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New NNPC Boss, Kyari, Speaks Tough on Corruption

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Malam Mele Kyari
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By Mathew Dadiya, Abuja 

The new Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC) Mallam Mele Kyari, on Tuesday, said his administration will automate all the NNPC systems to stamp out corruption in the sector.

He made this known to journalists after he met behind closed doors with President Muhammadu Buhari.

Kyari assumed office on Monday, after a formal handing over ceremony by the immediate past GMD, Dr. Maikanti Baru at the NNPC Towers.

The new GMD who spoke to State House correspondents on Tuesday, alongside his predecessor, Dr. Baru, said that he was aware of the enormous responsibility before him and promised not to disappoint President Buhari and the country on the confidence reposed in him.

He said that he would work closely with the Economic and Financial Crimes Commission (EFCC) to fight corruption in the corporation.

“We are going to work with EFCC and other institutions. Institutions that are involved in controlling and contending any form of corruption in our system.

“This is in line with Mr. President’s cardinal principle to contain corruption so that this country can benefit from its resources.

“There will be corruption where there is no discretion. So we will automate our systems and processes so that discretion is reduced to the barest minimum.

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“We need the help of the EFCC wherever we see infractions in our systems,” Kyari added.

On the expected responsibility, he said, “It is clear, I was part of the team that has been working assiduously since he (former GMD) resumed office.”

He boasted that he understood the gravity of the assignment given to him, the trust associated with the work and the high expectations of Mr President for them to make the corporation a global brand of excellence and to deliver to the citizenry the benefits of the oil and gas industry.

Speaking further, Kyari said: “We are focused on ensuring that we deliver this in the shortest possible time and in the most efficient way. I assure all of us that we will do this work with integrity. I will ensure that by 2023 Mr. President will look back and confirm that he has not misplaced his trust first of Dr. Baru and transferring it to us is a testament of the confidence Mr. President has for the corporation.

“We will make sure at the end of the day that the corporation becomes an integrator of the economy.”

Also speaking, Baru said it was his expectation that the new management of NNPC would do more than double what he did.

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He said, “I am not setting a high target for them but I know this team are the jet factor fellows, that will zoom up, dive, come back and steady the corporation and make sure it becomes definitely the largest in Africa and make serious contribution to Nigeria’s economy.

“We expect where we have stabilize the supply of fuel to the economy, they will make sure they start exporting products to Neigbouring countries. I am so convinced that this team will deliver.

“The purpose of coming to see Mr. President is to carry out a symbolic handover of the new team led by Mallam Melee Kyari to Mr. President.

“No matter what we did in terms of transition, they have their own programmes and vision of what they want to do. We are now the airbus pilots that are relaxing and cruising at an altitude and you cannot give them a vision of the jet fighter pilot that the NNPC requires.

“They will engage Mr president at the appropriate time and get his blessing. I spent 1,099 days on the saddle of the corporation and can’t wait to present young vibrant team.”

On involvement of private marketers in kerosene products, Baru gave reasons the corporation allowed private marketers to be involved.

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He said: “Kerosene is all over now. When we came there was so much difference between what we were selling kerosene and what was available. Fuel at depots when we came on board was N76 per liter but it was settling between 250-300, so the common man was not getting the kerosene.

“So all what the government and NNPC was doing was bleeding and we resolved to make it available. That was why we invited the private sector to come in; NNPC stepped back and they were selling at N210 per liter.

What we did was to allow the market forces to determine the price.”

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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