Oil & Energy
Revisit Oil Assets Transfer To NPDC – NEITI
The Nigeria Extractive Industries Transparency Initiative (NEITI) has urged the Federal Government to revisit oil assets transfer by Nigerian National Petroleum Corporation (NNPC) to its subsidiary, Nigeria Petroleum Development Company (NPDC).
Executive Secretary of NEITI, Mr Waziri Adio, made the call in a statement by the agency’s Director, Communications, Dr Orji Ogbonnaya Orji, in Abuja, recently.
Adio said that review of the transfer was imperative in view of the “under-valuation, non – payment for the assets and the inability of the NPDC to make returns on the investments’’.
He urged that NPDC should be accountable to the federation over its management of the oil assets in its custody.
Adio said that NEITI had found out that total unremitted revenue to the federation by the NPDC was about 5.5 billion dollars and another N72.4 billion.
He said that NEITI had observed that beyond the unremitted monies, there were issues of transparency and efficiency with the operations of NPDC.
According to him, since 2005, NNPC had transferred 16 Oil Mining Licenses (OMLs) to NPDC.
The executive secretary added that the process of transfer of these assets raised serious questions as there appeared to be no clear-cut criteria for transfer of oil mining assets to NPDC.
“The process for the transfer of the Federation’s assets to NPDC does not seem to pass the transparency test.
“One of the upshots of this is the undervaluation of these assets, thereby depriving the Federation of optimal value for the assets.
“The undervaluation NEITI reported results from NNPC’s divestment of its 55 per cent shares in the Shell Joint Venture which it valued at 1.8 billion dollars.
“PriceWaterhouseCoopers’ valuation of the same assets was 3.4 billion dollars,’’ he said.
He disclosed that four other assets were divested in 2012 by NNPC to NPDC under the Nigerian Agip Oil Company Joint Venture (NAOC JV) which the Department of Petroleum Resources (DPR) valued at 2.22 billion dollars.
Adio said that NPDC was contesting the valuations but was currently operating 12 OMLs without paying in full, the undervalued rates or the new figures by the auditor and the DPR.
He said that in total, the non-payment for the 12 oil blocks by NPDC summed up to 3.93 billion dollars.
He questioned the situation where NPDC deliberately refused to be accountable in its management of Nigeria’s oil assets entrusted in its care.
Adio said that NPDC had consistently declined to give account of its operations and its management of national oil assets in its possession.
He explained that NPDC also failed to cooperate with the forensic audit ordered by the Auditor-General of the Federation in 2015.
“Similarly, the company failed to cooperate with NEITI for five audit cycles and only partially cooperated during the 2013 and 2014 audits.
“In the Policy Brief, NEITI also expressed concerns over NPDC’s technical expertise and financial capability to manage Nigeria’s oil assets.
“ Also, NPDC’s lack of finances has been evident since 2010 when the company resorted to Strategic Alliance Agreements (SAAs) with indigenous oil companies to carry out production on the fields in its possession,”.
Adio said if NPDC was established to foster indigenous participation in upstream sector, it had not in the past three decades, demonstrated ability to either maximize its production capacity or showed financial muscle to operate independently.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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