…….Tasks oil industry stakeholders on innovation, technology

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that following the recent significant oil discovery in the Kolmani area of the Upper Benue Trough, the Corporation sees higher prospects in other frontier basins based on current understanding.

He said it the exploits and successes in the Upper Benue Trough by the Corporation were achieved through the deployment of the most recent techniques and technologies and the efforts of in-house geoscientist and other petroleum experts.

Delivering a keynote address at the 37th National Association of Petroleum Explorationists (NAPE) Conference & Exhibition in Lagos on Tuesday, Kyari called on oil and gas professionals in the country to embrace the culture of innovation and technology towards transforming the Industry and by extension improving the nation’s economy.

The GMD who spoke on the theme: Enabling Nigeria’s Petroleum Landscape: Digitalisation, Innovation & Emerging Technologies, said for the Industry to be transformed, professionals in the sector must collaborate and make digitalization a priority, invest in human capital development programmes, optimize the use of Industry data platforms as well as invest in the oil and gas collaborative ecosystem.

According to him, Nigerian national oil company is committed to leading the change in transforming the sector through various initiatives and partnerships in the roadmap to becoming an integrated energy corporation delivering value to its various shareholders.

“As part of our current strategy, NNPC will strive to grow our reserves, increase oil production, rehabilitate the refineries, ensure availability of petroleum products and attain net exporter status,” the GMD stated, adding the industry must urgently take advantage of the opportunities derived from big data digitalization and emerging new technologies in the course of its operations.

Kyari described the recent amendment made to the nation’s Deep Offshore Act (DoA) as long overdue, pointing out that there was nothing to worry about by any stakeholder in the Industry. He maintained that Nigeria remained a viable option for investors as the success rate for finding oil are very high, especially in the Niger Delta region.

He called on Industry stakeholders to support the government towards the passage of the petroleum industry legislation, which he described as necessary for stable and sustainable investment promotion. He said with the reality of reserves depletion in the country, there was the need for NAPE to galvanize industry leaders and partners to embrace exploration for more oil and gas reserves and for the members to deploy their abilities to ensure successful campaigns.

He said right from its inception in 1977 to date, NNPC had continued to transform its business and organizational perspectives to align with changing business realities through strategic partnerships with various stakeholders across the entire business value chain.

Earlier in his address, NAPE President, Ajibola Oyebamiji, commended NNPC for its success in oil exploration in the Gongola Basin, a development which he said had challenged exploration professionals in the country to work harder towards contributing their quota in the quest to grow the nation’s reserves.

He also called for the speedy passage of the Petroleum Industry Bill to enable clear roles for all stakeholders, attract investment and make businesses thrive. “Our reserves and production targets will be very difficult to meet when such enabling policies are not in place,” Oyebamiji added.

By Chibisi Ohakah

The African Export and Import Bank (AFREXIMBANK) has expressed interest in participating in the refinancing of critical projects in Nigeria’s oil and gas industry, including the Ajaokuta-Kaduna- Kano (AKK) pipeline system.

The bank’s executive vice president, Mr. Amr Kamel, made the proposal when he led his management team on a business delegation to the Nigerian National Petroleum Corporation (NNPC) headquarters in Abuja recently. He said the African Export and Import Bank (AFREXIMBANK) is ready to finance critical projects I in the refineries rehabilitation, downstream infrastructure, including pipelines.

Kamel said the bank’s management team thought it imperative to interact with NNPC, being a key player in one of the most viable sectors of the Nigerian economy which is the largest in Africa, with a view to seeking collaboration on ways to further grow the oil and gas sector.

The NNPC group managing director, Mallam Melle Kyari, in his response, thanked the bank for their desire to participate in the Nigerian oil and gas industry. He assured them that the Nigerian national company will be happy to partner with them in the growth plans of the President Muhammadu Buhari administration, adding that the NNPC is open to financial and technical partnership with reputable financial institutions like the AFRIXIMBANK to develop the Industry.

