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Take Over Operation Of OML 11 From Shell, Buhari Orders NNPC |RN

Buhari-on-microphone                                                     President Muhammadu Buhari

Okechukwu Nnodim, Abuja

 

President Muhammadu Buhari has ordered the Nigerian National Petroleum Corporation to take over the operatorship of the entire Oil Mining Lease 11 from Shell Petroleum Development Company.

According to a letter from State House, Abuja,  to the Group Managing Director of NNPC, dated March 1, 2019, with reference number SH/COS/24/A/8540 and signed by the Chief of Staff to the President, Abba Kyari, the President’s directive was clearly stated that the entire operatorship of OML 11 should be taken over by the NNPC/Nigeria Petroleum Development Company not later than April 30, 2019.

NPDC is the flagship oil exploration and production subsidiary of the NNPC and the liaison office of the company acknowledged receipt of the letter on March 5, 2019.

The letter from the Presidency to the NNPC, which had its title as, ‘Operatorship of Entire Oil Mining Lease 11,’ read in part, “Kindly note that the President has directed NNPC/NPDC to take over the operatorship, from Shell Petroleum Development Company, of the entire OML 11 not later than 30 April 2019, and ensure smooth re-entry given the delicate situation in Ogoniland.”

It added that the President has “directed NNPC/NPDC to confirm by 2 May 2019, of the assumption of the operatorship.”

OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. In terms of production, it is one of the most important blocks in Nigeria.

The terrain is swampy to the south with numerous rivers and creeks. Port Harcourt is located in the northwest of the block, while the major yard and logistics base at Onne is located by the Bonny River. The Bonny oil terminal – the largest in Nigeria – and Nigeria LNG (NLNG) are both located at Bonny.

When contacted, the Media Relations Manager, Shell Nigeria, Bamidele Odugbesan, declined to comment on the matter, as he specifically told our correspondent that he would not speak on the issue.

The Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, also did not answer his telephone when contacted and had yet to respond to a text message on the matter up till the time of filing this report.

It was, however, gathered from sources at the Federal Ministry of Petroleum Resources in Abuja that there were four partners in the OML 11 joint venture.

“If you are talking about that operatorship, you are talking about a joint venture where you have four partners and you can pick any of the partners to run the asset on behalf of others. And whoever runs the asset will account to the partners when it comes to the sharing table,” a source at the FMPR said.

The source added, “So if you look at some deep water projects or if you look at the OPL 245, that is Zabazaba for instance, it is operated by Agip but Shell has 50 per cent stake in it. So if tomorrow Agip says it does not want to operate the asset anymore and asks Shell to come and operate it, that won’t change anything. Rather it is only the operatorship that will change.”

It was also gathered that the NNPC owns 55 per cent shares in the OML 11 partnership, while Shell, Total and Agip own 30, 15 and five per cent respectively in the joint venture.

Officials at the FMPR stated that the operatorship of the asset, based on the latest directive of the President, had moved from Shell to NPDC, the flagship oil exploration and production subsidiary of the NNPC.

Industry players further explained that whoever operated an OML on behalf of partners would bring in its expertise and that the NPDC had such capacity right now.

They noted that what was transferred to NNPC, based on Buhari’s order, was basically the operatorship of the OML and not the shares of the partners in the joint venture.

Our correspondent further gathered that Shell had not produced a drop of crude oil from Ogoniland for about five years and that partners were not earning revenue as a result of this.

“So if another partner is willing to run the asset, I think he should be allowed to try. Four persons own an asset and it is being run by owner number one and owner number one is not able to run the asset for several years, you can try owner number two. That’s what is happening,” another source said.  (Punch)

 

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NNPC, NPA, FIRS, Others Failed To Remit N526bn, $21bn, Says NEC |RN

Maikanti-Baru-NNPC

NNPC boss, Dr Maikanti

Olalekan Adetayo, Abuja

Eighteen Federal Government’s revenue generating agencies failed to remit N526bn and $21bn into the Federation Account between 2010 and June 2015, an audit commissioned by the National Economic Council has revealed.

The Minister of Finance, Kemi Adeosun, has therefore recommended that the affected agencies be made to refund the money.

