The Nation Newspaper

Tag: Department of Petroleum Resources (DPR)

  • PIB: Senate scraps NNPC, creates three new agencies

    PIB: Senate scraps NNPC, creates three new agencies

    At last, the Senate on Thursday passed the Petroleum Industry Bill (PIB), putting paid to the controversy that dogged the bill ford over 10 years.

    Some of the highlights of the bill is the scraping of the Nigerian National Petroleum Corporation (NNPC) and the merging of the Department of Petroleum Resources (DPR), Petroleum Products Pricing, Regulatory Agency (PPPRA) and the Petroleum Equalisation Fund (PEF) into one agency.

    To replace the NNPC are the National Petroleum Company (NPC) and Nigerian Petroleum Assets Management Company (NPAMC), to ensure efficient and effective commercial performance. The new bill also streamlined the role of the Petroleum Minister.

    According to the bill, the NPC and the NPAMC will be under the supervision of a newly created Petroleum Regulatory Commission (PRC).

    The PRC “shall be the Industry Regulator and Watchdog, responsible for licensing, monitoring, supervision of petroleum operations, enforcing laws, regulations and standards across the value chain”, the bill added.

    Under the envisaged regime, the PRC will also absorb the DPR, PPPRA and the PEF, “to ensure efficient and effective commercial performance in the petroleum sector”

    It is also geared toward creating efficient and effective governing institutions with clear and separate roles for the petroleum industry, in addition to establishing a framework for the creation of commercially oriented and profit driven petroleum entities.

    This, according to the bill, will ensure value addition and internationalization of the petroleum industry, promote transparency and accountability in the administration of petroleum resources and foster a conducive business environment for petroleum industry operations.

    Other highlights of the bill is a provision in section 26(3) where it gives the regulatory commission 10% cost of collection of revenues from other commercial agencies.

    “The Commission shall establish and maintain a fund (‘the Fund’) from which all expenditures incurred by the Commission shall be defrayed. The NPRC is also empowered by the bill to spend ten percent of what it generates for its operations”, the provision added.

    The lawmakers rejected the controversial 10% Host Fund that led to disagreements among various interests in the past, leading to long delay in the passage of the bill.

    The Senate deferred work on the Host Community Fund and fiscal aspect of the bill till later date.

    The chairman, Senate committee on Petroleum (Upstream), Senator Tayo Alasoadura, said the bill would create more jobs for Nigerians and also foster a conducive business environment for petroleum operations when signed into law.

    According to him, the bill promises immense benefits for local operations in the petroleum industry.

    Alasoadura added that with the bill, it will become illegal to employ foreigners for certain skills that can be sourced locally.

    “And even where such skills are sourced from abroad, due to unavailability locally, it would be mandatory for Nigerians to understudy such an expatriate”, he added.

    The senator further stated that the PIB will not only enhance exploitation and exploration of petroleum resources in the country, it will also increase power generation and industrial development capacity through abundant domestic gas supply.

    The committee chair also said that the law would also create profit-driven oil entities, encourage investment in the nation’s petroleum industry and tremendously increase government’s revenue.

    “Government revenue from oil industry will increase. This means more funds in the hands of government to engage in developmental activities. The downstream sector will become fully deregulated. In other words, subsidy will be totally removed”.

    The envisaged law, he continued, will also bring about a fully deregulated and liberalized downstream petroleum sector, create efficient and effective regulatory agencies and promote the development of Nigerian local content in the oil industry.

    He said, “Besides, emphasis on local content will not only be in the area of skills, but would also be applicable to material sourcing. This means more jobs for Nigerian local contractors, especially those from the oil producing regions”,

    “The PIB vests ownership and management of all petroleum resources, offshore or onshore, in the Federal Government of Nigeria, which is to manage them on behalf of all Nigerians.

    “This means that irrespective of where the oil is found, it belongs to the government of Nigeria. Of course, equity calls for special consideration for localities where the resources are mined. This is taken care of by the revenue sharing laws and other provisions of this Bill, like the Host Community Fund”.

    The lawmaker also stated that since gas is still under-focused in Nigeria and its potential as a source of energy untapped, the PIB seeks to maximize the benefits of the nation’s gas resources.

    He added that the PIB will also lead to the establishment of the Nigeria Oil and Gas Investment Pact Scheme (NOGIPS) which will ensure that components of the oil industry equipment can be manufactured locally.

    According to him, the envisaged law further makes provision for the protection of health, safety and the environment in petroleum operations.

