Business

FG Refineries Post N406.62bn Loss In Two Years

Published

6 years ago

August 10, 2020

The four refineries owned by the Federal Government made a total loss of N406.62bn in two years, the latest audited financial statements of the plants have shown.
The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.
The country relies largely on importation for refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.
The Kaduna refinery recorded a loss of N64.34bn in 2018, down from N111.89bn in 2017, according to its financial statement.
Warri refinery posted a loss of N44.44bn in 2018, compared to N84.60bn in the previous year, while Port Harcourt lost N55.76bn in 2017 and N45.59bn in 2018.
The Group Managing Director, NNPC, Mallam Mele Kyari, said last week that the refineries were all idle.
At a summit organised by Seplat, he had said, “Today, unfortunately, all our four refineries are down.
“In Nigeria today, we are importing practically every petroleum product that we consume in this country.
“We are working to make sure that we are able to fix our refineries.”
In the first term of the President, Major General Muhammadu Buhari (retd), the NNPC had planned to rehabilitate the refineries to attain a minimum of 90 per cent capacity utilisation.
The plan was to use third-party financiers and the original refinery builders to provide the requisite funding and technical support.
However, after over one and a half years, negotiations with financiers were stalled in December 2018 due to varying positions on key commercial terms.
Kyari, who took over the NNPC leadership in July 2019, had reiterated his plan to revamp the refineries and end fuel importation by 2023.
The NNPC said in April that it had secured funding for the rehabilitation of the ailing refineries.
Kyari said the corporation was pursuing “a different model” for the refineries, including the type used by the Nigeria LNG Limited.
The NLNG is jointly owned by the Federal Government, represented by the NNPC (49 per cent), and three international oil companies, namely Shell (25.6 per cent), Total (15 per cent) and Eni (10.4 per cent).
Kyari said the corporation would no longer be involved in running the refineries after their rehabilitation.
He added that upon completion of the ongoing rehabilitation, the services of a company would be procured to manage the plants on an operations and maintenance basis.
The NNPC boss said last month that the issues around market structure had prevented private investors from building refineries in the country.
He said with the deregulation of the downstream petroleum sector, companies would be able to invest in the construction of refineries.
While 44 refinery licences have been given to private investors over the years, only a few projects, including the one being built by Dangote Industries Limited in Lagos, are underway.
There are a total of 38 proposed modular refineries with capacity ranging from 5,000 barrels per day to 30,000bpd, and six conventional plants with a total capacity of 1.35 million bpd, according to the Department of Petroleum Resources.
Aliko Dangote, Africa’s richest man, is building a refinery with a capacity of 650,000bpd, described as the world’s biggest single-train facility.

Business

Why The AI Boom May Extend The Reign Of Natural Gas

Published

35 minutes ago

February 16, 2026

The Tide

Artificial intelligence is often viewed as a catalyst for electrification and subsequently decarbonization. Yet one of its most immediate effects may be the opposite of what many assume. The rapid buildout of AI infrastructure is increasing demand for reliable power, and that reality could strengthen the role of natural gas and other dispatchable energy sources for many years.

Investors focused on semiconductors and software valuations may be overlooking a key constraint. AI runs on electricity, and those electricity systems operate within physical and economic limits.

The energy sector has spent much of the past decade grappling with slow load growth. That is now changing, in a way that is reminiscent of the sharp rise in oil demand—and subsequently price—in the early 2000s.

Training large language models and operating advanced AI systems requires enormous computing resources. Hyperscale data centers are expanding rapidly, with developers requesting gigawatt-scale interconnections from utilities. In several regions, electricity demand forecasts have been revised upward after years of flat expectations.

This shift is significant because AI workloads create continuous, high-density demand rather than intermittent usage. Data centers cannot simply power down when the electricity supply becomes constrained. Reliability becomes paramount.

Wind and solar capacity continues to expand, but intermittent generation alone cannot meet the firm capacity needs of AI infrastructure without significant storage or backup generation.

Battery storage is improving, yet long-duration storage remains costly at scale. Nuclear projects face long development timelines and complex permitting hurdles. Transmission expansion also lags demand growth in many regions.