“We have a number of financing needs, it depends on how much you are bringing to the table. We need support particularly in refineries rehabilitation, depot optimization and pipelines financing”, the GMD stated. He assured the team of his readiness to work with the bank, adding: “We will provide you with basic information. We are ready to talk to you”.

By Chibisi Ohakah

Nigerian Petroleum Development Company (NPDC), an Upstream Subsidiary of the Nigerian National Petroleum Corporation (NNPC), has disowned a recruitment exercise being orchestrated by miscreants employing text messages, social media platforms and forged letterheads to achieve their nefarious aim.

The company in a statement last weekend warned unsuspecting members of the public to be wary of the activates of the fraudsters, saying recruitment exercise was the prerogative of the NNPC Corporate Headquarters in Abuja. It explained that members of the public should note that NNPC would always advertise vacant positions at appropriate times, advising that applicants should be properly guided.

‘’Anyone contacted for the purpose of the purported recruitment other than through advertisement duly placed by the corporation in national newspapers should not hesitate to report such invitations to the relevant law enforcement agencies,’’ the statement said.

By Chibisi Ohakah

A total of 251 firms has been confirmed as submitting bids for insurance broker for oil assets while 253 firms submitted bids for non-oil assets for the Nigerian National Petroleum Corporation (NNPC).

The group managing director of NNPC, Mallam Mele Kyari, has also called on insurance brokerage firms that participated in the expression of interest to insure NNPC’s oil and non-oil assets to be wary of anyone who would promise to help them win the bid as the corporation does not operate in such a shady manner.

The GMD gave the warning Thursday at the NNPC Towers, Abuja, during a public opening of bids for insurance broker for NNPC Oil/Non-Oli Assets and Liability For The Year 2020/2021.

“I want to put it on record today that anybody that promises you that he is going to help you win this bid is a liar, a fraud. If you know anyone who makes such claims, please let us know so that we can take appropriate action”, Kyari charged representatives of the insurance brokerage firms.

He assured the firms that the evaluation and selection process would be transparent and accountable in keeping with the corporation’s Transparency, Accountability, and Performance Excellence (TAPE) agenda.

He there would be a level playing field for all the bidders to guarantee the emergence of the best among them based on their respective track record and commitment to excellence. 

He stated that NNPC was desirous of engaging reputable and competent professional brokers that could provide unparalleled and exceptional valuation and insurance services to sustain its drive for excellence service delivery.

Also speaking at the event, Group General Manager, Risk Management and Insurance Division, Mr. Mustapha Muhammed, noted that the bid opening was conducted in the full glare of representatives of the bidding companies and other stakeholders to demonstrate NNPC’s commitment to transparency and due process in all its operations.

Some representatives of the bidding firms also expressed their satisfaction with the conduct of the exercise.

By Chibisi Ohakah

……Border Town Energy, Telecom Service, Others At Risk

Operatives of the Nigeria Customs Service (NCS) are believed to have commenced a nationwide crackdown on delivery tankers belonging to the Independent Petroleum Marketers Association on Nigeria (IPMAN) caught offloading petroleum products in some Nigerian border towns.

Officials of IPMAN, on other hand, have threatened to disrupt petroleum products supply nationwide if the Custom officials fail to release the arrested trucks, and discontinue further arrests of their members’ vehicles. 

Last Wednesday, the Nigerian Senate Committee on Customs extended summon to the Customs Service boss, Col. Hameed Ibrahim Ali (Rtd), for an interaction on the fuel supply situation in the border towns of Nigeria. This followed the recent directive by the Muhammadu Buhari administration for closure of the Nigeria border

The Senate had resolved midweek to engage the Comptroller General of Nigeria Customs Service (NCS) to work out a viable policy framework to mitigate the sufferings of communities along the nation’s borders due to suspension of petroleum supply to the areas.