    In his remarks, the Senate President, Dr. Bukola Saraki described the exercise as the first segment in the passage of the bill.

    The Senate, he assured, would ensure the opening up of the petroleum sector, and by extension, the economy of the country on a tripod of transparency, efficiency and profitability for both the government and players in the field.

     

  • Reps move against gas flaring 

    Reps move against gas flaring 

    The House of Representatives has initiated a move on the need to stop gas glaring in the country by 2020.

    The lawmakers said the move became necessary due to the health and economic implementations on the country as well as the refusal of international oil companies (IOC) operating in the Niger Delta region to comply with regulations on flaring.

    As a consequence, while calling on the Federal government and IOCs to stop the flaring, the House has mandated its Committees on Gas Resources and Petroleum Resources (Upstream and Downstream) to interface with the Ministry of Petroleum Resources and the Department of Petroleum Resources (DPR) on government policies and regulatory rules towards actualizing the exit date of 2020 for gas flaring in Nigeria.

    The decision of the House followed the adoption of a motion by Ehiozuwa  Agbonayinma  (PDP, Edo), who noted that data obtained from the World Bank showed that Nigeria ranks second among countries that are the largest gas flaring nations in the world, as the country emits over four(4) billion dollars’ worth of gas annually.

    He said: “The Nigerian Extractive Industry Transparency Initiative (NEITI), in its 2014 Nigerian Oil and Gas report disclosed that in 2008, the Federal Government, in its fiscal regime for the petroleum sector, set a penalty of $3.5 per 1000 SCF of gas flared by oil companies, observing, however that the companies have refused to comply with the directive.

    “We are all aware that gas flaring results in the release of methane which is accompanied by other greenhouse gases that account for about 50 percent of all industrial emissions in the country and 30 percent of the total C02 emissions which are harmful to humans, the economy and the environment.

    “Regrettably, the failure of the Government to enforce the laws against gas flaring has exposed humans to various respiratory disorders, harmed the environment and cost the country over N3 trillion in revenues over a five year period.

    “It should also be noted that as much as conversion of gas that is currently flared is not just about penalties, there is need to provide a conducive legal and regulatory environment, and also the infrastructure to take the gas harnessed to end users which is obtainable in other climes where 90 percent of associated gas is used or re-injected into the ground, rather than flared.

    “We should take cognizance of the figure from DPR that gas flared in 2015 alone was capable of generating about 3,500 MW of electricity or an equivalent of three trains of Liquefied Natural Gas (LNG), representing a loss of over $1bn  revenue or over 60 million barrels of oil equivalent.

    “We should be concerned that lack of political will on the part of the Government to enforce the laws on gas flaring is capable of thwarting Governments projected exit date of 2020 to end gas flaring, and given that the year is almost at hand, there may be need for increased fines and penalties to achieve the exit date.

    “However, doubts have been expressed by industry players that Government officials are not taking aggressive steps that are required to actualize the 2020 exit date”.

    Following the adoption of the motion, the Committee was given eight weeks to carry out the assignment and report back for further legislative action.

     

  • Nigeria lost $850m to gas flaring in 2015 – DPR

    Nigeria lost $850m to gas flaring in 2015 – DPR

    The Department of Petroleum Resources (DPR)  said that Nigeria, the ninth largest gas producing nation in the world, lost over 850 million dollars to gas flaring in 2015.

    Mrs Pat Maseli, Deputy Director, Head, Upstream, DPR, gave the statistics at the just concluded 10th Annual Sub-Saharan Africa Oil and Gas Conference in Houston, Texas, U.S.

    This is according to a statement made available to the News Agency of Nigeria (NAN), in Lagos on Sunday by Mr Sonny Oputa, Chairman, Energy Corporate African, the organiser of the conference.

    Maseli said that the development led to a loss of 3,500 megawatts of electricity generation and about 400 million dollars carbon credit value emission.

    She said, “55 million Barrels of Oil Equivalent (BOE) was lost and 25 million tons of carbon dioxide emitted.

    “The country is recording decline, but the scale of gas flaring is still worrisome’’.

    She said that with almost 8 billion cubic meters of gas flared annually, according to satellite data, Nigeria had the seventh largest gas flaring in the world.

    “At the same time, approximately 75 million Nigerians lack access to electricity.

    “In recent years, Nigeria has shown significant progress by reducing gas flaring by about 2 billion cubic metres from 2012 to 2015,’’ she was quoted as saying.

    Maseli said that prior to now, there were no gas terms in place, but the department had recently developed policies on gas terms and utilisation.

