Oil & Energy

PIB: NNPC Assures Conducive Fiscal Regime

Published

14 years ago

August 15, 2011

The Nigerian National Petroleum Corporation (NNPC) has assured investors in the nation’s oil and gas industry, specifically joint venture partners, that the fiscal regime which would emerge from the Petroleum Industry Bill (PIB), when passed, would make Nigeria a more conducive environment for business in the West African sub-region.

Group Managing Director of NNPC, Engr Austen Oniwon gave the assurance at the just-concluded 35th edition of the Society of Petroleum Engineers (SPE) Nigeria Annual International Conference and Exhibition (NAICE) 2011 while presenting a paper entitled, “Gas Utilisation For Long Term Clean Energy And Economic Growth”, in Abuja.

Oniwon reasoned that the non-passage of the bill should not be an excuse for indecision as the opportunities available in the industry would not wait as others would come and fill the gap, if joint venture partners fail to act promptly.

Acknowledging their doubts about the fiscal regime in the PIB, the NNPC boss said, “but I can tell you from what I know from the PIB, that the fiscal regime that will emerge is not going to be any worse than what operates in the West African sub-region.

“I believe, if you can do business under these regimes, then those that would do business under the PIB would be very happy to do business in Nigeria”, the GMD emphasised.

The Tide gathered that the bill stipulates how resources and profits should be shared between government and operators in the industry, and conditions under which the companies will operate.

But The Tide understands that some major international oil companies (IOCs) had kicked against the PIB, alleging that it contains a punitive fiscal regime, and therefore, may undermine their business interests.

Sources said that this feeling had resulted in observed reluctance of the IOCs to invest in new exploration and production operations in the country, which has adversely impacted available crude oil reserves.

But in a bold strategy to shore up core investors’ confidence in the PIB, Oniwon pledged the corporation’s resolve to optimise the nation’s oil and gas potential by encouraging investors to expoit the wide opportunities that exist to boost their drive towards business expansion.

According to Oniwon, with proven gas reserves put at 187 trillion cubic feet (tcf) as at January, 2007, the country’s gas reserves creates a solid platform for environmentally-sustainable economic growth, nothing that as the seventh largest producer in the world, Nigeria’s gas remains of high grade quality without any sulphur content.

On the need to enhance gas utilisation, the GMD said, “Nigeria is said to be one of the fastest growing emerging economies with an expanding middle class, and expected growth in the energy and power sectors”, adding that, “existing energy supply and demand imbalance widening as a lack of past investment in infrastructure has hindered development of Nigeria’s natural gas resources.”

Oniwon stressed that, “government’s objective is to increase power generation capacity to 10,000megawatts from the current 6,000megawatts, of which less than 50 per cent is utilised due to gas supply constraints.”

He noted that the dearth of domestic infrastructure has made diesel and petrol the main source of fuel supply for electricity generation in Nigeria, and added that the realisation of the full potential of natural gas would require enormous efforts and collaboration.

The NNPC’s top director reiterated the Federal Government’s vision of using the gas industrialisation project for the economic transformation of the country, adding that the strategic initiative is anchored on planned investments such as petrochemicals, fertiliser and methanol plants, aimed at shooting up gas utilisation and monetisation windows.

Vivian-Peace Nwinaene

Oil & Energy

No Subsidy In Oil, Gas Sector — NMDPRA

Published

5 days ago

September 8, 2025

The Tide

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said there are no subsidies in the oil and gas sector as Nigeria operates a completely deregulated market.

The Director, Public Affairs Department, NMDPRA, George Ene-Italy, made this known in an interview with newsmen, in Abuja, at the Weekend.

Reacting to the recent reports that the Federal Government has removed subsidies or increased the price of Compressed Natural Gas (CBG), Ene-Italy said, “What we have is a baseline price for our gas resources, including CNG as dictated by the Petroleum Industry Act”.

He insisted that as long as the prevailing CNG market price conforms to the baseline, then the pricing is legitimate.

Furthermore, the Presidential – Compressed Natural Gas Initiative (P-CNGI) had said that no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI boss, Michael Oluwagbemi, emphasised that the recent pump price adjustments announced by certain operators were purely private-sector decisions and not the outcome of any government directive or policy.

For absolute clarity, it said that while pricing matters fell under the purview of the appropriate regulatory agencies, no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI said its mandate, as directed by President Bola Tinubu, was to catalyse the development of the CNG mobility market and ensure the adoption of a cheaper, cleaner, and more sustainable alternative fuel and diesel nationwide.