The Service last week issued a directive suspending supply of petroleum products to fuel stations within 20 kilometers of Nigeria’s border as a measure to check smuggling of the products.

However, the Senate called for a steady supply of petroleum products through the identified suppliers and registered filling stations across all Nigeria’s border towns and communities as a temporary palliative measures.

The marketers who complained of the arrests vowed to resist the action, hinting that the NCS action may likely disrupt effective and efficient products distribution and sales not only along border communities but in most parts of Nigeria.

Chairman of IPMAN, Mr Akin Akinrinade, explained in an interview that the trucks had already loaded at different depots in the state and about discharging products at their designated destinations before the suspension order of products sale at communities near the border was made.

He said that anything setting the arrested tankers free will unsettle smooth operations of the marketers who he said obtained bank loans to buy the products.

“These trucks have already been designated to discharge products and are on transit while some are about discharging at the stations before they were impounded. If you consider the cost, you will see how much a marketer would be losing at the end. For each truck the ex-depot price is N4,398 397.50 and the facility is obtained from the banks and we have stipulated time to offset the loan.”

The chairman said the Union will not tolerate the unwholesome action of the Nigeria Customs Service. “We don’t want to make life difficult for Nigerians especially at this festive period but again we will not be liked to be pushed to react in such a way that the public will begin to suffer. We want the Customs to immediately release our trucks while we call on government to address institutional failures that has led to products smuggling.

The chairman warned that if the situation is not changed they may have no option but down size their workforce which will not be in the interest of the economy. He also said telecom companies may soon face challenges powering their base stations as gas supply may begin to wane.

By Chibisi Ohakah

Comptroller General of the Nigeria Customs Service, Col Hameed Ali (Rtd) has sought the permission of lawmakers in the House of Representatives to return erstwhile import taxation on petroleum products.

At the budget defence of the Nigerian Customs Service (NCS) before the House Committee on Customs midweek, the retired soldier said it had become imperative to reintroduce the tax regime in line with global best practices. The federal government in 2004 suspended the tax on imported petroleum products. Before the suspension, a tax of N1.50 per litre of any petroleum product was paid by importers of fuel.

Ali noted that currently, the same type of tax was being implemented in about 36 countries at an average of $2.24 per gallon. “The petroleum tax regime of 2004 before its suspension imposed N1.50 per litre. It is the considered opinion of the Service that this regime be reintroduced in line with international best practices as it’s currently operational in over 36 countries at an average of $2.24 per gallon.”

The Custom boss also stated that he had forwarded a proposal for a downward review of vehicle tariff to the finance ministry for consideration. He said the Service was proposing that Customs duty on imported vehicles should remain 35% while the levy be reduced from the current 35% to between five and 10%.

According to him, the proposal, if approved, will encourage compliance and boost revenue as the 70% import duty and levy is encouraging smuggling of vehicles. On the issue of porous border, Ali said Nigeria has about 4,070km of land, adding that in the dry season, the entire part of the North is usually accessible by road.

He said the service was currently working with the Nigerian Air Force on the deployment of geospatial technology so as to check the trend. He added, “That is why you see motorcycles ferrying rice every now and then as shown in some videos. That is why we want to leverage technology to deal with it. Mr President has already approved e-Customs. We’re working with the air force on geospatial technology that will be deployed. Our officers are being trained by the air force. They will work to make the borders secure. Part of the ongoing drill is to develop an action plan and we’re making progress.”

By Chibisi Ohakah

The Nigerian National Petroleum Corporation (NNPC) and the United States Trade and Development Agency (USTDA) have concluded arrangement to sign a $1.16 million grant as part funding for the NNPC-Abuja Independent Power Project (IPP) modelled to generate 1,350 megawatts of electricity to alleviate the power challenge in the country.

This was disclosed at a business meeting between the management of NNPC and the U.S. Trade and Development Agency in on Thursday, where both parties agreed to close out the deal on 1st December, 2019. Group managing director of the NNPC, Mallam Mele Kyari, said that the plan by the corporation to build the 1,350mw power plant in Abuja was part of the national strategy to monetize the abundant natural gas resources in the country.