These constraints make dispatchable power sources critical. Natural gas plants can ramp quickly, operate continuously, and be deployed faster than many alternatives. As a result, gas-fired generation is increasingly viewed as a practical solution for supporting AI-driven load growth.

This does not undermine the role of renewables. In many markets, new renewable capacity is paired with gas generation to maintain grid stability. The key point is that AI-driven electrification is likely to increase fossil fuel usage in the near term.

Construction timelines favor gas-fired generation when demand rises quickly. Existing pipeline infrastructure reduces barriers to expansion. And for operators of data centers, reliability often outweighs ideological preferences. Downtime is simply too expensive.

Utilities are also revisiting resource plans as load forecasts rise. That shift may drive increased investment in transmission, grid modernization, and flexible generation assets.

The Decarbonization Story Is Complex

A common narrative holds that AI accelerates the transition away from fossil fuels because it increases electrification. The reality is more nuanced.

If electricity demand outpaces the buildout of low-carbon capacity, fossil generation may still increase in absolute terms even as renewables gain market share. Total emissions could rise, but the carbon intensity of the energy system may trend lower as cleaner sources make up a larger share of supply.

Ultimately, energy systems evolve based on engineering and economics, not just policy goals or market narratives.

Rising power demand could benefit utilities investing in transmission and generation capacity. Natural gas producers and midstream companies may see structural demand support from increased power-sector consumption. Equipment suppliers tied to grid reliability and gas turbines could also gain from the shift.

Longer term, advances in nuclear, storage, or efficiency may change the trajectory. For now, the immediate response to surging electricity demand is likely to rely on technologies that can be deployed quickly and reliably.

Artificial intelligence may reshape the economy in profound ways. One of the least appreciated consequences is that it may extend the relevance of natural gas as the world builds the energy backbone required to power the next generation of computing.

By: Robert Rapier

Business

Ogun To Join Oil-Producing States ……..As NNPCL Kicks Off Commercial Oil Production At Eba

Published

35 minutes ago

February 16, 2026

The Tide

Ogun State is set to join the comity of oil producing states in the country following the discovery and subsequent approval of commercial oil exploration activities in the Eba oil well, in Ogun Waterside Local Government Area of the state.

A technical team from the Nigerian National Petroleum Company Limited (NNPCL) has visited the area as preparations are in advanced stage for commencement of commercial drilling operations in the state.

The inspection followed President Bola Ahmed Tinubu’s approval for commercial exploration, forming part of the federal government’s efforts to deploy the required technical capacity and infrastructure for production.

Officials of NNPCL carried out the exercise alongside representatives of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and national security agencies to evaluate the site and confirm its readiness for drilling activities.

The delegation was led by Project Coordinator for Enserv, Hussein Aliyu, who headed the NNPCL Enserv technical team.

Other members included Wasiu Adeniyi, Onwugba Kelechi, Engr. Rabiu M. Audu, Ojonoka Braimah, Ahmad Usman, Akinbosola Oluwaseyi, Salisu Nuhu, James Amezhinim, Yusuf Abdul-Azeez, Amararu Isukul and Livinus J. Kigbu.

Speaking, Governor Dapo Abiodun, described the development as a landmark achievement for Ogun State, saying “the commencement of drilling at Eba would stimulate economic growth, create employment opportunities and attract increased federal presence to the state’s coastal communities.

Abiodun also expressed appreciation to President Tinubu for his support toward the development of frontier oil basins and the equitable spread of the nation’s energy resources.

Recall that geological reports had earlier confirmed the presence of hydrocarbons within the Ogun Waterside axis, leading to preliminary surveys and technical engagements by NNPCL.

The Ogun State Government also carried out an independent verification of the oil well’s coordinates, affirming the discovery is located within the state’s boundaries.

To secure the project, naval security personnel have been deployed to the site for over 18 months, with the support of the Ogun State Government, to protect the facility and its environs.

The Eba oil well is regarded as part of Nigeria’s strategic move to expand oil production beyond the Niger Delta region.

