Oil Firms Showcase Over $50bn Industry Projects at Local Content Fair
From Mike Tayese, Yenagoa
Oil and gas opportunities valued over $50bn and projected to be developed within five years were showcased by international and indigenous companies at the 2023 Nigerian Oil and Gas Opportunity Fair (NOGOF), which ended on Friday, at the conference hall of the Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, Bayelsa State.
In a speech at the conclusion of the two-day fair, which drew 1,086 registered participants, the Executive Secretary, NCDMB, Engr.Simbi Kesiye Wabote stated that the quantum of opportunities covered different segments of the industry and required proper collation as they run into billions of dollars.
He said, “some of the opportunities are from the indigenous players, some by NNPC Ltd and the international oil companies. If you put them together, in the next 5 years, they would exceed $50bn that would be invested in the Nigerian oil and gas industry”.
Listing a few of the opportunities and their values, he said: “Bonga Southwest which Shell talked about is almost about $7bn to $8bn. Shell also talked about Bonga North which they might take final investment decisions (FID) early next year and is almost $3bn.”
On steps to be taken by interested service companies and other players to participate effectively in those projects and opportunities, Wabote charged such firms to prepare themselves adequately, restating that the oil and gas industry is highly technical and does not compromise safety and standards.
“If someone gives you projects he intends to execute in the next two years; Nigerian companies having listened to the opportunities should go back and continue to build their capacities in readiness to actively participate.”He also counseled that the oil and gas sector is not an environment where an entrepreneur can immediately step in and achieve success. “You must have staying power to succeed,” he also said.
The NCDMB helmsman promised that the Board will collate the opportunities into a compendium and make them available to registered participants. He confirmed that the Board tracks the development of the opportunities showcased at every edition of NOGOF. Providing an update of projects shared at previous editions and hinted that “most of them have come to fruition, others are challenged by security concerns, final investment decisions (FID) challenges, bankability, and regulatory requirements and approvals.
But those that have crossed the hurdles have been developed and are producing today.” He added: “We shared Ikike and today it is almost doing 50,000 barrels per day; we shared Nigeria LNG Train 7 almost 6 years ago and today it is in full steam, hoping to be completed in 2026. We shared the upstream opportunities that will feed into Train 7, HI, HA and Obeta projects. This has been a tremendous success by NCDMB.”
On other conditions necessary for the speedy development of oil industry projects, Wabote canvassed for the eradication of policy inconsistencies. He advised other regulatory bodies in the industry to conclude the formulation and release of key regulations that will serve as subsidiary legislations of the Petroleum Industry Act (PIA), to give investors the necessary confidence to move ahead.
He equally challenged relevant agencies to address the worrisome security challenges, particularly the wanton crude oil theft in the Niger Delta. This will enable the production of hydrocarbons at reasonable costs and profitability, he opined. He regretted that most indigenous operators were unable to evacuate their crude oil through pipelines for over one year and are now forced to explore alternative options at high costs.
Speaking further, the NCDMB boss affirmed that Nigerian content has come of age, recalling the past when expatriates dominated major operations and events of the industry and Nigerians played second fiddle. He expressed delight that indigenous firms have become highly competitive and dominant in the service sub-sector – upstream, midstream and downstream.
The 4th edition of the fair was attended by leaders of the oil and gas industry, including the Group Chief Executive Officer of the Nigerian National Petroleum Company Ltd, Mallam Mele Kolo Kyari, Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor, chief executives of several international and indigenous operating and service oil and gas companies and other stakeholders.
It featured opportunities and technical sessions in which representatives of several operating and service companies and regulatory agencies made presentations on their plans and projects, among others. The next edition of NOGOF is slated for 2025.
CBN Debunks Report of Naira Devaluation
By Tony Obiechina, Abuja
The Central Bank of Nigeria (CBN), has debunked a newspaper report to the effect that it has devalued the Naira to 630/$1.
Reacting to the report in a statement on Thursday CBN Acting Director of Corporate Communications Department, Dr Isa AbdulMumin said the story was an outright falsehood.
The statement reads:
“The attention of the Central Bank of Nigeria (CBN) has been drawn to a news report by Daily Trust Newspaper of June 1, 2023, titled “CBN Devalues Naira To 630/$1”.
“We wish to state categorically that this news report, which in the imagination of the newspaper … is replete with outright FALSEHOODS and destabilizing innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters’ (I&E) window traded this morning (June 1, 2023) at N465/US$1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market.
“Media practitioners are advised to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public”.
NEITI Hails Fuel Subsidy Removal, Offers Eight Strategic Considerations
The Nigeria Extractive Industries Transparency Initiative (NEITI) has lauded the political will and sincerity of purpose demonstrated by President Bola Tinubu in removing fuel subsidy.
A statement from NEITI House, Abuja on Tuesday, described the move as a positive move by the administration to decisively implement the findings and recommendations contained in the NEITI reports.
