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Dangote Refinery’ll Transform Africa’s Economy -Stakeholders

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The $12 billion Dangote refinery and petrochemicals complex has been tipped as having the potential to transform the African economy.

This was the verdict of oil and gas stakeholders at the just ended Ghana International Petroleum Conference (GhIPCON) in Accra, Ghana themed ‘Regional Collaboration; A Catalyst for Transformation’.

The conference was organised by the country’s Ministry of Energy and the National Petroleum Authority.

The stakeholders pointed out that with a wobbling Gross Domestic Product of $1.8 trillion, countries in Sub-Saharan Africa were on the cusp of economic transformation, with the imminent coming on-stream of  Dangote refinery, particularly as the region is expected to be the direct beneficiary of the 650,000 barrels-per-day refinery, which will drastically reduce the countries’ fuel import majorly from Europe with expected impact on foreign exchange outflows.

The Sub-Saharan Africa presently boasts of over 132 trillion barrels of proven oil reserves, more than eight per cent of the world’s supply. Yet, it exports most of this oil to overseas refineries; which has for long denied the region of the huge opportunity for economic transformation.

The inability of African countries to locally refine its oil has taken a huge toll on their economies, with 48.5 per cent of the region’s population living below $1.25 per day and life expectancy hovering at 56 years. 

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Group Executive Director, Strategy, Capital Projects & Portfolio Development, Devakumar Edwin said at the conference that the refinery would soon come on stream to the benefit of the region whose economy had largely depended on imports from Europe and the west, and that the Dangote refinery will foster regional harmonisation in the distribution of cleaner petroleum products in West Africa.

Edwin, who was represented by the Technical Adviser to the President of Dangote Group on Refinery and Petrochemicals, Engr. Babajide Soyode, expressed belief that the completion of Dangote Refinery and other modular refineries projects across West Africa, would lead to the integration of the downstream industries, and stabilise the prices of petroleum products across the African sub-region.

He emphasised the need for other investors in West Africa to emulate the investment drive of Aliko Dangote in the downstream petroleum sector and make the sub-region an exporter of refined products.  

Edwin also urged investors in Africa to take the bull by the horn by investing in the downstream sector. 

“If Dangote can do it, any investor can do it. Dangote has not waited for government to regulate the downstream sector before starting the construction of the refinery. We don’t need foreign investors to turn around our downstream sector. African investors should be able to emulate Dangote and revive the African downstream petroleum industry,” he said.

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He assured the stakeholders that the refinery is designed to process multiple grades of domestic and foreign crude, which can be converted into high-quality gasoline, diesel, kerosene, and aviation fuels that meet Euro V emissions specifications.

To bridge this gap and ensure cleaner fuel in the sub-region, Dangote Oil Refinery is being designed to accommodate multiple grades of domestic and foreign crude, and process them into high-quality petrol, diesel, kerosene, and aviation fuels that would meet Euro V emissions’ specifications, plus polypropylene. The facility, according to him, would be integrated with a petrochemical unit that will produce polypropylene and fertilisers.

Edwin said Nigeria would soon become the largest exporter of fertiliser in Africa as the Dangote Fertiliser Company is set to commence full production. According to him, pre-commissioning activities have started while construction work is still on-going at the Dangote Refinery site.

Speaking also, the Vice President of the Republic of Ghana, Dr. Mahamudu Bawumia, assured stakeholders in the petroleum downstream industry that the government would create an enabling environment for downstream business to thrive competitively, efficiently and with the highest of safety standards.

“Government, through the Ministry of Energy is in the process of ensuring institutional and regulatory re-alignment of the midstream gas subsector to bring clarity and a degree of certainty to players within that subsector.”

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The GhIPCON is designed to actively bring to the fore the operating industry’s perspective and guidance on issues of governmental and regulatory policy, as well as best practices for the advancement of the industry across West Africa.

The conference witnessed a convergence of about 250 regulators and downstream industry stakeholders from across the West African sub-region and beyond.

On an earlier visit to the Dangote Refinery project, the President of Ghana, Nana Akufo-Addo, whose country has joined the league of oil producing nations, had said Africa could not wait any longer and that Ghana was specifically looking forward to the start of operation of the refinery.

Oil & Gas

FG Awards Licences for 161 Marginal Fields as 13 Remain Dormant

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has awarded Petroleum Prospecting Licences (PPLs) to 161 successful 2020 marginal fields awardees.

The commission also officially unveiled the Host Communities Development Regulations and model Petroleum Prospecting Licences (PPLs).

Chief Timipre Sylva, the Minister of State Petroleum Resources, at the unveiling and licences presentation on Tuesday in Abuja said the maiden presentation of the PPL was part of the implementation of Petroleum Industry Act (PIA), 2021.

This is as the  Federal Government revealed that 13 out of the 30 marginal fields awarded since 1999 were not producing crude oil, as only 17 of the fields were currently meeting the target of crude oil production, adding that a total of N202.91bn was raked in by the government from the just concluded 2020 marginal field bid round.

The award, the government said  was pursuant to the provisions of the Petroleum Industry Act 2021.

This came as successful awardees, such as Matrix Energy Group, Petrogas Energy, among others, promised to begin oil search from the fields in earnest to boost the country’s crude oil production.

In his address at the event, the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, stated that one of the major tasks inherited by the NUPRC upon its inauguration last year, was the need to conclude the 2020 bid round.

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“Consequently, we pursued the matter frontally and are delighted to inform you that the exercise which commenced in June 2020 is being concluded today,” he stated.

Komolafe explained that historically, the marginal fields award initiative began in 1999 and was borne out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.

He said, “Besides, the initiative was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.

“Since its inception, a total of 30 fields have been awarded, with 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010.