Gombe State Governor, Ibrahim Dankwambo, disclosed this to State House correspondents at the end of a meeting of the NEC presided over by Vice-President Yemi Osinbajo at the Presidential Villa, Abuja on Wednesday.

The council chaired by the Vice-President has all state governors, Governor of the Central Bank of Nigeria and relevant ministers as members.

Dankwambo explained that the shortchanging by the agencies was detected by an audit firm, KPMG, which was contracted by the NEC to carry out a forensic audit of revenue remittances to the Federation Accounts by the NEC.

The governor listed the government agencies indicted of underpayment by the audit report to include the Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Nigeria Customs Service, Nigerian Ports Authority, Nigerian Maritime Administration and Safety Agency and the Nigerian Communications Commission.

Others are the Central Bank of Nigeria, the Department of Petroleum Resources and the Nigerian Petroleum Development Company, among others.

Apart from refunding the money, Dankwambo said a sub-committee would be set up to look into the details of the infringement.

He said those found to be criminal in nature would be handed over to the Attorney General of the Federation for action.

The governor said, “KPMG presented the report of the technical audit of RGAs, concluding that a total sum of N526bn and $21 bn was underpaid to the Federation Account.

“NEC’s Ad-hoc Committee which I head with members including governors of Edo, Kaduna, Akwa Ibom, Lagos states and the finance minister recommended refund of the amounts underpaid.

“Council adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney General of the Federation and the Legal Committee of the National Economic Council for further action.

“Council resolved to pursue the strengthening of the NNPC’s governance structure to prevent further recurrence of such gross underpayment by the NNPC and other RGAs.”

The governor said it was resolved that the audit period is extended to June 2017.

“One of the resolutions of NEC is to extend the audit to June 2017. So the audit will continue for the remaining agencies.

“It is NNOC, NPDC, DPR, Customs, Federal Internal Revenue Services, NPA, Maritime Authorities, all the revenue generating agencies and the details of the infringement are contained in the report. It is a voluminous report; there are a lot of items that are there.

“The most important decision that was taken is that a sub-committee will be set up which will be an arm of the legal committee of NEC that will look into the details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by the office of the Attorney General of the Federation.”

Zamfara State Governor, Abdulaziz Yari, said the issue of whether states should henceforth determine how much is paid as fuel subsidy and not NNPC came up at the meeting.

He, however, said a final decision on the matter would be taken at the next meeting.

He said, “We are doing the nitty-gritty with the NNPC in terms of remittances. Don’t forget that the reason we got it right in 2016 on the NNPC side was that the oil prices were too low. It was easy for everyone to get fuel into the country and then make their profit.

“So, when the price started jacking up, then marketers started adjusting back because they needed to have a template of cost recovery and how they are going to make up the difference from the pump price to the landing cost of what they are importing.

“Our problem is the volume, the quantity of consumption which is not acceptable. Working with the governors, so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways.

“For instance, if you say we paid the N800bn subsidy, you will ask who are we paying the subsidy to? And if you look at the infrastructure development and capital programme of the Federal Government, it is about N1.1trn, almost 70 percent of what you are spending on developing the economy.

“If there is no infrastructure development, then you cannot talk about the development of the economy. N800bn is a huge amount that we must look at it, who is benefiting from it.

“So, we are coming up with a strategy; we are going to meet in the months of May and June. By next meeting, we will definitely come up with a position of the government at both the level of volume of what is being brought into the country and what the state and federal governments collaborate to check.”

Adeosun reported to the council that the balance in the Excess Crude Account as of May 14, 2018, stood at $1, 830, 682, 945.30.

She also reported to Council that the current balance in the Stabilisation Account as of the same day stood at N15, 725,456,963.83.

She put the balance in the Natural Resources Development Fund at N116, 104,644,763.39.

The Minister of Budget and National Planning, Udo Udoma, gave an update to council on the just-concluded Economic Recovery Growth Plan Focus Labs.

Udoma told members that the Labs identified 164 projects spread across the six geopolitical zones of the country.

