New NNPCL Consolidation Deals And Crude Oil Production Benchmark, By Emmanuella Anokam
The Petroleum Industry Bill (PIB) was first presented to the National Assembly in 2008, during the leadership of President, Umar Yar’Adua, now late.
Energy experts were confident that the bill would turn around the misfortunes of the oil and gas industry in the country.
In spite of the several roadblocks encountered then, the experts knew that it was a matter of time for things to begin to take shape, as European and American companies dominated the nation’s oil exploration.
Shell Petroleum Development Corporation, Chevron, Total Energies and ExxonMobil had being the front liners.
Attempts were made to incorporate companies from China, Saudi Arabia and India into the country’s oil exploration.
However, but the existing Nigerian laws would not allow the leasing of oil wells to prospective companies from abroad since most of the Oil Mining Leases (OMLs) were in firm grip of the existing International Oil Companies (IOCs).
The firms had held the OMLs for many years before the bill was proposed, and to change the situation, an overhaul was needed in the country’s energy law. Interestingly, this development necessitated the introduction of the PIB.
Furthermore, the expectation of the proposed reform in the oil industry was that the sector would be free from government control in a deregulated environment and at the same time unbundle the Nigerian National Petroleum Company Limited (NNPCL).
It was like prayers answered when the former administration of Muhammadu Buhari signed the bill into law in August 2021.
Forty eight hours after signing the legislation into law, Buhari approved a steering committee to oversee its implementation, stressing that Nigeria lost an estimated $50 billion worth of investments in just 10 years.
Buhari was quoted by the media as saying that the loss was created by the uncertainty of non-passage of the PIB.
It was on this premise that Malam Mele Kyari, the Group Chief Executive Officer (GCEO), NNPCL, recently made moves to set new investment benchmark post Petroleum Industry Act (PIA) 2021.
The NNPCL had sealed multiple deals running into over $48.15 billion to rejuvenate the hitherto inept company.
Other key investment project slated for Final Investment Decisions (FID) by the NNPCL, include the $25 billion West African Gas Pipeline project (Nigeria-Morocco gas pipeline).
The company will stake $12.5 billion to secure a 50 per cent equity and the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline project among others.
Also, in its quest to boast it financial base, the Nigerian government in June 2022 renewed talks with Algeria and Niger to kickstart the $13 billion (€12.8 billion) Trans-Saharan Gas Pipeline (TSGP).
No wonder oil and gas experts were full of expectations that with time, things would turn around for good in the sector.
Associate Professor of Energy and Natural Resources, Olanrewaju Aladeitan, told News Agency of Nigeria (NAN) that what NNPCL was doing with the Trans-Sahara Gas Pipeline (TSGP) project was what Nigeria should have done in 1970s, or thereabout.
He said that Nigeria would have been taking advantage of the vacuum created by the non-supply of oil to Europe by Russia and expand its gas projects penetration the European market.
“If we had done that, by now we would be smiling to the bank because we would have utilised the opportunity of market that was left by the withdrawal of Russia.
“So if we can achieve the same aim through the Trans-Sahara pipeline, it will be fine.
“We also have the West African Gas Pipeline, which passes through Benin Republic, Togo to Ghana, and that has also been in the works for some time.
“This is what has informed Nigeria looking at constructing these pipelines to Europe and the gas can flow from there,” he said.
The need for the NNPCL model of investments was also highlighted at the Nigeria International Energy Summit (NIES 2023).
Speaking during business leaders and regulatory dialogue session at the event, Mrs Nkechi Obi, Group Managing Director of Techno Oil Limited, called for significant investments and infrastructure to achieve global energy mix and sustainable energy.
The firm is an indigenous oil and gas company,
“There are about eight mitigants to achieving the global energy mix but the provision of infrastructure, reduction in biomass and fossil fuel were key to achieving success, especially in the downstream sector.
“Nigeria needs an enabling environment to drive investments to position itself strategically in view of global trend to transit to cleaner energy.
“She said the passage of the Petroleum Industry Act (PIA 2021) was a big relief in pursuit of a cleaner energy”, she said.
Obi’s call was not different from what the country is trying to achieve through the investments embarked upon by the NNPCL, as gas is expected play a bigger role in the global energy mix and that Nigeria had enough of it to drive the industry.