Business

OIC: NCDMB Issues NCEC Guidance Notes, Rules Out Transfer of Certificate

Published

36 minutes ago

February 16, 2026

The Tide

Determined to speed up the Oil and Gas industry contracting(OIC) processes and weeding out firms lacking technical capacity to perform as well as reduce Nigeria’s cost of production, the Nigerian Content Development and Monitoring Board(NCDMB), has issued the Nigerian Content Equipment Certificate (NCEC) application guidance notes with effect from December 2025.

The document which is available on the Board’s website – ncdmb.gov.ng, and on the NCEC application portal, forms part of concerted efforts to operationalize the Presidential Directives (PDs) on Local Content Requirements, which mandates NCDMB to take further steps to eliminate intermediaries in the contracting process lacking demonstrable capacity.

Emphasising that one of the key requirements for participating in the Nigerian oil and gas industry contracting process is the possession of NCECs issued by the NCDMB, the document states that unmerited possession or misapplication of the NCECs during tendering and bid evaluations contribute to contracting delays and admittance of unqualified intermediaries into the contracting process.

According to NCDMB, the goal of the new document is to “tackle cases of single and multiple NCEC applications not matched to capacities on ground, submission of fake or forged documents, under declaration of personnel, non-existent offices or equipment, and many other dubious applications.

A statement from the Board also states that the guidance notes will also enhance timely review and approval of applications from genuine service companies as the document provides all the requirements needed to complete credible application at first attempt.

The eight NCEC categories cover Manufacturing and Related Services (MS), Fabrication and Construction (FC), Construction and Moveable Equipment (EC), Services and Support (SS), Quality Control Inspection and Testing (QS), Non-Moveable Assets (DA), Procurement and Supplies (PS) and Consultancy Services (CS).

In the document the Board advised service companies to provide details of their specific service offering with sufficient supporting evidence while applying for any of the NCEC categories via the application portal.

Providing further explanation, the NCDMB stressed that it does not solicit or require any payment for the application, processing, or approval of NCEC or any of its certifications.

It added that in line with the Presidential directive on Local Content compliance, the NCDMB prohibits the use of agents, middlemen and third parties in raising and submission of NCEC application on behalf of service companies.

“Service Companies registered on the NOGIC-JQS are liable for any claims and documentations submitted in support of application for NCEC or any other NCDMB certifications using their assigned login in details.

”The document also indicated that companies and their subsidiaries or local partners cannot apply for or obtain NCEC as separate companies using the same facilities, equipment, assets, or documentation and NCEC is not transferable for use by another company.

“The guidance notes enjoined service companies to only apply for NCECs based on their core service area. Spurious applications contribute to delays in the processing of genuine applications. Cases that are determined to have constituted abuse of NCEC applications shall attract applicable sanctions.

“The NCEC notes also indicates that companies applying for multiple NCECs must have the capacities in terms of assets, facilities, equipment and personnel to execute the scope of activities under the target NCEC categories”, the document, according to the Board stated.

“NCDMB will carry out facility visits to ascertain the capacities and capabilities claimed by a company in multiple NCEC applications. NCECs are not granted in anticipation of establishment of local capacities but are approved based on functional equipment and assets with dedicated resources or utilities in place to operate or perform the services.

“Applicants must be ready to demonstrate operability and availability of owned assets and equipment as may be required during facility visit by NCDMB team.

“Request for upgrade or addition of services, on approved, un-expired NCEC based on additional investment will be treated as new application and subjected to verification of all equipment and assets and documentation submitted in support of the modification”, the Board’s document added.

According to the NCDMB, the document also stated further that applicants are expected to be upfront and intentional in the provision of the relevant and complete information required for timely review of their requests.

“The document also listed services which do not require NCECs. They include GSM service providers, commercial airlines, educational institutes, legal advisory services, public relations and events management, government agencies, and CSR projects with community vendors”, the Board noted.

Commenting on the guidance notes, the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, enjoined oil and gas stakeholders to study the guidance notes while applying for NCECs.

He warned that submission of forged, altered, or falsified documents constitutes a criminal offence and would attract legal consequences as well as the Board’s administrative punishments.

The Executive Scribe mentioned that the NCDMB had set target timelines for the review and processing of NCEC applications, with the portal providing timestamp of all activities and interactions undertaken from the point of submission of application and all reviews by the Board.

By: Ariwera Ibibo-Howells, Yenagoa