the cement, sugar and consumables’ markets.But the war in the oil sector intensified with accusations flying in all directions, including toward the NNPC, NMDPRA and, more recently, the NUPRC.It would be improper to assume that one would start such a huge venture and become complacent in the face of threats. However, there is still a debate on whether the Dangote Group adequately planned for a steady supply of raw materials when they first set up the refinery. Did they consider the issue of adequate raw material supply during the planning stage of such a mammoth refinery, or did they just assume that everything would fall in place once they commenced production?There have been many stories about the planning and building of the refinery. The extent of the Nigerian government’s involvement in the project is not widely known because both the organisation and the national oil company, NNPC Ltd, have been indecisive at different stages. It is unclear whether the issue of crude supply, which Dangote is insisting on, was part of the original agreement. If not, why would a private company, regardless of its importance to the national economy, try to dictate how it should be supplied?Dangote has complained several times about unfair competition allegedly caused by the activities of the NMDPRA and NNPC, as well as a shortfall in the supply of crude oil from the national oil production. The organisation claims that it has been unable to obtain its full crude oil requirements from domestic production. It also claims to purchase Nigerian crude oil from international traders at an additional premium of $3 to $4 per barrel.Because of the commotion caused by the flying allegations, the Federal Executive Council approved with the seal of the President that local refiners, including Dangote should have access to Nigeria’s crude oil which should be sold in the local currency, not in the United States Dollars – a significant industry policy shift.After the intervention, Dangote now acknowledges that it is receiving its share of supplies from NNPC Limited. However, it claims that the international oil companies (IOCs) are not following the oil supply guidelines set by the NUPRC. Initially, Dangote urged the NUPRC to enforce the Domestic Crude Supply Obligation (DCSO) in accordance with the requirements of the Petroleum Industry Act 2021. Later, it accused the Commission of being reluctant to enforce the provision, but the regulator strongly rejects this accusation.In an elaborate explanation through a statement, NUPRC asserted that it has consistently exercised its regulatory oversight to ensure that Dangote Refinery, along with other domestic refineries, receives a fair share of crude oil allocations, which is part of the Commission’s commitment to supporting the growth and success of the domestic refining sector in Nigeria.According to Section 109 of PIA 2021, the Commission is mandated to develop procedures for imposing DCSO based on the crude oil needs of domestic refineries. It claimed that as part of a strategic commitment to Nigeria’s energy security, the Commission facilitated the supply of 32,088,122 million barrels of crude oil to nine local refiners within the first half of 2024. Dangote Refinery alone had 29,047,098 million barrels of that volume.The Commission insists that, in order to ensure smooth operations, it collaborated with industry stakeholders to establish the Production Curtailment and Domestic Crude Oil Supply Obligation (DCSO) Regulation in 2023. Subsequently, it operationalised the PIA and the DCSO regulations to avoid shortages of crude oil supply to refineries. A tripartite committee was formed to recommend a template for the Commission’s consideration. It was the Committee’s recommendations that were used to develop guidelines for the operationalisation of the DCSO.The Commission claims that it not only started implementing metrics that require companies to dedicate between 29% and 34% of their production for sales to domestic refineries but also included Dangote and other domestic refiners as observers in Curtailment meetings to enable them to gain firsthand information about available cargoes before they are released to the market.The Commission also claimed that it engaged Dangote and local refiners on several occasions to ensure that their supply quota was met in line with the provisions of the PIA. It insisted that the operators have been kept informed throughout the process, so there was no question of reluctance to enforce crude supply against presumed erring operators.NUPRC however admitted that in strictly exercising its mandate on crude supply, it countered some challenges including the Mode of Crude Oil Production, the Doctrine of Sanctity of Contracts, and Pricing of Crude to Domestic Refineries. These have to do largely with the capital-intensive nature of petroleum upstream operations which require companies going into various financing arrangements, with pre-export financing obligations, resulting in production encumbrances.The Commission’s position is that while the law mandates all stakeholders in the upstream petroleum sector to supply crude to domestic refineries, there is also a disagreement regarding the pricing of the volume transferred to local refineries. As a consequence, the Commission is responsible for facilitating willing buyer and willing seller transactions without price control as well as ensuring that supplies to the refineries are not overpriced. It explained that while the Commission has capped the Federation Crude Equity (FCE) by the trading arm of the NNPC Limited, the same cannot be done for the Private Equity Crude (PEC) which belongs to other operators because of existing obligations.The explanation given was that, in attempting to enforce the Direct Crude Swap Offtake (DCSO) pre-existing commitments of operators must be considered because some operators are constrained by their financing arrangements and are already committed to entities that have provided funding for their operations, and are entitled to recover through crude supply. And this is not peculiar to Nigeria; it is an industry practice. “Much as the NUPRC has tried to ensure the enforcement of the provisions of Section 109 of PIA, 2021, the producers have equally responded to the regulator saying that conventionally oil production is funded through pre-export financing.”Although the law mandates the withdrawal of a license from an operator who fails to comply with industry regulations, the Commission insisted such power must not be used presumptuously and arbitrarily because of its negative implications on the country’s investment climate, oil production, revenue and the oil and gas sector. It would lead to a substantial reduction in royalties and taxes going to the federation account.NUPRC is curious about the needs of the Dangote management but emphasises that the Commission will continue to prioritise the development of a transparent and well-regulated upstream petroleum sector. This includes providing support to all stakeholders, including Dangote Refinery, while ensuring that the industry operates in compliance with the law and upholds the highest standards of contractual integrity. This approach aligns with Nigeria’s broader economic goals.James is a Fellow of the Nigerian Guild of EditorsNEWS
Bill for Compulsory Counselling, Training of Convicts Scales 2nd Reading
A bill to amend the Corrupt Practices and Other Related Offences Act, 2000, has successfully passed its second reading in the House of Representatives.
