Oil & Energy
NNPC To Introduce New Business Models For Viability
In a bid to ensure the commercial viability of Nigerian National Petroleum Corporation (NNPC), the management of the Corporation has said it would introduce new business models in all its strategic business units (SBUs) and Corporate Service Units (CSUs).
Speaking during his inaugural town hall meeting with the management and staff of the NNPC recently, the Group Managing Director (GMD), Andrew Yakubu stated that the management team would reposition the Corporation to be commercially focused and profit-driven organisation that is governed by best management practices.
According to Yakubu using the current technology, it would pursue and maintain competitive operational and business efficiency, cost effectiveness, input/output optimization revenue maximization and profitability. It will be recalled that NNPC’s exploration production arm, National Petroleum Development Company (NPDC) before 2010, its production level stood at 65,000 bpd, but in line with the directive it was given by 2010 to attain a production level of 250,000 bpd by 2015, which out grows its production to the current 130,000 bpd.
Commenting on NPDC’s current production level of which the bulk of it is from the Oil Mining Leases (OMLs) assigned to the company through the divestment by some Joint Venture Partners, the company’s managing director, Mr Victor Briggs described the growth as not being organic therefore the need for the company to commence aggressive drilling programme to make its production organic.
He therefore said to attain this target, NPDC has activated a plan to drill 40 wells in the next five years which is an average of eight wells per year.
Briggs noted that the plan was significant and ambitious considering that in the five years the company only 10 wells, which is an average of two wells per year.
He disclosed that the aggressive drilling programme has started with the drilling of Okono 6 and 7 wells in OML 119.
“These two new wells are producing 12,000 bpd. The only way we can increase our production is really by going out there and do the work. It is either you are repairing a well that has gone down because there are technical issues or you are drilling a well. In the case of Okono, it is the latter because we know there are potentials and all we did was to go out there and drill”, he said.
He added that for the company to attain 250,000 bpd target by 2015, it has to do another 100 per cent growth as it did from between 60,000 bpd and 65,000 bpd to about 130,000 bpd.
Briggs explained that first of all, they tried to repair some of the wells in order to restore their production capacities.
Citing OML 26 as an instance, he said from when the asset was handed over the NPDC in June and now the production of the field was doubled.
His words: “To meet the 250,000 bpd target by 2015 means doubling our production as I said earlier, but lam confident that we will meet the target because the resources are there and the reserves are there and we have the people. Everything is therefore set for us to meet the target. For example, in the last five years NPDC drilled 10 wells, but we have a target to drill about 40 wells in the next five years. We have two rigs on site today, one offshore and the other one onshore and by the middle of next year we will bring in one more rig and toward the end of the year we will bring in the fourth rig. I believe we shall keep those rigs for the next two years”.
He further said more rigs would be deployed by next year noting that also key to the programme was the effort to grow the reserves as this was the only was to ensure sustainability.
Oil & Energy
NNPC, UTM Seal Deal On First Indigenous Floating LNG Project
Nigerian National Petroleum Corporation (NNPC) and UTM Offshore have signed a Heads of Terms (HoT) agreement for the construction of the nation’s first indigenous floating LNG project.
The agreement, described as a major step towards bolstering Nigeria’s energy security and promoting the utilisation of its abundant gas resources, was signed on July 20, in Abuja.
It covers the 1.5 million tonnes per annum (mtpa) floating LNG project which is seen as a “must-do” initiative for Nigeria.
Signing the agreement, NNPC’s Group Chief Executive Officer (GCEO), Mele Kyari, expressed the company’s readiness to secure gas feedstock towards the project.
Group Managing Director UTM Offshore Ltd., Julius Rone, who described the deal as a milestone achievement, said it showcased the capability of indigenous companies to collaborate with world-class energy conglomerates to drive growth in Nigeria’s energy sector.
Rome further explained that apart from significantly cutting down on gas flaring and supporting the country’s commitment to reducing carbon emissions, the project would also create over 7,000 job opportunities, contributing to the nation’s economic growth and development.