The USDTA grant was to complement the ongoing feed project in order to make the Abuja IPP initiative more bankable for strategic investors’ participation. “As a state-owned oil company and enabler organization, we know that our investment in the Abuja 1,350mw IPP will increase energy supply level with great impact on the nation’s economy. Therefore, the USTDA grant is timely to make it a bankable project that would attract foreign direct investment into the country”, he said.

The GMD assured the U.S. team that every money given as grant to the corporation will be fully utilized and accounted for. “This company is focused on making our systems and processes transparent and accountable and that is why we are engaging world class institutions with good track record in execution of our projects”, the GMD explained.

He called on the USTDA to look beyond feasibility studies to actual delivery of the project, stressing that the power plant project has a lot of viable investment opportunities for all investors.

In her remark, the country manager, Power Africa and the leader of the USTDA delegation, Jullian Foerster, stated that her organization was determined to work with the corporation to sign off on the grant not later than 1st December, 2019.

She said that USTDA was open to other business opportunities in the coming year, 2020, noting that NNPC’s strategic role as a key player in the oil and gas industry made the U.S. Agency to “jump at the opportunity to work on this deal” of providing support in the form of a grant.

Chibisi Ohakah

………As NNPC activates Safe-To-Load Initiative

By Chibisi Ohakah

……..Senate asks NNPC to review pipeline ………Orders NNPC to refund N382.2m to Treasury

The National Assembly is set to amend the National Oil Spill Detection and Response Agency (NOSDRA) Act to prevent the activities of pipeline vandals that leads to explosions and deaths. The senate has also directed the Nigerian National Petroleum Corporation (NNPC) to refund to the Nigerian treasury the “outrageous” N382, 203, 055.74.

The NNPC is said to have used the money in firefighting operation in Komkom. The lawmakers asked the national oil company to provide evidence of compliance to the Senate Committee on Downstream Petroleum Sector.

The Senate has asked the Senate Committee on Petroleum (downstream) to invite the Nigerian National Petroleum Corporation (NNPC) with a view to ensuring a review of security measures for pipelines in parts of the country. The lawmakers alleged that officials of government are conniving with criminals involved in oil pipelines vandalism.

Commenting during the consideration of the report of the Ad-Hoc Committee on Pipeline Explosions during plenary, Senate President Ahmed Lawan, the NNPC top management must explain what they have been doing over the years to secure the pipelines; what measures are in place and whether there is need to review these agreements.

“This is a multi-billion dollar industry. People consciously do these things, it’s not an accident. Those who are caught in the fires or who come to scavenge are the ones who end up losing their lives. This is not acceptable. There must be sanctions, somebody will have to pay the price and of course, after these resolutions are sent to the executive, our committee must follow it up.

“When we have to amend the NOSDRA Act, this is something that we have to do expeditiously. We should do it because it will help in preventing or minimising reoccurrence of these criminal acts,” the Senate President said

According to the Ad-Hoc committee’s report, the incidences of pipeline explosions in Rivers and Lagos States would have been avoided if the NNPC/Nigerian Pipeline Storage Company (NPSC) and contractors monitoring the pipelines were proactive. Chairman of the Ad-Hoc Committee, Senator Ibrahim Gobir, said both NNPC/NPSC and the contractor were aware of the Komkom pipeline leakage in Rivers State, two days before the explosion but delayed in taking necessary action.

The lawmaker disclosed further that both NNPC/NPSC and the Oilserv contractor were aware of the intended activity of the vandals and the leakage a week and a day respectively, before the Ijegun explosion in Lagos State. He added that security personnel in connivance with NPSC staff collaborated with the vandals to siphon petroleum products from the pipelines.

The Senate, after consideration of the report on pipeline explosions, adopted all 15 recommendations by the Ad-Hoc Committee.