    “This was passed to operators for their input which will subsequently be sent to the National Assembly for its passage

    “The Gas Master Plan seeks to deliver gas to commercial sub sector for use as fuel, captive power and related end-use, to consolidate Nigeria’s position and market share in high value export markets.

    “It will create regional hub for gas-based industries, including fertiliser, petrochemical and methanol.

    “ It will also transform the gas sector to a value-adding sector,’’ Maseli said.

    On the breakdown of the 2008-2013 Domestic Gas Supply Obligation (DGSO), she said that  compliance was about 23 per cent.

    It said that in 2016, the DGSO was achieved at 38.18 per cent, while in 2017, it was 40 per cent.

  • U.S. based businessman to set up $2bn dollar modular refinery in Edo

    U.S. based businessman to set up $2bn dollar modular refinery in Edo

    U.S.-based businessman, Mr Charles Ihaza, says he has acquired about 453.9 hectares of land to establish a modular refinery in Eghudu, Ovia North East Local Government Area of Edo.

    Ihaza said this at an Open Forum organised on Environmental Impact Assessment (EIA) of the proposed refinery in Benin.

    He said that the project would cost over two billion U.S. dollars, adding that the refinery would produce about 80,000 barrels of refined petroleum products daily.

    “I know what it takes to establish and manage a refinery, and we are already discussing with the relevant Federal Government agencies on the immediate commencement of the project.

    “I decided to site the refinery in Eghudu so as to help our people back home in Nigeria, and I am very passionate about this project.

    “As part of our social corporate responsibilities to the host community, we are going to construct roads, build satellite clinics, standard primary and secondary schools and a functional international market,’’ he said.

    Ihaza, therefore, solicited the cooperation of the members of the community, urging them to work with the site engineers and other workers toward the successful execution of the project.

    Earlier, Mr Larry Edosomwan, who presented the EIA Report on behalf of the consultants, Vokosen Ltd., said that the report had captured all the socio-economic needs of the host community.

    “We have looked at the positive social and economic needs of the community, the aquatic environment, drainage and sewage management and treatment of effluents.

    “Forests will not be destroyed and wherever it happens, we will plant new trees.

    “We have ensured that we met all the requirements of the Federal Ministry of Environment and the Department of Petroleum Resources (DPR). We will mitigate all negative environmental impacts,’’ he said.

    Mr Joshua Taiwo, spokesman for the Minister of Environment, Alhaji Ibrahim Jubril, said that he was particularly happy that the project was named after the community.

    Taiwo said that the refinery project would provide jobs for the people and improve the socio-economic lives of the residents of the area.

  • Reps investigates DPR over oil block licenses, signature bonuses

    Reps investigates DPR over oil block licenses, signature bonuses

    …To investigate FMBN over non-remittance of N5.6b tax

    The House of Representatives began its investigation on leakages within the Department of Petroleum Resources (DPR) with a warning against attempts to derail it by affected organizations.

    This followed the disclosure of an ad hoc mandated to investigate the agency that DPR has failed respond to its queries.

    The panel was mandated to investigate and ascertain the ownership, distribution and authenticity of Oil Mining License (OML), Oil Prospecting Licenses (OPL), relinquishment, signature bonuses and bidding process.

    The Committee said it will not hesitate to invoke relevant laws to compel compliance by recalcitrant public and private entities because of time constraint.

    Chairman of the Committee, Agom Jerigbe (PDP, Cross River) at the inaugural meeting of the panel said queries were sent to a list of affected government agencies and oil companies but the DPR has refused to respond.

    “Some of them have responded, some asked for time to make available their presentations but DPR did not respond. This is a surprise to us because this attitude is least expected of a government agency.

    “We don’t have all the in the time in the world considering the fact the economy is under some constraints right now, as such all hands must be on deck to put it back on the right track for the betterment of every citizen of this country,” he said

    Similarly Committees on Finance, Housing and Urban Development and Regional Planning have been mandated to investigate alleged non-remittance of N5.6b tax by the Federal Mortgage Bank of Nigeria (FMBN) to the Federal government.

    Sponsor of the motion, Nicholas Ossai (PDP Delta) said between 2011 and 2015, the Bank generated a total revenue of N44.073b with N13.17b  of it having been generated in 2015 but the Bank defaulted in the remittance of the Value Added Tax (VAT) collections of N2.2b  to the Federal Inland Revenue Service (FIRS).

    He also observed that the Bank also defaulted in remittance of Withholding Tax deductions to FIRS amounting to N3.4b during the same period.