For this project, UTM Offshore awarded the contract for the conceptual design service to JGC Corporation back in 2021.
It would be recalled that in late 2022, the consortium of JGC and Technip Energies secured the front-end engineering and design (FEED) contract.
The project was also supported by $5 billion from the African Export-Import Bank (Afreximbank).
Earlier this year, however, NNPC signed a Memorandum of Understanding (MoU) with Norwegian Golar LNG, an owner and operator of marine LNG infrastructure, to build a floating LNG plant in Nigeria.
Oil & Energy
‘NNPC Spent N15b To Reconstruct Lagos-Badagry Expressway’
The Nigerian National Petroleum Company Limited (NNPC Ltd.) has disbursed N15 billion for the reconstruction of the Lagos Badagry Expressway under the Federal Government Road Infrastructure Tax Credit (RITC) Scheme.
The N15 billion represents a 100 per cent payment of the funding of the Lagos-Badagry Road rehabilitation under the tax credit funding of the NNPC Ltd.
Group Chief Executive, NNPC, Mr Mele Kyari, made this known when he led NNPC’s management team with some top government officials to inspect the ongoing rehabilitation and expansion of Lagos-Badagry Expressway (Agbara Junction-Nigeria/Benin Border).
The road under rehabilitation is being funded by the NNPC Ltd. under the Federal Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.
The execution of the scheme is being carried out in collaboration with the Federal Ministry of Works and Housing as the supervisor and Federal Inland Revenue Service (FIRS) for NNPC’s tax obligations deductions.
This is in response to address the plight faced by petroleum products marketers in transportation which affects nationwide distribution.
Kyari said the fund disbursed was part of the N621.24 billion earmarked for the reconstruction of 21 roads nationwide under the scheme.
He expressed satisfaction over the stage of the road development.
“We are covering 1,804.6mkm across the country and taking another set of over a trillion naira investment on infrastructure in Nigeria, believing that with the tax credit system which Mr President has put in place, very soon there will be massive change.
“NNPC as the enabler will consider from its cash flow and fund whatever FIRS and Ministry of works approve for the company”, he said.
The Minister of Works and Housing, Mr Babatunde Fashola, represented by the Director, Highways, Roads and Rehabilitation of the Ministry, Mr Folorunsho Esan, said the intervention of the NNPC sped up the reconstruction of the expressway.
Esan said the project was 40 per cent completed.
“In the next 12 months we should be able to deliver this project because the drainages are in place, just for earth works and pavement works, it cannot take us more than 12 months,” he said.
Speaking on the gridlock being caused by the Lagos-Ibadan Expressway project, he said the contractor would clear all impediments and move out of site by December 15 to make the highway free for Yuletide.
Oil & Energy
Oil Marketers Urge Buhari To Crash Diesel Price
Petroleum marketers under the platform of Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) rose from their 2nd National Executive Council (NEC) meeting last week, within a plea to President Muhammadu Buhari to direct the Central Bank of Nigeria (CBN) to make dollars available at official rate to oil marketers.
This, they said, will enable them import diesel, end petrol scarcity, and ultimately save the Nigerian economy from sinking, saying that dollar support should be available till Dangote Refinery comes on stream later in the year.
The association, among others, urged the National Assembly to immediately enact a Bill for the establishment of Energy Bank for easy transaction in petroleum products in the sector.
National President of the Association, Mr Benneth Korie, who briefed the media after the NEC meeting in Abuja, noted that the bulk of the operational challenge peppering marketers and depot owners spring from expensive diesel which hovers around N850/litre.
While thanking President Muhammadu Buhari for approving a higher bridging cost payment to transporters, Korie said the operators’ challenges were far from over as oil marketers and depot owners spend about N20 million weekly on diesel to power their operations, thus eroding their profits.
The association urges the National Assembly to review the policy of taxation as it affects petroleum products supply and distribution chain.
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