Mr Olabode Sowunmi, Senior Legislative Aid to the former Senate President on Gas and Power said the industry particularly the gas sector, offers Nigeria great opportunities for industrialisation.
Sowunmi advocated consistency in the Nigeria Gas Master Plan, especially on projects such as AKK, Trans-Saharan Gas Pipeline and West African Gas Pipeline.
He expressed satisfaction that some reforms have started in the industry in view of the implementation of the PIA 2021.
Besides the multiple investments stakes, the company under the leadership of Kyari, has also taken positive measures aimed at blocking the loopholes in crude oil leakages, theft and vandalism.
Energy experts say the step is expected to propel NNPCL into a global profit-making brand like other major oil giants across the globe.
In pursuit of this role, the company in the last 24 months engaged in exploring new business ventures, investment opportunities.
It has also taken measures that had seen the nation’s dismal crude production of less than a million barrels per day increase to over 1.6 million barrels per day in the last 12 months.
The company successfully signed and acquired a 20 per cent Federal Government stake in the Dangote 650,000-barrel-per-day oil refinery for $2.76 billion.
It also secured over $3 billion local and foreign investment interests in the Kolmani Integrated Development Project.
The Kolmani project houses a 120,000-barrels per day refinery, a 500-million standard cubic feet per day gas processing plant, a 300-megawatt capacity power plant, and a fertiliser plant of 2,500 tons per day.
Earlier in 2023, the NNPC Renewed Oil Production Pact With its Partners For 10 billion barrel aimed at putting an end to the protracted dispute between the state-owned company and the contractor parties in OMLs 128, 130, 132 and 133, as well as 138 PSCs.
The agreements are the Production Sharing Agreement, Dispute Settlement Agreements, Settlement Repayment Agreement, and Escrow Agreement.
The signing of the agreement took place at the NNPC headquarters office in Abuja.
According to the NNPC Limited, the signing of the new PSCs is a key milestone achievement, which will ultimately unlock opportunities within the Nigeria upstream sector.
Only last Thursday, the NNPCL signed a Heads of Terms (HoT) agreement with UTM Offshore Limited for the construction of the nation’s first indigenous floating liquified natural gas (LNG) project with a $5.6 billion funding package from Afreximbank.
Speaking on the UTM deal, Mr Garba Deen Muhammad, Chief Corporate Communications Officer, NNPCL, in a statement said the agreement was a step towards bolstering Nigeria’s energy security and promoting the utilisation of its abundant gas resources.
“In a major step towards bolstering Nigeria’s energy security and promoting the utilisation of its abundant gas resources, the NNPC Ltd and UTM Offshore Limited have today in Abuja signed a Heads of Terms (HoT) agreement.
“It is for the construction of the nation’s first indigenous Floating LNG project,” the company said.
The NNPCL as a company grew its profit after tax from N287 billion in 2020 to N674 billion in 2021.
It would be recalled that for the first time in the history, the company, last Thursday, July 20, 2023, it commenced the payment of interim dividend and Petroleum Sharing Contracts (PSC) profit oil into the Federation Account Allocation Committee (FAAC) with the of N123 billion.
A breakdown of the amount showed that the National Oil Company paid N81 billion as monthly interim dividend and N42 billion as 40 per cent PSC profit oil, this is in addition to compliance on payment of royalties and taxes.
Commenting on the NNPC Limited’s performance, Mr Horatius Egua, spokesman of the immediate past Minister of State for Petroleum Resources, Chief Timipre Sylva, said Sylva’s in ensuring the passage of the PIA was instrumental to the new feats.
According to Egua all that NNPC Limited has achieved today would not have been possible if the Petroleum Industry Bill (PIB) was not passed into law.
“Thumbs up must be given to Chief Sylva, the leadership of the National Assembly and former President Muhammadu Buhari”, he said.
He also praised Kyari for providing the leadership in the NNPCL that had enabled the company attain its present status.
“It is one thing to have a law but if you don’t have competent people to drive and implement that law, it becomes useless.
“So Malam Kyari has done well in his own capacity as the boss of the NNPC Limited.
“However, he needs to do more to take the company to a greater height like the Saudi Aramco, China Petroleum & Chemical Corp., Exxon Mobil Corp., and others,” he said.