The bill, which mandates compulsory counseling and training for individuals convicted of corruption-related offenses, was sponsored by Rep.
Kayode Akiolu (APC-Lagos State) during plenary on Wednesday.Leading the debate, Akiolu explained that the bill sought to amend Section 67 of the principal Act, introducing new provisions that were not part of the original section.
“These additional provisions, found in subsections 2, 3, and 4 of the amendment bill, require judges and magistrates to not only impose imprisonment and/or fines on those convicted of corruption but also mandate a minimum four-week anti-corruption counseling and training.
“The counseling and training will be designed and delivered by the Anti-Corruption Academy of Nigeria (ACAN) and aims to address the psychological factors related to corrupt behaviour.”
Akiolu emphasised that the training would help reform convicts by addressing their corrupt tendencies and could even transform them into advocates for anti-corruption efforts.
He added that this approach aligned with the reformative aspect of the criminal justice system, which focused not just on punishment but also on rehabilitation.
“As per subsection 4, the bill allows magistrates and judges to order convicts to cover the cost of their counseling and training, preventing additional financial burdens on the government.”
Akiolu further argued that if the bill is passed into law, it would strengthen the country’s fight against corruption.
He urged the House to support the bill for the country’s benefit, given the widespread negative impact of corruption.
Following the debate, the Speaker of the House, Rep. Tajudeen Abbas, referred the bill to the relevant committee for further legislative consideration.(NAN)
NEWS
Pay Attention to Industrialisation, Agriculture to Create Jobs —- Trade Fair Official
Chairman of the 11th Kwara Trade Fair Organising Committee, Mr Abu Salami, on Wednesday in Ilorin called for more focus on production and industrialisation via agriculture and livestock development.
Salami said that the sector had the potential to create jobs and wealth for youths and women while contributing to the state’s economic growth and prosperity.
“We are thrilled to be marking a significant milestone in the history of our Trade Fair which began on Friday at the Kwara State Sports Stadium Complex and will end on Monday.
“As we move forward, I urge us all to focus on production and industrialisation via agriculture and livestock development.
“This sector has the potential to create jobs and wealth for our youths and women, ultimately contributing to the state’s economic growth and prosperity.
“Let us work together to create a brighter future for ourselves, our children and our state.
“Let us harness our collective energy, creativity and resources to drive economic development and improve the lives of our citizens,” Salami, who is the First Deputy President of Kwara Chamber of Commerce, Industry, Mines and Agriculture (KWACCIMA), said.
He added that a collective passion for KWACCIMA’s vision and mission was crucial in achieving success.
Speaking also to newsmen, the President of KWACCIMA, Mrs Ronke Adeyemi, said the Trade Fair, like the others before it, was specially designed.
She said it was designed for businessmen and women to showcase their products and services to the world with a view to attracting customers and investors to the state.
Adeyemi said Kwara was not only blessed with human, natural and agricultural resources but also strategically located in the middle of the country.
“This allows for favourable weather conditions that is good for the growth of diverse agricultural products,” she said.
The KWACCIMA President noted that, like the rest of the world, Nigeria was passing through a difficult economic period.
“This is taking its toll on businesses, and this is why our theme for this year’s Trade Fair is ‘Unlocking Investment Potential of Kwara State for Sustainable Economic Development’.