    “Due to poor management by successive managements of the Bank, there had been unimaginable high volume of non-performance of 70 percent of the Bank’s risk assets and loans, thus resulting in sharp erosion of its Capital Structure and the National Housing Fund deposits.

    “The mismanagement of the Bank has led to huge administrative expenditure to the extent that its annual average of staff maintenance is N4b, while Directors fees and expenses are on the average of N200m annually

    “However, Section 40 of the FIRS Act specifies a penalty of 10 percent on withheld or unremitted tax by any defaulter after 30 days from the date of default,” he said.

    The motion was unanimously adopted after it was put to a voice vote.

  • Reps summon oil company’s chief over diversion of $9.1 forex

    The Managing Director of Total Nigeria Plc has been invited by the House of Representatives to explain the position of the company over alleged  diversion of $9.1m Foreign Exchange (forex).

    Total was alleged to have collected as part of the Federal government special intervention fund through the Central Bank of Nigeria (CBN) for the importation of Premium Motor Spirit (PMS) for avoidance of scarcity of the product in the country.

    This emerged Thursday at the continuation of a public hearing by the Nnana Igbokwe – led ad hoc committee on the review of petrol pump price.

    The committee expressed concern over the discrepancies in the presentation and documents of the oil company that were at variance with those presented by the Department of Petroleum Resources (DPR), Nigeria Ports Authority (NPA) among others.

    Total’s N2.1b indebtedness to Pipeline and Product Marketing Company  (PPMC) also became a subject of controversy as the 14 days credit sales agreement that does not give them room to default in payment appear to have been jettisoned.

    “Forex collected by you was on the 22nd June, 2016, but I want to draw your attention to products consummed by you before collecting forex to pay”.

    “How come you are owing this huge sum when you are to pay for any product received from PPMC on or before 14 days.

    “It is even more worrisome that the document before us shows that the N2.1b reflects that the indebtedness I arising only from Dual Purpose Kerosene (DPK).

    “So we stand by the decision that the transaction you are doing with PPMC is opaque, your through-put documents are not included here; neither is your credit sales.

    “The entire process of your acclaimed reconciliation with PPMC is fraught with irregularities”, Igbokwe said.

    Total’s representative, Funmi Ogunmade, in his response said dispute with the DPR over certain transactions with PPMC had made reconciliation of records difficult.

    “I will crave your indulgence to step down the decision as taken by your committee due to the irreconcilable differences between us and PPMC”, Ogunmade said.

  • Reps summon Total over missing fuel

    Reps summon Total over missing fuel

    The House of Representatives has invited the Managing Director (MD) of Total Nigeria PLC to appear before it over a missing 35,000 metric tons of Premium Motor Spirit (PMS).

    The missing petroleum product was discovered Wednesday at the on-going investigation hearing by the ad hoc Committee on the Review of Pump Price of PMS.

    Documents tendered by the Department of Petroleum Resources (DPR), Petroleum Pricing Marketing Company (PPMC) and others exposed the missing product.

    Committee Chairman, Nnana Igbokwe said the Committee could not trace about 35,000 metric tons of the PMS under the custody of Sea Clippers Shipping Company hired by Total to carry the products.

    “The documents we have before us which were submitted by you (TOTAL) and DPR shows that 35,000 metric tons of Nigeria people’s PMS is missing, where did Nigeria National Petroleum Corporation (NNPC) ask you to deliver the product”, Igbokwe questioned.

    In his explanation, Total’s representative, Olalere Babasola pleaded for time, claiming that he was in possessuon of document to back his response to the committee’s claim.

    “I am quite convinced that we discharged the PMS because it is the NNPC that authorizes where to discharge products,” he said.

    The Committee was not impressed by Babasola’s submission, “In view of the fact that Total cannot give the committee the whereabouts of the 35,000metric tons, the MD of TOTAL is hereby summoned to appear before the committee,” Igbokwe said.

    He also expressed concern over 35 queries issued to Total, on its failure to adhere to rules of engagement on  lifting of products.

    As a result, the oil company was mandated to make available, statement of fact, electronic receipts and clearance certificate for all products lifted and discharged, in addtion to documents on its  indebtedness to the Federal government.

    The Nigerian Ports Authority (NPA) was also condemned for delay of products and cargos in sea ports leading to accumulation of demurrage that  was indirectly built into subsidy of the products by independent marketers.

    The Committee regretted the burden is ultimately transferred to Nigerians as they buy the product.