The statement, signed by Mrs Obiageli Onuorah, the Deputy Director/Head Communications and Stakeholders Management, said bold step was required to block leakages, grow revenues and advance the ongoing reforms in the oil, gas and mining industries.
President Bola Tinubu, in his inaugural speech on Monday, said the fuel subsidy regime had ended with the commencement of his administration.
Onuorah recalled that its recommendations for the removal of fuel subsidies have remained a persistent request since 2006 given the agency’s concerns about the huge financial burden that the subsidy regime imposed on the growth of the Nigerian economy over the years.
She explained that from the NEITI reports, between 2005 and 2021, the country spent $74.39 billion which translated to N13.69 trillion on subsidy.
According to the NEITI report, a breakdown of these figures showed that in 2005, the government paid $2.6 billion dollars (N351 billion) as subsidy. In 2006 and 2007, it paid $1.99 billion and $2.18 billion (N257 billion and N272 billion) respectively.
The report further pointed out that subsidy payments more than doubled in 2008 and 2010 and witnessed the highest increase ever in 2011 to $13.52 billion (N2.11 trillion).
She said a sharp decline was witnessed in the years 2012, 2013, 2014 and 2015 when it dropped to $3.34 billion (N654 billion) in 2012.
Onuorah said the decline in subsidy expenditure continued in 2016 and 2017 to as low as $473 million dollars (N154 billion) in 2017.
“The reduction was short-lived as the payments skyrocketed to over $3.88 billion (N1.19 trillion) in 2018 and 2021 to $3.58 billion (N1.43 trillion).
“By these figures, Nigeria expended an average of N805.7 billion annually, N67.1 billion monthly or N2.2 billion daily,” she said.
She said the NEITI data also showed that the amount expended on subsidies from 2005 to 2021 was equivalent to the entire budget for health, education, agriculture and defence in the last five years.
Onuorah added the sum equals the capital expenditure for 10 years between 2011 to 2020.
The deputy director explained that it was during this time (2011) that fuel subsidies dwarfed allocations to all critical areas of the economy.
“NEITI ‘s persistent calls for the removal of petroleum subsidies were informed by the fact that the ways of funding the expenditure over these years relied more on federation accounts funds, the Federal Government and sometimes from external borrowing with negative consequences on government overall revenue profiles.
“NEITI was also concerned that the consequences of funding subsidies have resulted in poor development of the downstream sector, declining GDP growth, rise in product theft, pipeline vandalism, environmental pollution and undue pressure on foreign exchange.
“Other challenges imposed on the economy were naira depreciation, low employment generation, the declining balance of payments and worsening national debt,” she said.
Onuorah said in a policy advisory released by NEITI in late 2022 to drive home the urgency to remove subsidy and resubmitted earlier in the year 2023, NEITI recommended eight steps to manage subsidy removal.
She listed the steps to include the urgency to strengthen the implementation of the Petroleum Industry Act (PIA) as a whole and not in parts.
NEITI also underlined the importance of unveiling the implementation of people-oriented welfare programmes to provide relief for the poor and vulnerable and advised on priority attention to be paid to the rehabilitation of the nation’s four refineries currently ongoing.
On other policy considerations, she said government should commission a special report on actual PMS consumption in Nigeria, enforce stringent sanctions for criminal activities in the sector and conduct appropriate stakeholders’ consultations, engagements and enlightenment. (NAN)
Subsidy Removal: PMS Price Jumps to N537 Per Litre
Following Monday’s removal of fuel subsidy by President Bola Ahmed Tinubu, the Nigerian National Petroleum Company Limited (NNPCL), yesterday jerked up pump prices of petrol, also known as Premium Motor Spirit (PMS) from N195 per litre to 537 per litre at its fuel stations nationwdie.
According to a statement signed by the NNPC Ltd’s Chief Corporate Communications Officer, Garba Deen Muhammad, the increment is part of measures to provide the public with quality service.
The statement also said that the NNPC Limited is committed to ensuring a ceaseless supply of products.
“NNPC Limited wishes to inform our esteemed customers that we have adjusted our pump prices of PMS across our retail outlets, in line with current market realities.
“As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.
“We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products.
“The company sincerely regrets any inconvenience this development may have caused.
“We greatly appreciate your continued patronage, support, and understanding during this time of change and growth,” the statement read.
According to a new price template disclosed by NNPLC yesterday, Lagos State has the least price of N488 per litre, while Maiduguri and Damaturu have the highest pump prices of N577 per litre.
Yesterday, most filling stations in the nation’s capital, Abuja, had adjusted to the new pump price.
Similarly, pump prices had been adjusted across the states.
For instance, in Benue State, the fuel price had been adjusted to N537 per litre.
The price adjustment represents an over 200 per cent increase.
The implication is that nearly all prices of goods and services would drastically increase.
The development is coming barely two days after President Bola Ahmed Tinubu’s inaugural speech, where he said fuel subsidy would be removed.
In the first half of 2023, Nigeria spent N3.6 trillion on fuel subsidy alone.
