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NNPC Weekly Activities Highlight Energy Security

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The weekly activities of the Nigerian National Petroleum Corporation (NNPC) started on a cheering note as the Federal Government assured the Corporation of maximum security as it returns to the Chad Basin for exploratory activities.
President Muhammadu Buhari gave the assurance during his recent visit to Borno State, following the improvement of security in the area.
The president tasked the NNPC to expedite action towards the delivery of 50 megawatts power plant in the state to ensure the prompt restoration of electricity to Maiduguri and its environs.
Still on a cheering note, the House of Representatives Committee on Upstream commended the National Petroleum Investment Management Services (NAPIMS), a corporate Service Unit of the NNPC for efficient management of the nation’s Joint Venture Operating Agreements with the International Oil Companies in Nigeria.
Rep Musa Adar, Chairman of the Committee, who gave the commendation during a recent oversight visit by the committee in Lagos noted that NAPIMS had demonstrated capacity and efficiency in the management of the nation’s hydrocarbon resources.
Speaking earlier, Group General Manager, NAPIMS, Mr Bala Wunti, urged the National Assembly to pass the Petroleum Industry Bill (PIB) to create a competitive oil and gas industry for the country.
Also in the week under review, NNPC struck a partnership deal with the Economic and Financial Crimes Commission (EFCC), Department of State Services (DSS), Nigeria Police Force (NPF), Nigeria Customs Service (NCS), and the Nigeria Security and Civil Defence Corps (NSCDC).
The deal with was struck with other relevant downstream and upstream stakeholders in the petroleum industry was to curb smuggling and crude oil theft which had negatively impacted the nation’s economy.
The Group Managing Director of the NNPC, Malam Mele Kyari, said the move was at the instance of President Muhammadu Buhari who had ordered a stop to crude oil theft and illicit truck-out of petroleum products to other countries.
Kyari said the president had urged the Corporation of every stakeholder to ensure that the daily national petroleum products consumption which shot up to 102million litres in May was brought down to realistic levels of around 60million litres.
“We will all agree that smuggling is not a business that should be condoned because even for deregulated petroleum products it brings extra cost burden on this country both in terms of safety and security of supply and in securing of foreign exchange.
“It even constitutes more burden to this country when the product involved is a regulated product like Premium Motor Spirit (PMS).
“We all know that our daily consumption is not up to 60million litres. We all know that, and that is why we have to pull it down. We will pull it down by every means necessary,” Kyari said.
He said NNPC would commence Advanced Cargo Declaration in line with global best practices to tackle the menace.
EFCC Chairman, Abdulrasheed Bawa, said the Commission would work with NNPC to ensure perpetrators of the act were brought to justice.
The Major Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA) and the Independent Petroleum Marketers Association of Nigeria (IPMAN), assured NNPC of total support towards the fight.
The Nigerian Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers (PTD) and all the other stakeholders also pledged their support to fight smuggling.
The NNPC Gas and Power Investment Company (NGPIC), a wholly owned subsidiary of the NNPC, launched an initiative tagged “Hazard Hunt Awareness” aimed at curbing harmful incidents in and around the workplace.
NGPIC is a subsidiary of the NNPC with the responsibility to promote domestic gas utilisation and maximise value from investments across the LNG and power value chains as well as the gas-based industries.
The event which was held at the NNPC Towers Abuja saw the Chief Operating Officer, Gas and Power, Yusuf Usman, saying that the initiative was in line with NNPC Top Management’s drive towards becoming a company of global excellence.
“Safety is an aspect that we in the oil and gas industry should pay serious attention to for sustainable operations.
“The Hazard Hunt Initiative which we are launching today, is an awareness programme to help us to promptly identify unsafe acts and conditions so that we can curtail incidences and accidents in our operations,” Usman said.
Earlier in his remarks, the Managing Director of NGPIC, Mr Salihu Jamari, who was represented by the General Manager, Commercial, Mr Justin Ezeala, said that the initiative was a result of research and consultations with stakeholders.
Jamari stated that the programme would assist the NGPIC Management to deliver on its key performance indicators (KPIs) for 2021, pointing out that a company that operates safely would always have motivated staff strength driven towards profitability.
On his part, the General Manager, Group Safety, Health, Environment and Quality (GHSEQ), Mr Hussaini Ali, tasked every staff to be involved in identifying potential hazards and flagging them for prompt action in the interest of the organisation.
Still in the week under review, the NNPC through its Advanced Leadership Programme (ALP) class 095 donated a block of renovated three (3) classrooms, two (2) staff rooms and a borehole to Chachi community, in Tafa Local Government area of Niger state.
The donation was part of the Corporate Social Responsibility project of ALP Class 095.
The General Manager, Talent Management Department, Fatima Yakubu, represented by Mr John Ogbe, commended class 095 for supporting the community’s educational and water needs and encouraged members of the community to take proper care of the facilities for their good.
President of the class, Mr Ogunlolu Olumuyiwa, said Class 095 CSR focused on the renovation of the classrooms and staff rooms because of the dire need to encourage education in the country.
Olumuyiwa added that the borehole would also meet the water need of the community.
The Chairman of the CSR committee of the class, Mr Okeme Aliu, noted that the project was in consonance with the strategic directions of NNPC in ensuring CSR in its host communities.
The Dagachin Chachi, Alhaji Musa Abubakar, spoke in Hausa, and expressed gratitude to the NNPC and the class for supporting the growth and development of the community.
The NNPC also in the week explained the importance of Oil Mining Lease (OML) 118 which was discovered in 1996.
The Corporation while signing a partnership deal for another 20 years said the OML 118 covered approximately 60 sq km in an average water depth of 1,000 metres.
The deal was between NNPC and its Production Sharing Contract (PSC) partners including Shell Nigeria Exploration and Production Company (SNEPCo), and Total Exploration and Production Nigeria Limited (TEPNG).
Others were Esso Exploration and Production Nigeria Limited (EEPNL) and the Nigerian Agip Exploration (NAE).
The five agreements signed include, Dispute Settlement Agreement, Settlement Agreement, Historical Gas Agreement, Escrow Agreement and Renewed PSC Agreement.
NNPC GMD Kyari said over 10 billion dollars of investment would be unlocked as a result of the agreements which signaled the end of the long-standing disputes over the interpretation of the fiscal terms of the Production Sharing Contracts (PSC).
He disclosed that the deal would yield over 780 million dollars in immediate revenues to the Federal Government while it would also free the parties from over 9 billion dollars in contingent liabilities.
“This is an indication of a renewed confidence between NNPC and her partners; between the Government and the investing communities which include NNPC.
“It produces value for all of us by providing a clear line of sight for investment in the Bonga bloc of around 10 billion dollars.
“Ultimately, these agreements will engender growth in our country where investment will come in for other assets, not just in the deep-water, but even for new investors. It is an opportunity for them to see that this country is ready for business,” Kyari said.
NNPC partners applauded the Corporation for the unprecedented progress in the oil and gas industry that necessitated the deal.
On the global scene, Oil prices rose after industry data showed United States crude inventories fell more than expected, reinforcing views of a tightening supply-demand balance with road and air travel picking up in Europe and North America.
Brent crude futures jumped 42 cents or 0.6 per cent to 75.23 dollars per barrel, after giving up 9 cents.
United States West Texas Intermediate (WTI) crude futures jumped 33 cents or 0.5 per cent to 73.18 dollars per barrel, after falling 60 cents.
The American Petroleum Institute industry group reported crude stocks fell by 7.2 million barrels for the week ended June 18, according to two market sources.
Meanwhile, the Market Intelligence Department of NNPC’s London Office reported that Officials from several Organisations of the Petroleum Exporting Countries (OPEC)-plus countries are holding informal consultations.
The consultations include discussing the possibility of a further increase in the alliance’s oil production.
OPEC-plus is due to hold its next ministerial meeting on July 1 and scenarios prepared for the meeting by the OPEC secretariat pointed to growing demand for oil in the second half of this year.
That could support the case for a further gradual increase in the alliance’s production ceilings, the delegates said.
Oil Prices Back at Pre-Pandemic Levels as Brent crude oil futures have rallied since last fall and touched 75 dollars per barrel amid expectations that demand would continue to recover in the second half of this year.