He said the outcome indicated that over 500,000 jobs were likely to be created by 2020 and that more labs would be conducted in due course for other sectors.  (Punch)

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Governors Accuse NNPC Of Fraudulent Subsidy Payment |The Republican News

Maikanti-Baru-NNPC

 

…Seek ban on filling stations at border posts

Juliana Taiwo-Obalonye, Abuja

State governors yesterday accused the Nigerian National Petroleum Corporation (NNPC) of fraudulently doubling the nation’s daily petrol consumption from about 30 million litres to 60 million litres, and called for a thorough probe of oil subsidy payments from 2015 to date. 

They have also directed that all petrol stations located 10 kilometres to the nation’s borders be immediately shut down by the Department of Petroleum Resources (DPR) until they are recertified. The decision followed NNPC’s excuse that the sudden hike in petrol consumption was due to illegal export to neighbouring countries.
The governors further advocated that all trucks transporting petroleum products be installed with a tracking device in order to monitor their movement to discharge stations.

They also demanded that NNPC must henceforth clearly differentiate its earnings in sales as against taxes before remitting funds to the Federation Account to avoid unexplained shortfalls.
The states chief executives who equally raised concerns over Joint Venture Cash Call claims made by NNPC directed that further payments for such should be suspended until the corporation gives details of exactly how much has been paid since 2015.

A delegation of the governors, led by the Chairman of the Nigeria Governors Forum (NGF) and Governor of Zamfara State, Abdulaziz Yari, expressed these concerns when they met with Vice President Yemi Osinbajo at a meeting on Wednesday night at the Aso Rock Villa, on his return from his two-day official visit to Benue State.
Also in attendance at the closed-door meeting were Governors Udom Emmanuel (Akwa Ibom); Godwin Obaseki (Edo); Seriake Dickson (Bayelsa); Nasir el-Rufai, Kaduna; and Atiku Bagudu (Kebbi).

The Minister of Finance, Kemi Adeosun, and that of Budget and National Planning, Udo Udoma, as well as a representative of the NNPC GMD, also attended the meeting which ended at a few minutes after 8pm.
Yari, briefing State House Correspondents at the end of the meeting, said, “this is the second time we are meeting with NNPC in respect of remittances into the federation account.  (The Sun)

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Subsidy On Petrol Hits N1.4trillion Per Annum, Says FG |The Republican News

Maikanti-Baru-NNPC

Okechukwu Nnodim, Abuja

A total of N1.4tn is now being spent annually by the Nigerian National Petroleum Corporation as subsidy on Premium Motor Spirit, popularly known as petrol, the Federal Government has said.

Although it described the amount as under-recovery, the government stated that the national oil firm had been shouldering the huge financial burden, because the NNPC is the country’s supplier of last resort when it comes to the provision of petroleum products.

The Minister of State for Petroleum Resources, Ibe Kachikwu, who disclosed this while speaking at a Liquefied Petroleum Gas workshop organised by the Federal Ministry of Petroleum Resources in Abuja on Thursday, also stated that the ministry planned to unveil an infrastructure rebirth map for the oil and gas sector in two months.

On March 5, 2018, the NNPC announced that it was spending N774m daily (about N23.99bn monthly) as subsidy on the 50 million litres of PMS consumed across the country.

The oil firm stated that the huge under-recovery was due to the proliferation of filling stations in communities with international land and coastal borders across the country.

On Thursday, Kachikwu echoed the fact that the NNPC was spending enormous resources subsidising petrol, as he told guests at the programme that about N1.4tn had been declared as under-recovery by the national oil firm.

When asked if the N1.4tn, which he earlier mentioned in his address to participants at the workshop, was the current figure being spent by the NNPC, the minister replied, “Yes, it’s current.”

Probed further to state what the government was doing to handle the under-recovery, Kachikwu said, “Let me focus on gas. That (under-recovery) is being addressed at very high levels.”

The Group Managing Director, NNPC, Maikanti Baru, explained that the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.

Baru stated that a detailed study conducted by the NNPC indicated a strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.

He said the activities of the smugglers led to the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day, which was in sharp contrast to the established national consumption pattern.

Providing a detailed presentation of the findings, the NNPC boss noted that 16 states, having among them 61 local government areas with border communities, accounted for 2,201 registered fuel stations.