The country will save close to N6.7 trillion if fuel subsidies payment is discontinued.
Nigeria has spent N13.7 trillion on fuel subsidy in the last 13 years, according to Nigeria Extractive Industries Transparency Initiative.
NLC Kicks over Price Increase
The umbrella body of labour unions in the country, the Nigerian Labour Congress (NLC), yesterday fumed over the adjustment of pump prices by the Nigerian National Petrol Company Limited (NNPCL).
Barely 48 hours after President Bola Tinubu announced an end to the subsidy era during his inaugural speech at Eagle Square, Abuja on Monday, the NNPCL confirmed the hike in the pump price of Premium Motor Spirit also known as petrol.
Since the presidential pronouncement, fuel queues have resurfaced across the country as Nigerians forage for the premium product which was rose from around N185 per litre to between N400 and N600 per litre.
Worried by the situation, the NLC President, Joe Ajaero, issued a statement expressing worry that the national oil company would announce an increment.
Describing the development as unfortunate, Ajaero said the NNPCL’s action was coming on the heels of an ongoing meeting with stakeholders in the oil and gas sector to manage the unilateral but unfortunate announcement by the President.
“It is therefore unacceptable and we seriously condemn it. Good faith negotiation is key to reaching agreement. What the government has done is like holding a gun to the head of Nigerian people and bringing undue pressure on the leaders thus undermine the dialogue,” the NLC President said.
“We call on the federal government to immediately instruct the NNPC to withdraw this vexatious Pricing template to allow free flow of discussions by the parties. Nigerians would not accept any manipulations of any kind from any of the parties especially from the representatives of the Government.
“Our commitment to this process is buoyed on the fact that all the parties would be committed to ensuring that it is carried out within the ambits of liberty without undue pressure. The release of that Template may not allow us to continue if nothing is done to withdraw it so that the dialogue can continue unhindered. It is clear that Government is actually trying to scuttle the process.”
IPMAN Sanctions over 100 Petrol Stations for Price Violation
The Independent Petroleum Marketers Association of Nigeria (IPMAN), has said that over 100 petrol stations have been sanctioned for increasing pump prices.
National Spokesperson of the Association, Yakubu Suleiman, disclosed this yesterday.
Briefly after President Bola Tinubu’s speech on May 29 that the petrol subsidy has been cancelled, panic buying erupted in some parts of the country as some marketers closed shops, leading to large queues in filling stations across the country.
In Lagos, Abuja, and other parts of the country, it was observed that since May 29, some filling stations ceased operations; while those that dispensed petrol increased prices.
Speaking in an interview with Channels Television yesterday, Suleiman said there is a penalty for filling stations increasing pump prices, adding that over 100 sanctions have been placed on defaulters.
“We have a task force that goes around all the filling stations in the country and I want to assure you that they are there, working right from yesterday,” he said.
“Any filling station caught increasing the price just because of this announcement, there has to be a penalty against such stations. We sanction those who default. We close the stations. Our task force is there doing its job.
“As of yesterday, more than 100 filling stations have been sanctioned. Some of them, when we go through their reports, are not real petroleum marketers. Real ones cannot go against the rule of their administration.”
Mike Osatuyi, the national operations controller of IPMAN, had earlier told TheCable that the reflexive action of customers who wanted to stock up on cheap petrol before the price of the product increased, was to be blamed for the unprecedented level of queues.
He advised that, although there is currently enough petroleum stock to supply the nation, there would be a price increase eventually.
Meanwhile, the representatives of the federal government are expected to meet with the leadership of the Nigeria Labour Congress (NLC) today, over the planned removal of the petrol subsidy – the root cause.
NMDPRA: We’re Ready to Issue New Petrol Import Licences
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said it is ready to issue licences to companies interested in petrol importation.
Speaking to newsmen on Tuesday, Farouk Ahmed, chief executive officer of NMDPRA, said the criteria for importing kerosene and diesel will be applicable for the importation of the product.
However, Ahmed said several conditions have to be met before the applicants are granted licences.
“There are a lot of conditions to be met before you are given a licence to import petrol,” he said.
“I cannot give you all the rundown now but I can tell you that just the way marketers import diesel or jet kero, there are conditions for all that and the same condition will apply to those who want to import premium motor spirit (PMS).”
Only companies that are lessees producing crude oil and/or condensates or who are holders of crude oil refining licences are eligible to supply wholesale petroleum liquids (including petrol importation), according to section 197 (2) of the Petroleum Industry Act (PIA) 2021.
While the PIA empowers the NMDPRA to issue licences to refiners or producers of crude oil, the regulation, in sections 73 (3) and 111 (1), provides that the minister of petroleum must approve such licences.
Currently, the Nigerian National Petroleum Company (NNPC) is the last-resort supplier, tasked with importing refined petrol to ensure adequate supply and distribution in the country.
Through the direct sale, direct purchase (DSDP) scheme, the country exports crude oil and exchanges it for refined petroleum products.
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