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BUA Group, A’Ibom Sign MoU For Refinery’s Access Road

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Bua Group has signed a memorandum of understanding, (MoU), with Akwa Ibom State Government, and the host communities in Ibeno Local Government Area, for the construction of access road to the proposed Bua Refinery and Petrochemical plant site in Ibeno, last week.
Akwa Ibom State Commissioner for Power and Petroleum Development, Dr. John Etim, who presided over the signing of the MoU, applauded BUA for their commitment to the project, prompt documentation and the preparation of the site towards the construction of the refinery.
Etim said that the refinery project will bridge the gap between host communities and Akwa Ibom State, thereby bringing about more developments in the oil and gas sector of the State.
The Commissioner called on all parties concerned to be committed to the terms of agreement and to ensure that peace dominates their relationship, while appealing to the host communities to protect the facilities which is now in their custody
“The refinery and petrochemical project is in line with the Governor’s vision to industrialise the State, develop local capacity in key industries where value can be added and raw materials sourced locally.”
Speaking shortly after the MoU signing, the Chairman of Ibeno local government, Williams Mkpa, expressed delight over the development, describing it as a giant stride in the industrialisation vision of the Akwa Ibom State Government.
The paramount ruler of the area, Owong Effiong Archianga, assured the company of his people’s unalloyed support and cooperation to see to the actualisation of the project.