He added, “Ten years after, in 2020, 57 fields were put up for bidding. Again, it is noteworthy that the 2020 marginal field bid round exercise in respect of which PPLs are being issued today has attracted government revenue of about N200bn and $7m (N2.91bn at official exchange rate of N415.64/$) respectively.”

Speaking to journalists on the sidelines of the event, the Group Chief Executive Officer, Matrix Energy Group, Adisa Aliu, said successful investors in the bid round would commence oil search as fast as possible.

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Aliu, who’s company emerged successful in the exercise, said the contributions of marginal field operators would help the country in meeting the monthly oil production quota approved for Nigeria by the Organisation of Petroleum Exporting Countries.

For several months running, Nigeria has been failing to meet its crude oil production quota approved by OPEC, a development that has further depleted the country’s revenue from oil.

“We are delighted at the conclusion of this exercise and we are ready to contribute our quota in assisting to meet the target approved for Nigeria and as well help in shoring up revenue for our county,” he stated.

He, however, noted that security should be improved in the Niger Delta, as this had been a challenge to not just the production of crude oil, but to the meaningful progress of the sector.

Meanwhile, the NUPRC in its presentation at the event, stated that the passage of the Petroleum Industry Act had brought an end to the era of marginal field awards.

Section 94(9) of the Act stated that “No new marginal field shall be declared under this Act”.

The agency stated that the Minister of Petroleum Resources shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act.

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It urged the new investors to hit the ground running in developing their awarded assets in line with industry best practices.

“Also, we shall continue to provide a predictable and enabling regulatory environment to operators in line with our technical and commercial statutory

mandates with a view to optimising the development and exploitation of the nation’s hydrocarbon resources,” it stated.

It said it was worthy of note that the average price of crude oil in recent months had been above $100/barrel, adding that investors in the fields should take advantage of this upward swing in market fundamentals, caused by the Russian/Ukraine conflict.

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NEWS

Breaking: Reps Raise Crack Team to Probe Oil Subsidy Regime Under Buhari

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By Ubong Ukpong, Abuja

The House of Representatives yesterday, raised a crack adhoc committee, to Probe the petroleum Products subsidy Regime in the last five years, from 2017 to 2021

The committee was given eight weeks to carryout this investigation and report back to the House for further legislative action.

The decision was sequel to a motion on the “Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021”, brought before the Honda by Hon.

Sergius Ose Ogun.

The lawmaker had said that his motion was informed by section 88 (1) and (2) of the Constitution of the Federal Republic of Nigeria (As Amended) , which empowered the National Assembly to conduct investigations into the activities of any authority executing 

or administering laws made by the National Assembly;.

He also noted that Section 32 of the Petroleum Industry Act, 2021 saddled the Petroleum Midstream and 

Downstream Regulatory Authority with the task of regulating and monitoring technical and commercial 

midstream and downstream petroleum operations in Nigeria.

Ogun informed the House that as of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day in order to enable it to provide petroleum products for local consumption.

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He was concerned that as at 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per 

day, however, their capacity utilization began to nosedive and eventually fell completely to zero due to the 

ineffectiveness and alleged corruption of critical stakeholders in the value chain.

The lawmaker said he was aware that due to the decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.

He said he was further aware that component costs in the petroleum products subsidy value chain claimed by the NNPC was highly over-bloated while the transfer pump price per litre used by the NNPC in relation to PPMC was 

underquoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per 

litre translates into over 70 billion naira a month or 840 billion naira a year.

The legislator worried that the consumption rate of Premium Motor Spirit (PMS) was 40million to 45million litres per day, however, the NNPC used 65 million to 100 million litres per day to determine subsidy as discoverable 

from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).

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He also worried that the subsidy regime has been unscrupulously used by the NNPC and other critical 

stakeholders to subvert the nation’s crude oil revenue to the tune of over 10 billion US dollars, with records 

showing that as at 2021, over 7 billion US dollars in over 120 million barrels have been so diverted.

The lawmaker was disturbed that “there exists evidence that subsidy amounts are being duplicated, thus subsidy is charged against petroleum products sales in the books of NNPC as well as against crude oil revenue in the books 

of NAPIMS to the tune of over N2 trillion.”

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Oil & Gas

Wabote Tasks Security Agencies on Enforcement of Nigerian Content in Oil and Gas Sector

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From Tayese Mike, Yenagoa

The Nigerian Content Development and Monitoring Board (NCDMB) has tasked security agencies in the country to intensify their efforts in the enforcement of the Nigerian Content in the oil and gas sector in other to boost the local participation in the sector.

Executive Secretary of the board, Engr Simbi Wabote, stated this during a sensitization workshop for law enforcement agencies on the approach to Nigerian Content enforcement in the oil and gas industry yesterday in Yenagoa.

He explained that the workshop becomes imperative to sustain the achievements made by the board in boosting indigenous participation in the oil and gas industry.

He said it was significant to enlighten stakeholders on how to encourage the indigenous participation in the oil and gas sector.

“With the results we have been able to achieved in boosting indigenous participation in the oil and gas industry, it is pertinent to enlighten law enforcement agent on how to enforce the NOGIC act.

“We have custom, EFCC, ICPC, DSS, and these are all law agents that all have a role to play as we implement the NOGIC act, that is why we schedule the workshop,” he said.

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Head, Legal Services of NCDMB, Barrister Naboth Onyesoh, said the essence of the workshop was to bring in relevant stakeholders to support local content in the implementation and enforcement of the Nigerian Content act.

The workshop is part of the national economic agenda gear towards employment, creating industrialization, ensuring capital retention in the country and so many other activities revolving around the oil and gas industry.

Representatives of the security operatives from Nigerian Army, Customs, police, EFCC, ICPC, DSS, and several others attended the workshop.

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