NANFeature (www.nannews.ng).
The Presidency has reacted to report in some news media outlets that the Federal Government has increased tuition fees in federal universities in the country, insisting that all the federal universities remain tuition-free.
Bad Leadership Does Not Spare Anyone From Pains, By Ugochukwu Ejinkeonye
Many Nigerians are stuck with zero experience of what it means to live in a decently run society. Laden with a long history of mostly inept, insensitive and less-than patriotic leaders, it seems abnormal to expect any bit of improvement in their daily existence from any government. Massive infrastructural decay due to criminal neglect and regular reports of primitive accumulations of illicit wealth by wayward and light-fingered public officers have since lost their capacities to shock Nigerian masses.
In fact, most people have since adjusted their lives to perennially absorb the vicious impacts of these debilitating vices. They only extract some bit of cold comfort from continually reassuring themselves that they are in such a hopeless and helpless situation where these excruciating fallouts of leadership failure will remain the resilient, inseparable companions they are condemned to perpetually coexist with – which will always be there to severely hurt their country and diminish their joy, peace and fulfillment.
Those who lack personal resources to obtain some form of alleviation for themselves and their families resign themselves to fate hoping that they would be able to sustain the capacity to continue enduring these searing rewards of successive rudderless leaderships – which will remain their perpetual sources of torments.
Even the Nigerians who reside in well-ordered societies, where leaders are accountable and basic amenities are meticulously provided and maintained, once they touch down on Nigerian soil automatically adjust their minds to endure the excruciating realities of life in Nigeria. They only derive some consolation from the fact that they would soon jet out again to where sanity and orderly existence are taken for granted.
And so, when it is election season and this set of disenchanted and disoriented Nigerians are ready to vote, they do not even bother to interrogate the character, antecedents, hollow promises and other antics of the candidates having concluded that they are all the same – members of the same cult of corruption and ineptitude; rather they would seek to extract some ephemeral emotional satiation from lending their support to a candidate who shares the same ethnic or religious identity with them. At least, they can always derive some comfort (or even animation) from the fact that their “brother” or “sister” had also joined the rampaging band of locusts, and that their votes had helped to achieve that “feat” for their own people!
Some others will eagerly accept contaminated crumbs from the tables of these same callous, thieving politicians who have cruelly impoverished them and mortgaged the future of their children and go all out to promote and mobilize voters and even fight for them to ensure they capture elective offices to continue their boundless looting of the public treasury.
Unfortunately, in Nigeria of today, the bad, shattering news is that there is hardly any green vegetation left anywhere again for the locusts to swoop on and devour! What we have all over the place are long stretches of excruciating aridity which only rewards with poverty and hardship all that are unlucky to have Nigeria as their home at this time, except the treasury looters and their accomplices.
A few months before the expiration of the Muhammadu Buhari regime, the London-based Economic Intelligence Unit (EIU), the research and analysis division of the Economist Group, told the world what most people already knew, namely, that Nigeria’s “debt service payments in the first four months of 2022 totalled N1.9trn, which was greater than its total revenue of N1.6trn, according to the 2023‑2025 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) draft presented by the Finance, Budget and National Planning Minister, Zainab Ahmed, on July 21st.”
In plain language, what we were told was that the amount being spent to service the huge debts accumulated by the Buhari regime, as a result of reckless borrowings, including the USD1.96 billion foreign loan for the construction of an undesirable rail line from Nigeria to Niger Republic, had far exceeded our country’s income, forcing Nigeria into the perilous state of compounding its debt burden by borrowing more money to service debts!
Also, the Excess Crude Account (ECA), Nigeria’s savings for the rainy day, which stood at $2.1 billion when Buhari became president, instead of increasing, had by June 2022 been brutally reduced to $35.7 million. By July of the same year, it plunged further down to $376,655. It would be a huge surprise to hear that as much as one cent remained by the time the Buhari regime exited power on May 29, 2023.
And so clearly at sea as to how to get Nigeria out of the sticky pit it was willfully dragged into on his watch, Buhari sought to derive revolting animation from playing the profligate big brother out there, dolling out USD$1 million to Afghanistan and approving N1.14 billion for the purchase of posh SUVs for Niger Republic to “strengthen their security operations” while the country he pretended to be ruling was scarily submerged in worsening insecurity. No wonder he threatened the other day to escape to Niger Republic if anyone disturbed him in his palatial country home in Daura, Katsina State.