Accordingly, the Senate recommended that the NNPC without further delay should embark on Horizontal Directional Drilling (HDD) in re-laying pipelines especially in identified hotspots where erosion has exposed the pipelines to the surface. The upper chamber also recommended that the NNPC involve members of host communities in pipeline surveillance within their various areas as an interim preventive measure.

The Senate further recommended the deployment of modern technology in pipeline surveillance and detection of leakages as well as the introduction of “cathodic prevention of the pipelines”.

Chibisi Ohakah

Group managing director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has challenged the board of directors and management of the NNPC Retail Limited to sustain the company’s culture of delivering unadulterated petroleum products to Nigerians in its filling stations nationwide.

The GMD, who gave the charge in Abuja during the inauguration of a new board of directors for the company, said the confidence of Nigerians in the company’s commitment to delivering high quality products and the right quantity at the right prices was a great asset that the new management could leverage on to achieve the target of growing market share to 30 per cent.

“We have to maintain our viable operational strategies to advance our cause. NNPC Retail Limited’s management must focus to ensure that products are not adulterated and metres for both our own and our affiliate stations are not tampered with so that those who buy our products can derive maximum value for their money”, Mallam Kyari stated.

He said NNPC Retail Limited occupied a strategic position in the energy matrix of the country, adding that as a first line company with strong brand in petroleum products supply and distribution across the country, there was need to expand its scope and capture at least 30% market share within the shortest time possible for the benefit of Nigerians.

He explained that automation of process, continued maintenance of customer base and expansion would assist in speedy attainment of target.

Responding to the charge, the chief operating officer (COO), Gas and Power, and chairman of the board of directors, Engr. Usman Yusuf, assured of his team’s readiness to deliver on the task.

Other members of the board include: the COO, downstream, Engr. Adeyemi Adetunji, alternate chairman; COO, refineries, Engr. Mustapha Yakubu; managing director of NNPC Retail Ltd, Sir Billy Okoye; and company secretary, NNPC Retail Ltd, Mrs. Obioma Abangwu.

Chibisi Ohakah

….Promises transparency and merit

Nigerian National Petroleum Corporation (NNPC) has assured that only the most eminently qualified company from the 42 companies, who submitted bids for the lead insurer contract, would emerge in the recent bid-opening round conducted by the apex oil company in Abuja.

To ensure conformity with the public procurement law, the bid opening exercise, which held at the NNPC Towers Abuja, was witnessed by the representatives of the Bureau of Public Procurement (BPP), the Nigeria Extractive Industries Transparency Initiative (NEITI), National Insurance Commission, and civil society organisations.

The group managing director, Mallam Mele Kyari, said the selection of insurer for the Nigerian National Petroleum Corporation’s (NNPC) assets in the 2020/2021 would be transparent, just as is the practice in other areas of the corporation’s operation nationwide. He assured companies that participated in the expression of interest as lead insurer for the corporation’s oil assets for 2020/2021 of fair play and transparency  

“I am reassuring this country and the rest of our stakeholders that we are poised to make sure that this company acts and works transparently; we will remain accountable to our stakeholders. As a matter of duty for me and the management team, we will deliver on this”, the GMD stated.

He advised the companies that participated in the bid to accept the results as only the best would emerge winner. Also speaking at the event, the chief financial officer of the corporation, Mr. Umar Ajiya, said a key attribute of an organization like the NNPC was the protection of human assets, adding that the exercise was in pursuance of that objective.

Chibisi Ohakah

French oil giants, Total has put up for sale its 12.5% stake in a major deepwater oilfield off the coast of Nigeria. The move is believed to be in the effort to adjust the energy company’s Africa portfolio amid a broad expansion, Reuters reported yesterday.