“The sharp rise in the cost of fuel and electricity in our country are dealing big blows on our economy.
“But these hard times also have an advantage.
“We are forced to think outside of the box, not only in the effective management of our resources, but also to develop new business ideas that are capable of improving our lives as a people.”
Adeyemi pointed out that Kwara was blessed with good weather, mineral resources, fertile land and a healthy population consisting of all cadres of people.
“This year’s Trade Fair is therefore aimed at drawing the attention of investors and the business community to the limitless opportunities that abound.
“We have on display products from our intellect, factories and from our farms.
“Our people in (Ministry of) Commerce are here with their wares and our local government areas have come with samples of products available in their localities.
“We implore our guests to go round and see our products and patronise our people”, she said.
The KWACCIMA President then expressed her appreciation of the governor of Kwara for the development of the private sector in the state and his generosity in hosting the Trade Fair.
“We seize this opportunity to acknowledge the urban renewal programme now embarked upon by the Kwara government to beautify our cities.
“This is a welcome development that has largely corrected the distortion of the landscape of llorin in particular and we appreciate the governor for this bold step,” Adeyemi said.
She however pleaded for nano and small-scale business owners whose shops and sources of livelihood have been greatly affected by the development to be resettled in another market area.
“Our kind and compassionate governor should assist these groups with the provision of a resettlement market where they can continue their businesses without hindrance.
“Times are really very hard now and every help received will go a long way in alleviating the condition of our people.”(NAN)
Education
Education, key to Changing Nigeria, says NTI D-G
Prof. Sadiya Sani-Daura, Director-General, National Teachers’ Institute (NTI), Kaduna, says education is key to changing and transforming Nigeria in all ramifications.
Report says that she spoke on Wednesday in Kaduna while declaring open nationwide training workshops for 222 basic school teachers drawn from across Nigeria.
The five-day training is also focusing on E-learning, climate literacy and green life skills.
The training is taking place simultaneously in Kaduna and Lagos, with the participants drawn from the 26 states and FCT.
It has as its theme, ‘Digital Pedagogy, Remote Learning, E-Learning, Climate Literacy and Green Life Skills.’
The training was organised by the Institute in collaboration with the Universal Basic Commission (UBEC).
She said, “With the right attention given to the education sector, a lot of the negative narratives in Nigeria will change for the better.
” A lot of things went wrong hitherto because education was not getting the desired attention.
“With education getting the desired attention, everything will change, including combating criminality.
“It is however gladdening that the present administration of President Bola Tinubu is unwaveringly committed to redressing the obnoxious situation.”
The director-general further reiterated the unwavering commitment and dedication of the Institute to teacher training and development.
According to her, NTI will remain steadfast in making the Nigerian teachers globally competitive,hence helping to restore the lost global glory of the nation.
Sani-Daura, said they represent a milestone in the collective effort to advance teacher education and strengthen the foundations of basic education in the country.
She said that NTI, in collaboration with UBEC has consistently championed innovative strategies to equip the teachers with the skills and knowledge required to address the evolving demands of modern education.
Sani-Daura said, “Today’s workshops reflect this commitment, providing an avenue for professional development that aligns with global best practices and national priorities.
“The first focus area, which is digital pedagogy, remote teaching and e-learning, comes at a time when technology has become an integral part of the teaching and learning process.
“Teachers must be empowered with the tools and skills to harness the potential of digital platforms to enhance instruction, engage learners and foster critical thinking.
“This training is expected to bridge the gap between traditional teaching methods and the emerging trends in education technology as well as prepare the teachers to thrive in the digital age.”
On climate literacy and green life skills, the director-general decried that the world was grappling with the effects of climate change, saying, “our responsibility as educators goes beyond academics.
“Teachers play a critical role in shaping attitudes and behaviours that promote environmental sustainability.
In a welcome address, Dr Bature Salisu, Special Technical Assistant to the director-general, said that the collaboration between NTI and UBEC underscored the shared vision and partnership to advance teacher education.
He said, “This initiative is a testament to the NTI’s unwavering commitment in enhancing the professional capacity of teachers and addressing contemporary educational challenges.”
According to Salisu, the training reflects a collective resolve to equip teachers with innovative teaching methodologies and critical life skills to prepare students for the demands of the 21st century.
The acting Registrar of the Institute, Mrs Zainab Aliyu, described the theme as apt and timely.
She stressed that Nigerian teachers must not lag behind, urging them to be creative using technology.
The teachers attending the workshop at Kaduna were drawn from all the Northern states and FCT while the participants at the Lagos centre were drawn from all the Southern states. (NAN)