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Ribadu Wants FG To Fund Joint Ventures

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The Management and staff of Bua Group, Port Harcourt in a walk-out during their Health, Safety and Environment (HSE) week at Port Harcourt Port Complex, recently.

The Federal Government, has been enjoined to put in place a coherent solution that allows government to fund its obligations under the Joint Venture JV Contract if it intends to increase its revenue from the oil and gas industry.

Mallam Nuhu Ribadu, commenting on the recommendations of the report by the Petroleum Revenue Special Task Force at the Council Chamber of the Presidential Villa, Abuja over the weekend said funding government obligation will unlock additional capital from JV partners which will over time increase government’s revenue from the proportionate additional balance of crude oil revenues and royalties on the entire production and taxes on taxable income.

Ribadu urged the federal government to take action on issues of outstanding royalties, petroleum revenue tax and various penalties citing gas flaring penalties as an instance.

His words: “Mr. President, the companies that are operating in Nigeria today are making huge money from our country. A lot of them are going out and investing in other parts of the world. The least they can do is to give us our own entitlement. We have found out that so many of them, even simple thing as royalties, they don’t pay. We need the money. We need them here. We need them to continue to do business, but also let them look at us and give us what is certainly our own entitlement.”

He also, highlighted on the use of traders to sell our crude stressing that other than Congo, Nigeria was the only country the world over that sells its crude through traders otherwise called term traders.”

The report noted that some international oil traders who were not “on the approved master list of customers” had been sold crude oil. “Without a formal contract” so little could be obtained about the details of these deals which can be worth hundreds of millions of dollars thus serve to reduce margins obtainable on sale of crude oil.

It therefore, recommended the direct sale of the nation’s crude like other countries were doing.

The report also pointed out the grave consequence of crude oil theft describing it as a national tragedy and stressed the need for government’s urgent action noting that it was one of the reasons the country was losing those who had interest of coming in to do business as they now have the option of going to other countries within the region that have just discovered crude oil.

Stating that the recommendations of the committee would strengthen institutions responsible for the management of the Petroleum industry, Ribadu who is the chairman of the committee said, “Most of the recommendations are about management, about people and about how we run our own affairs. It propably may not have to do with the law.

PIB or no PIB, some of these things right now can be implemented and if PIB comes it will still be very important in getting the result.”

The committee’s deputy chairman, Steve Orosanye, however, challenged the process of compilation of the report arguing that the process adopted by the committee at arriving at it the report was flawed.

Submitting the report to the President, the Minister of Petroleum, Mrs. Diezani Allison-Madueke called on Nigerians to down play the disagreement between the members of the committee and focus on the salient recommendation contained in the report.

“I will not allow this to reduce the extent of hard work that this people of integrity has put into all the work. They have done a good work. It is more critical to concern ourselves about how well we will move forward when we finalise,” she said.

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Oil & Energy

Nigeria Petitions OPEC+, Demands Quota Increase

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The Minister of State for Petroleum Resources, Timipre Sylva, said he has petitioned the Organization of the Petroleum Exporting Countries and its partners known as OPEC+ for an increased oil production quota for Nigeria.
Sylvia revealed this at the Gastech 2021 conference in Dubai, according to S&P Global Platts.
According to him, the country already wrote the group for an increment in its quota.
He said: “We’ve put request on the table, and we expect that to be looked at.
“We have capacity for more production than we are producing right now. Unfortunately, we are constrained by the quota.”
The Minister said the country’s full production capacity of about 2.2 million barrels per day should be reflected in a revised quota, saying that the country’s production struggles is due to technical problems from re-tapping reservoirs that had been shut to comply with the stringent OPEC+ cuts of the past 17 months, adding that production struggles would soon be fixed.
He said output could rebound to around 1.7 million barrels per day by November and two million barrels per day by the end of the year.
“We had some issues from shutting down the reservoirs,” he was quoted as saying by S&P Global Platts.
“When you shut down a reservoir, to restart it, sometimes there are challenges,” he added.