For about eight months last year, the Academic Staff Union of Universities (ASUU) was on strike due to very poor working conditions, and hapless parents were forced to watch the unsightly and devastating spectacle of their children’s future being toyed with by insensitive politicians whose own children were mostly studying in quality schools and colleges in better managed countries of the world.
When will Nigerians realize that each time they are deluded by politicians into allowing primordial sentiments to dictate their choices during elections, that they are only empowering their sworn enemies to continue their perpetual impoverishment and continuous devaluation of their lives and those of even their unborn offspring? Shortly after the elections, the politicians they had naively adopted as their “native idols” will hurriedly converge with their “bitter opponents” of a few days ago to plan how to share the nation’s resources, thumbing their delicate noses at their so-called supporters who had foolishly cultivated lasting enmities with neighbours and friends with whom they had enjoyed many years of cordial, beneficial relationships while campaigning and even fighting to rig in their “brother” or “sister” whom they have never met and might never meet?
Until Nigerians decide that only competent and patriotic managers should be allowed to take over the leadership of Nigeria at the national, state and council levels and steer the country away from its determined path of disaster, Nigeria, already miserably broke and prostrate, will fail beyond what anyone had thought was possible in a country ruled by human beings.
By the way, how do candidates even emerge in Nigeria? Are they chosen on merit? Does anyone among their party delegates bother about their capacity and character? At the national conventions of the two faces Nigeria’s terminal affliction, the All Progressives Congress (APC) and Peoples Democratic Party (PDP), the delegates that voted to choose their presidential candidates for the 2023 elections were reportedly bought soul and body with crispy wads of US dollars – an unwholesome indulgence that unleashed further hurt on the economy. This was apart from the hundreds of millions of naira earlier squandered to purchase nomination forms and sort out other logistics.
Now, after investing all these millions of dollars and billions of naira to secure their parties’ tickets alone and then more billions to prosecute the campaigns and buy votes from willfully impoverished Nigerians who are ready and eager to sell their future to assuage their hunger, what would be the first mission of such candidates once any of them captures power? But will Nigerians learn anything from this gloomy reality and apply themselves to wisdom in future elections for their own good?
If Nigerians continue to allow themselves to be deluded every now and again by ethically bankrupt politicians to discard character and competence and vote on the basis of ethnicity or religion or both, they will all be here to continue suffering the consequences of their tragic decisions.
A new government is in town now and the cost of living has gone to the skies as poor Nigerians are asked to make sacrifices while those in power swim in obscene opulence. Since many adult Nigerians were born, every new government has asked them to tighten their belts in order to enjoy a rosy tomorrow; but can anyone point to at least one single benefit that such punitive measures inflicted on the hapless people ever brought? What we usually see is that after sometime, things would get worse and more sacrifices would be demanded. This will continue until the particular regime quits power and the new one will come in with a reworded version of the same deceptive language: suffer today and enjoy tomorrow! A pie in the sky meant to tantalize and delude the unwary and tragically naïve people who have stubbornly refused to learn from their past mistakes!
Each time Nigerians go to the polls with the wrong reasons and vote or rig in mostly corrupt and incompetent candidates, all they have done is to help the perpetuation of the unimaginable suffering they are currently writhing under. Yet, despite this self-hurting preference, many of them still wallow in the grand illusion that a patriotic and competent administration will emerge to lighten their burdens and mitigate their sufferings. But is it not foolish to continue to plant mango trees every season and expect them to produce apples? How can a people persist in the fatal indulgence of stubbornly eating and drinking poison and yet expecting to live and flourish?
Indeed, the excruciating pains of corruption and incompetence in leaders at all levels have no tribal marks. They do not unleash their torments with any discrimination. They viciously attack everyone irrespective of his or her place of origin, voting preference or even the tribal marks of the new misruler they have helped to enthrone.
Nigerians from Katsina, Buhari’s home state, or even the entire North that persistently gave him the loudly trumpeted twelve-million votes, can attest to this. Their region received the lion share of the boundless insecurity and excruciating poverty that distinguished Buhari’s eight-year nightmare.
*Ugochukwu Ejinkeonye, a journalist and writer.