Oil & Energy

‘Nigeria’s GDP’ll Hit $357bn, If Power Supply Gets To 8,000MW’

Published

5 days ago

September 8, 2025

The Tide

The Managing Director, Financial Derivatives Company Limited (FDC), Bismarck Rewane, has said that Nigeria’s Gross Domestic Product (GDP) could rise to $357b if electricity supply would increase from the present 4.500MW to 8,000MW.

Rewane also noted that Nigeria has spent not less than $30 billion in the power sector in 26 years only to increase the country’s power generation by mere 500MW, from 4,500 MW in 1999 to 5,000MW in 2025 though the sector has installed capacity to generate 13,000 MW.

In his presentation at the Lagos Business School (LBS) Executive Breakfast Session, titled “Nigeria Bailout or Lights Out: The Power Sector in a Free Fall”, Rewane insisted that the way out for the power sector that has N4.3 trillion indebtedness to banks would be either a bailout or lights out for Nigeria with its attendant consequences.

He said, “According to the World Bank, a 1.0 per cent increase in electricity consumption is associated with a 0.5 to 0.6 per cent rise in GDP.

“If power supply rises to 8000MW, from current 4500MW, the bailout shifts money from government into investment, raising consumption and productivity. And, due to multiplier effects, GDP could rise to $357 billion.”

The FDC’s Chief Executive said “in the last 30 years, Nigeria has invested not less than $30 billon to solve an intractable power supply problem.

“The initiatives, which started in 1999 when the power generated from the grid was as low as 4,500MW, have proved to be a failure at best.

“Twenty-six years later, and after five presidential administrations, the country is still generating 5,000MW. Nigeria is ranked as being in the lowest percentile of electricity per capita in the world.

“The way out is a bailout, or it is lights out for Nigeria”, he warned.

He traced the origin of the huge debts of the power sector to its privatisation under President Goodluck Jonathan’s administration, when many of the investors thought they had hit a jackpot, only to find out to their consternation that they had bought a poisoned chalice.

Rewane, who defined a bailout as “injection of money into a business or institution that would otherwise face an imminent collapse”, noted that the bailout may be injected as loans, subsidies, guarantees or equity for the purpose of stabilising markets, protect jobs and restore confidence.

He said, “The President has promised to consider a financial bailout for the Gencos and Discos. With a total indebtedness of N4.3 trillion to the banking system, the debt has shackled growth in the sector.”

Rewane warned that without implementing the bailouts for the power sector, the GENCOs and DISCOs would shut down at the risk of nationwide blackout.

Rewane, however, noted that implementing a bailout for the power sector could have a positive effect on the country’s economy if Nigeria’s actual power generation could rise from today’s 4,500 MW to around 8,000 and 10,000 MW.

The immediate gains, according to him, would include improved power generation and distribution capacity, more reliable electricity supply to homes and businesses as well as cost reflective tariffs.

Oil & Energy

NEITI Blames Oil, Gas Sector Theft On Mass Layoff

Published

5 days ago

September 8, 2025

The Tide

The Nigeria Extractive Industries Transparency Initiative (NEITI) has blamed the increasing crude oil theft across the nation on the persistent layoff of skilled workers in the oil and gas sector.

The Executive Secretary, NEITI, Orji Ogbonnaya Orji, stated this during an interview with newsmen in Abuja.

Orji said from investigations, many of the retrenched workers, who possess rare technical skills in pipeline management and welding, often turn to illicit networks that steal crude from pipelines and offshore facilities.

In his words, “You can’t steal oil without skill. The pipelines are sometimes deep underwater. Nigerians trained in welding and pipeline management get laid off, and when they are jobless, they become available to those who want to steal crude”.

He explained that oil theft requires extraordinary expertise and is not the work of “ordinary people in the creeks”, stressing that most of those involved were once trained by the same industry they now undermine.

According to him, many retrenched workers have formed consortia and offer their services to oil thieves, further complicating efforts to secure production facilities.

“This is why we told the Nigerian Content Development and Monitoring Board (NCDMB) to take this seriously. The laying off of skilled labour in oil and gas must stop”, he added.

While noting that oil theft has reduced in recent times due to tighter security coordination, Orji warned, however, that the failure to address its root causes, including unemployment among technically trained oil workers would continue to expose the country to losses.

According to him, between 2021 and 2023, Nigeria lost 687.65 million barrels of crude to theft, according to NEITI’s latest report. Orji said though theft dropped by 73 per cent in 2023, with 7.6 million barrels stolen compared to 36.6 million barrels in 2022, the figure still translates to billions of dollars in lost revenues.

Orji emphasised that beyond revenue, crude oil theft also undermines national security, as proceeds are used to finance terrorism and money laundering.

“It’s more expensive to keep losing crude than to build the kind of monitoring infrastructure Saudi Arabia has. Nigeria has what it takes to do the same”, he stated.