Oil & Energy

NNPC To Introduce New Business Models For Viability

Published

13 years ago

December 24, 2012

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

NERC, OYSERC Partner To Strengthen Regulation

Published

7 days ago

February 23, 2026

The Tide

THE Nigerian Electricity Regulatory Commission (NERC) has stressed the need for strict adherence to due process in operationalizing state electricity regulatory bodies.

It, however, pledged institutional and technical support to the Oyo State Electricity Regulatory Commission (OYSERC).

The Chairman, NERC, Dr Musiliu Oseni, who made the position known while receiving the OYSERC delegation, emphasised that the establishment and take-off of state commissions must align fully with the law setting them up.

Oseni said that the NERC remains committed to partnering with State Electricity Regulatory Commissions (SERC) to guarantee their institutional stability, operational effectiveness and long-term success.

He insisted that regulatory coordination between federal and state institutions is critical in the evolving electricity market framework, noting that collaboration would help to build strong institutions capable of delivering sustainable outcomes for the sector.

Also speaking, the Acting Chairman, OYSERC and leader of the delegation, Prof. Dahud Kehinde Shangodoyin, said that the visit was aimed at formally introducing the commission’s acting leadership to the NERC and laying the groundwork for a productive working relationship.

Shangodoyin said , the acting members were appointed to provide direction and lay a solid foundation for the commission during its transitional period, pending the appointment of substantive members.

“We are here to formally introduce the acting leadership of OYSERC and to establish a working relationship with NERC as we commence our regulatory responsibilities,” he said.

He acknowledged NERC’s readiness to provide technical and regulatory support, particularly in the area of capacity development, describing the backing as essential for strengthening the commission’s operations at this formative stage.

“We appreciate NERC’s willingness to support us technically and regulatorily, especially in building our capacity during this transition,” he added.

Oil & Energy

NLC Faults FG’s 3trn Dept Payment To GenCos

Published

7 days ago

February 23, 2026

The Tide

The Nigeria Labour Congress and the Association of Power Generation Companies have engaged in a showdown over federal government legacy debt.

NLC president Joe Ajaero has faulted the federal government’s move to give GenCos N3 trillion from the Federation account as repayment for a power sector legacy debt, which amounts to N6.5 trillion.

In a statement on Thursday, Ajaero said the Federal Government proposed the N3 trillion payment and the N6 trillion debt as a heist and grand deception to shortchange the Nigerian people.

“Nigerians cannot and should not continue to pay for darkness,” Ajaero stated.

Meanwhile, the Chief Executive Officer of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji, said Ajaero may be ignorant of the true state of things, insisting that the federal government is indebted to GenCos to the tune of N6.5 trillion.

She feared the longstanding conflict could result in the eventual collapse of the country’s power.

According to her, the federal government’s N501 billion issuance of power sector bonds is inadequate to address its accumulated debt.

Oil & Energy

PENGASSAN Rejects Presidential EO On Oil, Gas Revenue Remittance ……… Seeks PIA Review

Published

7 days ago

February 23, 2026

The Tide

The Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Festus Osifo, has faulted the public explanation surrounding the Federal Government’s recent oil revenue Executive Order(EO).

President of the association, Festus Osifo, argued that claims about a 30 per cent deduction from petroleum sharing contract revenue are misleading.

Recall that President Bola Ahmed Tinubu, last Wednesday, February 18, signed the executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.

The order also scrapped the 30 per cent Frontier Exploration Fund under the PIA and stopped the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited.

In his reaction, Osifo, while addressing journalists, in Lagos, Thursday, said the figure being referenced does not represent gross revenue accruing to the Nigerian National Petroleum Company Limited.

He explained that revenues from production sharing contracts are subject to several deductions before arriving at what is classified as profit oil or profit gas.

Osifo also urged President Bola Tinubu to withdraw his recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.

He warned that the directive undermines the Petroleum Industry Act and could create uncertainty in the oil and gas industry, insisting that any amendment to the existing legal framework must pass through the National Assembly.

Osifo argued that an executive order cannot override a law enacted by the National Assembly, describing the move as setting a troubling precedent.

“Yes, that is what should be done from the beginning. You can review the laws of a land. There is no law that is perfect,” he said.

He added that the President should constitute a team to review the PIA, identify its strengths and weaknesses, and forward proposed amendments to lawmakers.

“When you get revenue from PSC, you have to make some deductibles. You deduct royalties. You deduct tax. You also deduct the cost of cost recovery. Once you have done that, you will now have what we call profit oil or profit gas. Then that is where you now deduct the 30 per cent,” he stated..

According to him, when the deductions are properly accounted for, the 30 per cent being referenced translates to about two per cent of total revenue from the production sharing contracts.

“In effect, that deduction is about two per cent of the revenue of the PLCs,” he added, maintaining that the explanation presented in the public domain did not accurately reflect the structure of the deductions.

Osifo warned that removing the affected portion of the revenue could have operational implications for NNPC Ltd, noting that the funds are used to meet salary obligations and other internal expenses.

“That two per cent is what NNPC uses to pay salaries and meet some of its obligations.The one you are also removing from the midstream and downstream, it is part of what they use in meeting their internal obligations. So as you are removing this, how are they going to pay salaries?” he queried.

Beyond the immediate impact on the company’s workforce, he cautioned that regulatory uncertainty could affect investor confidence in the sector.

“If the international community and investors lose confidence in Nigeria, it has a way of affecting investment. That should be the direction. You don’t put a cow before the horse,” he added.

According to him, stakeholders, including labour unions and industry operators, should be given the opportunity to make inputs at the National Assembly as part of the amendment process saying “That is how laws are refined,”