He stated that the tanks of the stations had a combined capacity of 144,998,700 litres of petrol, adding that in the same vein, eight states with coastal border communities spread across 24 LGAs accounted for 866 registered fuel outlets, with combined petrol tank capacity of 73,443,086 litres.

Baru explained that because of the obvious differential in petrol prices between Nigeria and other neighbouring countries, it had become lucrative for smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the borders.

This, he said, had resulted in a thriving market for Nigerian petrol in Niger Republic, Benin Republic, Cameroon, Chad and Togo, as well as Ghana, which has no direct borders with Nigeria.

“The NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fixed retail price of N145 per litre despite the increase in PMS open market price above N171 per litre,” Baru stated.

Kachikwu had earlier told journalists that the petroleum resources ministry was planning to unveil an infrastructure rebirth map for the country’s oil and gas sector.

He said the map, which President Muhammadu Buhari is expected to unveil in the next two months, would open up the sector to investments in critical areas.

Kachikwu stated, “There is a lot more private sector investment in upstream than there is in downstream in terms of actual infrastructure, and that is why the government is more focused on upstream. We are also hoping to launch an infrastructure rebirth map for the oil sector over the next two months. And I hope the President will launch it.

“And the effect of that will be to open up the tariff, create policy positions that will enable people to go in and invest in critical infrastructure that is needed. Because everywhere you look, whether it is the distribution of petroleum products, it is done massively through trucks rather than through pipelines.

“Now, whether it is to take crude to refineries or whether it is being able to distribute gas all over the country, infrastructure is so key. There is a lot of stranded gas everywhere, lots of stranded power everywhere; distribution is key, infrastructure is key. We need to find a way or find enough incentives that will enable the private sector to go in very bullishly and put the money where it is supposed to be.”   (Punch)

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NNPC Pays N.8bn Subsidy Daily Due To Smuggling – Baru |The Republican News

NNPC pays N774m subsidy daily because of smugglers, Baru claims
By Editor

The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has claimed that the corporation is currently incurring an under-recovery (another term for subsidy) of N774 million daily.

He blamed the development on dubious activities of those who smuggle the product to neighbouring countries, which have increased fuel consumption in Nigeria to 50 million litres per day.

Under-recovery in clear terms means that NNPC is paying the cost of the differential between the official pump price of petrol and the actual cost of it.

A statement released by the corporation in Abuja quoted Baru as making this claim when he led top management team of the NNPC on a visit to the Comptroller-General of Nigeria Customs Service, Col. Hameed Ali (Retd).

Baru during the visit maintained that the activities of the smugglers had resulted in the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day.

The NNPC GMD, who said that the development was in sharp contrast to established national consumption pattern, also raised an alarm on the proliferation of fuel stations in communities with international land and coastal borders across the country, insisting that the development had energized unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in the country.

According to Baru, a thorough study conducted by the NNPC showed a strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.

Providing a detailed presentation of the findings, Baru hinted that 16 states, having among them 61 local government areas with border communities, account for 2,201 registered fuel stations, and that the stations had a combined capacity of 144.998 million litres of petrol, about four times more than Nigeria’s average fuel consumption of 35 million litres daily.

The NNPC boss further stated that because of the obvious differential in petrol price between Nigeria and other neighbouring countries, it had become lucrative for the smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the border.

This he said, had led to a thriving market for Nigerian petrol in all the neighbouring countries of Niger Republic, Benin Republic, Cameroun, Chad and Togo and even Ghana which has no direct borders with Nigeria.

He said, “NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fix retail price of N145 per litre, despite the increase in PMS open market price above N171 per litre.”

In his response, Ali assured that the Customs would work with the NNPC to stop the cross-border smuggling of petroleum products.

Adding that all hands must be on deck to ensure the economic survival of the country. (Ripples Nigeria)

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Despite NNPC’s Promises No Petrol In Our Depots – DAPPMA |The Republican News

Maikanti-Baru-NNPC

GMD of the NNPC, dr Maikanti Baru

Okechukwu Nnodim and ’Femi Asu

As fuel queues grew shorter at some filling stations in Lagos on Tuesday, oil marketers under the aegis of the Depot and Petroleum Products Marketers Association said they did not have Premium Motor Spirit in their tanks.