The 12.5% stake is in the Oil Mining Lease (OML) 118, which is located some 120 kilometres off the Niger Delta, is valued at up to $750 million, according to industry sources. Investment Bank Rothschild is quoted as running the sale process for the international oil company

A spokeswoman for Total declined to comment. Rothschild equally declined to comment. The sale process is part of Total’s plan to sell $5 billion of assets around the world by 2020, the sources said.

Formerly Bonga field (Nigeria’s first deepwater project) before being renamed as OML 118, it is said to contain approximately 6,000 million barrels of oil. It was discovered in 1996, and the federal government gave approval for its development in 2002 and began production in 2005.

OML 118 produced around 225,000 barrels of oil and 150 million standard cubic feet of gas per day at its peak. The field produces both petroleum which are offloaded to tankers and natural gas which are piped back to Nigeria where it is exported via an LNG plant.

The oil well is jointly operated by Royal Dutch Shell, who owns 55% of the licence, Exxon Mobil holds 20%, while Italy’s Eni and Total each hold 12.5%. the new agency said the output from the block is planned to grow sharply with the $10 billion development of the Bonga South-west field which is expected to produce up to 200,000 bpd, roughly 10% of Nigeria’s current oil production.

Recently, Total Nigeria partnered with the Nigerian National Petroleum Corporation (NNPC) to grow daily crude oil and gas production and reserves to meet the national target of 40 billion barrels.

By Chibisi Ohakah

Nigeria Extractive Industries Transparency Initiative NEITI) has said that Nigeria lost over $41.9 billion to theft of crude oil and refined petroleum products between 2009 and 2018. A breakdown shows that Nigeria lost $38.5 billion on crude theft alone, $1.56 billion on domestic crude and another $1.8 billion on refined petroleum products within the period in review.

NEITI further disclosed that Nigeria losses an average of $11million daily which translates to $349 million in a month and about $4.2 billion annually to crude and product losses arising from stealing, process lapses and pipeline vandalism.

“While figures from government put the loss at between 150,000-250,000 bpd, data from private studies estimate the figure to be between 200,000-400,000 bpd. This implies that Nigeria may be losing up to a fifth of its daily crude oil production to oil thieves and pipeline vandals”, NEITI reported.

In its latest Policy Brief titled “Stemming the Increasing Cost of Oil Theft to Nigeria” released in Abuja on Tuesday, NEITI urged the federal government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities, and other creative strategies to combat oil theft in Nigeria.

The extractive agency stated that to curbing oil theft in the country’s oil and gas industry has become both necessary and urgent to expand revenue generation, given the current dwindling revenues.

On comparative analysis of the size and implication of the losses to the country’s current dwindling revenue profile, NEITI renewed its appeal to the government to curb oil theft to reduce budget deficits and external borrowing. The transparency agency stated that the value of crude oil and allied products so far lost are equal to the size of Nigeria’s entire foreign reserves. “Stemming this haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs”, the report stressed

What the country lost in 20 months in fiscal terms is enough to finance the proposed budget deficit for 2020; in 15 months to cover total proposed borrowing or increase capital budget by 100% and in five months to cover pensions, gratuities and retirees’ benefits for 2020, the agency noted.

“In terms of volume, 138.000 barrels of crude oil was lost every day for the past 10 years, representing 7% of average production of two million bpd. Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009-2018. What is stolen, spilled or shut-in represents lost revenue, which ultimately translates to services that government cannot provide for citizens already in dire need of critical public goods,” the agency said

The report examined the reasons for increase in incidence of crude and product theft and reviewed current containment strategies; These include, inadequate legal sanctions to serve as deterrent, stringent laws, deployment of technology designed to swiftly detect, localize and cut off flows to specific pipelines as soon as leakages occur.

The agency also recommended operational, security, legal and global governance instruments to combat crude theft. Among them is efficient response and containment time in checking oil theft and pipeline vandalism. NEITI called for forensic investigation into the activities of syndicates operating in the oil and gas industry, given the increasing rate of stealing and sophistication of the illicit trade.

By Chibisi Ohakah