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Content Policy Saves $2bn In NLNG Train 7

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Nigeria was saved the sum of $2 billion dollars from the ongoing Train 7 of the Nigeria liquefied Natural Gas (NLNG) project as a result of using Nigerian firms, says the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Mr Simbi Wabote
Wabote, stated this last Friday, shortly after receiving the award of African Local Content Icon, from the African Leadership magazine, in Yenagoa.
The NCDMB Executive Secretary, who dismissed the assertion that the Nigerian content policy was costly, and a ploy by foreign interests who do not wish the country to develop, described the claim as blackmail, because experience had shown that the policy was more cost effective for oil firms.
“The Nigerian content policy saves costs, from the projects that the NCDMB have supervised it is clear that it is better for the International Operating Companies in Nigeria, but foreign interests at global levels erroneously say that local content is expensive.
“Before the move to increase the participation of Nigerians in the oil and gas sector, the participation was at about three per cent and previous administrations relied mostly on taxes and revenue and lost sight of the opportunities for Nigerians to get involved in the sector.
“From the oil sector where I am coming from, it is five times more expensive to pay an expatriate than a Nigerian, so how can they say that local content is more expensive ?
“ On the Train 7 project if you look at the cost provided by foreign companies, you have a wide gap of about $ 2 billion from the quotations of the lowest submitted by foreign firms and the highest from Nigerian companies, so local content is better as we ensured that quality was not compromised.
“From 2010 till now, we have come a long way, for instance NLNG had 90 per cent of the workforce as expatriates, but today 90 per cent of the workers are Nigerians with some even occupying top positions in foreign oil firms.
“I am thankful to President Muhamadu Buhari, who gave me the opportunity to practice local content in the public sector, by appointing me in 2016 and reappointing me in 2020,” Wabote said.
On the African Local Content Icon Award bestowed on him, Wabote said that it came to him as a ‘pleasant surprise’ adding that the ideals of the African Leadership Magazine justified his decision to accept the award.
Speaking earlier, the Managing Editor of the African Leadership Magazine, Mr Kingsley Okeke, noted that the process leading to the selection was transparent and independently conducted with nominations received from across the African continent.
“We found in the accomplishment and achievements of the Executive Secretary of the NCDM, a worthy character we must encourage and export to the rest of Africa.
“Our focus at the magazine is to spotlight the positive developments in the African continent and change the narrative and stereotypes by western media,” he said.
The Tide source reports that the African Local Content Icon Award was presented by Mrs Laura Hall, President-elect of the National Black Caucus in the U.S congress, at the headquarters of the NCDMB in Yenagoa.
Hall said that blacks in the United States, represented by the Black Caucus, also have a similar challenge with building local capacity to compete with their white counterparts in executing contracts in the U.S.
She said the caucus would collaborate and share ideas with the NCDMB on ways to increase the capacities of blacks in the U.S.

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Oil & Energy

HOMEF Frowns At PIA Non-Commitment To End Gas Flaring

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The Health of Mother Earth Foundation. HOMEF, has expressed displeasure that the Petroleum Industry Act is not definite about ending gas flaring regime in the country.
Executive Director, HOMEF, Rev Nnimmo Bassey, said the Act creates numerous provisions for operators to continue flaring gas unchecked, as it gives power to the Commission to grant operators a permit to flare gas.
Bassey lamented that such permits could easily be abused and turned into a license for unchecked and perpetual environmental and health damage to communities (as has been done previously).
“The Act also does not state the timeframe allowed for flaring in the case of facility start up or for strategic operational reasons
“While the PIA makes the flaring of gas illegal, it nonetheless creates a series of exemptions which ensures that the same gas flare regime continues literarily unchecked.
“The Act identifies instances where gas flaring may be permitted. These include (a) in the case of an emergency; (b) pursuant to an exemption granted by the Commission; or (c) as an acceptable safety practice under established regulations.
“It goes further to clarify that the Authority or Commission may grant a permit to a Licensee or Lessee to allow the flaring or venting of natural gas for a specific period –
(a) where it is required for facility start-up; or
(b) for strategic operational reasons, including testing.
“The section however does not provide an explanation of what ‘strategic operational reasons’ are beyond testing. It also does not state the timeframe allowed for flaring in the case of facility start up or for strategic operational reasons. These provisions could be easily abused and turned into a license for unchecked and perpetual environmental and health damage to communities (as has been done previously).”
HOMEF maintained that to end gas flaring, offenders should be made to pay the full economic cost of the flared gas based on the prevalent market price of gas, as well as the related health and environmental costs.
The environmental rights group also said that the Act does not appear to consider Nigeria’s climate change pledges as contained in the nation’s Nationally Determined Contributions.

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