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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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No Subsidy In Oil, Gas Sector — NMDPRA

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

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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.
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NEITI Blames Oil, Gas Sector Theft On Mass Layoff 

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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.
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