DAPPMA said its members had not received petrol in their depots despite the recent announcement by the Nigerian National Petroleum Corporation that it had started offloading products in depots across the country.

Many filling stations, particularly those run by independent oil marketers in Lagos and Abuja, were closed on Tuesday, while queues of motorists and other petrol seekers persisted in front of the few stations that dispensed the product in the Federal Capital Territory and other near-by states.

The Executive Secretary, DAPPMA, Mr. Olufemi Adewole, said in a statement, “While we cannot confirm or dispute the NNPC’s claims of having sufficient product stock, we can confirm that the products are not in our tanks and as such cannot be distributed. If the products are offshore, then surely, they cannot be considered to be available to Nigerians.”

Adewole stated that DAPPMA members were ready to undertake 24-hour loading and truck-out if petrol was provided to them by the Petroleum Products Marketing Company.

“The NNPC imports and distributes through DAPPMA, Major Oil Marketers Association of Nigeria and Independent Petroleum Marketers Association of Nigeria. Our members pay the PPMC/NNPC in advance for petroleum products, and fully paid up PMS orders that have neither been programmed nor loaded are in excess of 500,000 metric tonnes, about 800 million litres as of today, and enough to meet the nation’s needs for 19 days at a daily estimated consumption of 35 million litres,” he said.

Adewole further stated that the unending fuel crisis was due to the challenges in the Direct Sales, Direct Purchase scheme, rising price of crude in the international market and the high interest rates charged by Deposit Money Banks on loans obtained by marketers.

He said, “We all know that we presently run a fixed price regime of N145 per litre for PMS without any recourse to subsidy claims. However, we also have no control on the international price of crude oil.

“We understand that the NNPC meets this demand largely through its DSDP framework. However, due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum products, especially PMS, to the NNPC. This is the main reason for this scarcity.”

According to him, anytime the NNPC assumes the role of sole importer, there are issues of distribution, because marketers own 80 per cent of the functional receptive facilities and retail outlets in the country.

“Sadly, some people have blamed marketers for hoarding fuel. Unfortunately, this is so far from the truth. Hoarding of fuel is regarded as an economic sabotage and we assure all Nigerians that our members are not involved in such illicit acts,” Adewole added.

According to a top official of a Lagos-based oil marketing company, who spoke to one of our correspondents on condition of anonymity, 80 per cent of the petrol being imported by the NNPC were going to the major marketers, while the rest go to depots with which the NNPC had throughput arrangement and others.

The National Operations Controller, IPMAN, Mr. Mike Osatuyi, said there was improvement in loading at the NNPC depot in Ejigbo, Lagos, adding, “But the NNPC needs to collaborate with the private depots that have facilities to use and can push out the product to members of IPMAN. So, it has to sell the product to private depots it has throughput agreement with.

“We are not saying the NNPC does not have the product. But it has to get to where they can discharge it and load it to our members. You know there was no banking activity in the last four days, and our members pay before loading unlike majors that can get the product on credit. But I believe from tomorrow (Wednesday) when banks resume, there will be more payments into the NNPC system and there will be more loading.”

When contacted to react to the claim by DAPPMA that its members had no PMS in their various depots, the Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, said, “We are verifying the authenticity of that claim because we have been supplying them with products. Even as of yesterday (Monday), we supplied products to the depots.

“However, they (DAPPMA) should complement the efforts of the NNPC. We have been supplying DAPPMA and MOMAN with products. We are replenishing their stock.”

Meanwhile, some motorists, who spoke to The PUNCH as they queued for petrol in different filling stations in Abuja, said they were fed up with government and its agencies with respect to the fuel crisis that has dragged on for about a month.

Odunayo Toyosi, a motorist who spoke at the Forte Oil filling station opposite the Trancorp Hilton, Abuja, said, “All government agencies and officials that are responsible for this untold suffering on Nigerians should be ashamed of themselves right now. They have failed woefully!”

Another motorist at the NNPC mega station on the Kubwa-Zuba Expressway, Gideon Etuk, said, “We’ve never witnessed petrol scarcity that dragged like the one we are going through right now. The NNPC and other government officials who usually come out to speak on this matter should please keep quiet because they are obviously clueless right now.”  (Punch)

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