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CSO Urges Oil Communities To Challenge PIA In Court

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A Civil Society Organisation, Policy Alert, has faulted President Muhammadu Buhari’s signing of the Petroleum Industry Act 2021, urging communities to test the provisions of the Act before the courts.
President Buhari had signed the erstwhile Petroleum Industry Bill, PIB, into law last Monday amidst protests from community groups and many other stakeholders that the Bill do not adequately cover the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholders Engagement Officer, Mrs. Nneka Luke-Ndumere, Policy Alert, which is working for economic and ecological justice, described the presidential assent to the PIB as “grossly insensitive and problematic.
“It is sad that the bill has been assented to in the most controversial manner despite its many obvious flaws and its rejection by many stakeholders,” the statement read.
It added: “For example, the controversial provision for a direct payment of 30 percent profit oil and profit gas to the Frontier Exploration Fund potentially shortchanges the oil producing states and local governments of some of its thirteen percent derivation as it bypasses the requirement in section 162 (2) of the 1999 Constitution (as amended) which provides that all revenues be channeled through the federation account.
“This is most unfair, viewed against the ceding of only three percent of previous years’ operating expenses to the Host Communities Development Trust Fund and the punitive provision to charge costs of any damage to facilities against the community’s Fund, among other obnoxious provisions.
“That Mr. President has gone ahead to give assent to these vexing provisions only reinforces the politics of exclusion and expropriation that has for long characterised the relationship between the Nigerian state and the oil producing communities.
“We are also concerned that the host communities’ component of the legislation flies in the face of one of its stated objectives to address tensions between host communities and companies as it has all the ingredients for escalating rather than abating such conflicts.
“At a time when fossil fuel investments are being deprioritised elsewhere as a result of the global energy transition, it is unfortunate that this Act failed to provide a bridge between the current era of fossil fuel dependency and the low-carbon energy future that Nigeria aspires to within the framework of government’s much vaunted commitments under the Paris Agreement.”
The statement also said: “Granted, the new legal framework introduces some predictability and clarity to the governance and fiscal arrangements in the oil and gas industry. We are also not oblivious to certain clauses that respond to some of our earlier demands, such as those providing that the Board of Trustees of the Host Communities Development Trust will now be determined in consultation with the host communities, with  membership drawn from community members. But that is just as far as it goes.
“As a tool for improved benefit sharing to host communities, the Act falls flat on its face. It actually ridicules the exertions of the host communities and advocacy groups that have clamoured over the years for a law that yields some space for participation, direct socio-economic benefits and environmental remediation for oil-rich communities.
“The theatre of action will now have to move to the communities and the courts of law. As implementation of the Act gets underway over the next 12 months, we urge host communities and civil society groups to begin to seek interpretation of some of its more controversial provisions before the courts.”

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Kyari Tasks Greenfield Refinery On Fuel Importation

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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has charged members of the Board of the NNPC Greenfield Refinery Limited (NGRL), to explore all available options to bring an end to the current challenge of petroleum products importation.
Mallam Kyari gave the charge Thursday while inaugurating the Board of the newly incorporated subsidiary of the Corporation, NNPC Greenfield Refinery Limited (NGRL), at the NNPC Towers, Abuja.
The NNPC Greenfield Refinery Limited is a subsidiary of the Corporation set up in December 2020 with a mandate to oversee the establishment and operation of new refineries.
The GMD, who is also the Chairman of the NGRL Board, challenged members of the Board to focus on profitability in order to remain afloat and avoid liquidation.
“As a business, this is a big opportunity for us and this company’s balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So, there is really no excuse”, Mallam Kyari stated.
He urged the Board and Management Team of the new company to set up a proper structure with the required skills, technology and financing to drive the company’s operations, adding that he was optimistic that the company would be able to achieve its mandate.
“Our company must grow and we can’t do well except we are able to process our production whether it is the liquid or gas. If we don’t monetise it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.
The NNPC helmsman stated that all the Corporation’s initiatives in the areas of new refineries, condensate refineries and equity acquisition in credible private refineries were geared towards ensuring energy security for the country.
In his remarks, the Alternate Chairman of the Board and Group Executive Director, Refinery and Petrochemicals, Engr. Mustapha Yakubu, declared that the operations of the company would be guided by the principles of cost effectiveness in line with the new Petroleum Industry Act (PIA), noting that profitability would be the key focus.
Speaking in similar vein, the Group General Manager, Greenfield Refineries and Project Division (GRPD) and Managing Director of the NGRL, Engr. Bege Talson, disclosed that the Division was working with third party investors to establish greenfield, modular and condensate refineries with a combined capacity of 250,000barrels per stream day (bpsd).

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