Oil & Gas
Senate to Review Law on Oil Production Sharing Contract
The Senate has mandated its Committee on Petroleum Resources Upstream to come up with a bill on amendment of the Inland Basin Production Sharing Contract (PSC) Act.
This followed the adoption of a motion by Sen. Ifeanyi Ubah, (YPP Anambra) and 30 others at Wednesday’s plenary.
The motion was on the urgent need to review Production Sharing Contract (PSC) in line with section 16 of the deep offshore and inland Basin Production Sharing Contract Act CAP D3 LFN 2004 and amend the extant Act.
Moving the motion, Ubah said the committee on petroleum resources upstream had been inundated with petitions and complaints on the PSC.
He said Federal Government over the years had lost billions of dollars in potentially accruable revenue due to non-review and amendment of the salient provisions of the PSC Act.
He said in spite of huge contributions of the PSC to total oil production, the contributions of revenue per barrel of PSC for federal government’s take had been significantly low.
This, he said was because of the inherent inequitable terms in the PSC and failure to review the salient provisions of the act.
According to him, PSC Act provides that where the price of crude oil exceeds 20 dollars per barrel, the Act will be reviewed to ensure that federal government share in the additional revenue is adjusted.
He also said that the act provided that it may be reviewed after 15 years from the date of its enactment in 1993 and every five years thereafter.
According to him, the non- review of the Act over the years had led to loss of 21 billion dollars to Nigeria.
He said Nigeria stand to gain additional N30 billion monthly if the Act is reviewed and amended.
This, Ubah said would boost the nation’s revenue profile.
Contributing, Sen. George Sekibo, (PDP-Rivers), said the PSC was an additional opportunity for Nigeria to make money, adding that there was an urgent need to review the Act.
He said cabals in the oil sector were frustrating attempts to review the Act over the years.
Other senators, who supported the review, were Stella Oduah, Rochas Okorocha, Adamu Alerio, Gabriel Suswam among others.
The senate in its resolution also mandated its committee on petroleum resources upstream to investigate reasons for failure to review the Act over the years.
In his ruling, President of the Senate, Dr Ahmad Lawan said the bill for the review of the Act would be presented for second reading in the next legislative day.
He urged the senate to give the PSC amendment bill expeditious debate and passage when presented.
He maintained that the bill if passed would help the country to generate fund to support execution of the budget.
The News Agency of Nigeria (NAN), reports that PSC is a contractual arrangement for petroleum exploration and production.
This is whereby the state as owner of the petroleum engages a contractor to provide technical and financial services for exploration and production operations with agreed share in profit after payment of royalty, cost and tax.
The contractual agreements were offered by the federal government in 1991 leasing round and its terms codified into legislation.
Nigeria presently has seven oil fields from the 1993 PSCs.(NAN)
KC/AMM/ABI
Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) on Monday raised alarm over the plan by Dangote Refinery to start direct nationwide distribution of petrol and diesel.
In a statement issued on Monday, PETROAN spokesperson, Mr Joseph Obele, said the move by Dangote could have consequences on the country’s downstream sector,
According to him, such consequences include widespread job losses and the shutdown of small businesses.
On June 15, Dangote Refinery disclosed its plan to distribute petrol and diesel directly to consumers across Nigeria.
Reacting to this development, PETROAN National President, Dr Billy Gillis-Harry, warned that such strategy could create a monopolistic market structure, stifling competition and threatening thousands of livelihoods in the sector.
“With a production capacity of 650,000 barrels per day, Dangote Refinery should be positioning itself to compete with global refiners rather than engaging in direct distribution within Nigeria’s downstream sector,” Gillis-Harry said.
He stated that this move undermines the survival of independent marketers, truck owners, filling station operators, and modular refinery operators who rely on the existing supply chain structure.
Gillis-Harry noted that Dangote’s dominance could lead to higher fuel prices due to reduced competition and business closures across the fuel retail landscape.
The president said that the situation could also lead to massive job losses among truck drivers, petroleum product suppliers, and station operators
He cautioned that the introduction of 4,000 new Compressed Natural Gas (CNG)-powered tankers by Dangote, which might lower transportation costs, could pose a threat to the jobs of traditional tanker drivers and owners.
“Filling station operators, truck owners, telecom diesel suppliers, and modular refineries are all at risk.
“Dangote’s approach could trigger a pricing penetration strategy aimed at capturing market share and forcing competitors out of the market,” Gillis-Harry added
The PETROAN boss said that Dangote’s market influence might allow for price setting that could disadvantage consumers, noting similar patterns in other industries where the conglomerate operates.
Gillis-Harry, therefore, urged the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to urgently introduce price control mechanisms and enforce fair competition policies.
“Competition must be protected and encouraged to safeguard consumers, preserve jobs, and maintain a healthy petroleum distribution ecosystem,” he stressed. (NAN)
The Nigerian National Petroleum Company Limited (NNPC Ltd.) has announced a revenue of N5.89 billion and a Profit After Tax (PAT) of N748 billion for the month of April.
The NNPC Ltd. disclosed this in its Monthly Report Summary for April, released on Thursday.
The report highlights key statistics, including crude oil and condensate production, natural gas output, revenue, profit after tax and strategic initiatives during the period.
The report said that NNPC Ltd made statutory payments of N4.
22 billion between January and March.According to the report, crude oil and gas figures are provisional and reflect only NNPC Limited’s data.
It said that It excluded volumes of independent operators reported by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“Crude oil and condensate production averaged 1.606 million barrels per day (bpd) in April, while natural gas production was 7.354 million standard cubic feet daily.
“Petrol availability at the NNPC Ltd. retail stations recorded 54 per cent during the month under review, while upstream pipeline reliability was 97 per cent,” it said.
On its strategic efforts, it said that the company was collaborating with Venture Partners to accelerate Sustainable Production Enhancement.
It said that it completed the implementation of relevant presidential directives and Executive Orders for its upstream operations.
The report listed some Technical Interventions on Ajaokuta-Kaduna-Kano (AKK) pipeline and the Obiafu-Obrikom-Oben (OB3) gas pipelin to resolve challenges of River Niger crossings.
It said that the OB3 gas pipeline project was 95 per cent completed in the month, while the AKK pipeline was 70 per cent completed.
The report said that Turnaround Maintenance (TAM) was completed in several Oil Mining Leases (OML), including OML 18, OML 58, OML 118, and OML 133.
On Refineries Status, it said that the Port Harcourt Refinery Company (PHRC), as well as the Warri and Kaduna refineries were currently under review.
According to the report, all financial figures are provisional and unaudited, and all operational and financial data are for April unless indicated otherwise. (NAN)
The Nigerian National Petroleum Company Limited (NNPC Ltd.) has disowned a fake AI-generated video circulating on social media featuring a cloned voice of the Group CEO, Mr Bayo Ojulari, promoting a fictitious poverty alleviation scheme.
The Chief Corporate Communications Officer, NNPC Ltd.
, Olufemi Soneye in a statement on Thursday clarified that the company had no such investment initiative.Soneye urged the public to disregard the video, originally shared by an account named Mensageiro de Cristo on Facebook.
“NNPC Ltd. has warned the perpetrators to cease their fraudulent actions or face legal consequences,” he said. (NAN)
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