     

  • Gunmen kill four members of Abia vigilante

    Gunmen kill four members of Abia vigilante

    A four man gunmen suspected to be members of a notorious armed robbery gang terrorizing visitors and residents of Aba, the commercial hub of Abia State has reportedly killed personnel of the Abia State Vigilante Service (AVS), otherwise known as Bakassi boys.

    It was gathered that while three of the AVS personnel died on the spot, another member of the security outfit died on the way to the hospital.

    Unconfirmed reports have it that other personnel of the State Vigilante service and some passersby that sustained gunshot are receiving medical attention in undisclosed private hospital.

    Another report has it that the vigilante group had foiled a kidnap attempt of an Aba based business woman at Popular Tonimas junction by the gunmen, not knowing that the gunmen later trailed them.

    It was gathered that the gunmen on sighting the AVS team near the Department of Petroleum Resources (DPR) office along Aba-Owerri expressway road while they were on a routine patrol, opened gunshot on them, killing three on the spot.

    It was gathered that the incident which happened on Monday evening caused pandemonium around the area, forcing many shop owners to hurriedly close their shops while motorists and other road users abandoned the ever busy expressway which serves as a major entrance
    and exit route from the commercial city for alternative ones to avoid police arrest and gridlock that was already building on the road.

    A source from one of the security agencies in the state who pleaded anonymity confirmed that four members of the AVS died as a result of the shootout, but couldn’t confirm if there were others admitted in any hospital in Aba.

    The source who said that the hoodlums used a Sports Utility Vehicle (SUV) to carry out the act, added that police and other sister agencies shortly after the incident, blocked possible exit routes of the hoodlums.

    According to the source, “We (security agencies) are on their trail and will soon get to them. We are closing up on them. We want to use this opportunity to appeal to Aba residents to report to the police and other security agencies in the state about any suspicious movement
    of persons in their areas.”

    Recall that the state government had at the weekend imposed a 6am to 7pm ban on the operational hours of commercial motor and tricycle operators in the state as part of measures to curb the activities of hoodlums and gunmen in the city of Aba and other parts of the state.

  • DPR warns marketers against hoarding of petrol

    DPR warns marketers against hoarding of petrol

    The Department of Petroleum Resources (DPR) in Kwara has warned marketers against fuel hoarding without inexplicable reason.

    The state Operations Controller of the DPR, Mr Salvation Philip, made this known on Wednesday in Ilorin during a surveillance conducted by the department on the emerging fuel scarcity in Ilorin.

    He said that the department had begun to clampdown on filling stations in Kwara for allegedly involving in fuel hoarding.

    Philip said that no station would be spared in the ongoing operation.

    He said the agency was not out to punish any marketer who conducted his business within the ambit of the law and warned that any infraction would attract appropriate sanction.

    The DPR boss stated that there was no reason for any dealer to hoard fuel when relevant authorities insisted that there were no plans to jerk up the pump price of petrol.

    The DPR has the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines in the Oil and Gas Industry in Nigeria.

  • Reps seek revocation of oil bloc licenses 

    Reps seek revocation of oil bloc licenses 

    The House of Representatives would seek revocation of oil bloc licenses issued without due process, it emerged Tuesday.

    This is in addition to the forfeiture of oil and gas licences by companies that have variously defaulted in the payment of requisite fees to the Federal government.

    This followed the discovery of some oil and gas companies operating in deviance of the law Tuesday at the on-going investigative public hearing into the status of several Oil Prospecting Licences (OPL) and Oil Mining Leases (OML) and marginal oil fields.

    The Committee, chaired by Gideon Gwani (PDP, Kaduna) expressed disappointment at the response of some oil gas companies that failed to present presidential approvals for their  licenses.

    The Department of Petroleum Resources (DPR) also compounded the issue by informing the Committee that it has no records in its system of Presidential approvals for some of the licences that were granted through discretionary powers of the Petroleum Resources Minister.

    The Committee made its declaration after Oriental energy and Platform Petroleum failed to provide satisfactory responses to issues of licence approval and payment of royalty to the Federal government.

    While Oriental Energy failed to prove the authenticity of its field license, Platform Petroleum said it defaulted in royalty payment for the entirety of 2016.

    In response to the Committee’s query, DPR said it does not have the Presidential approval for Oriental Energy’s license in its system.

    The DPR also failed to provide satisfactory response to Platform Petroleum’s royalty payment default.

    As a result, the Committee said the ownership of all the affected companies must be produced by the Corporate Affairs Commission ( CAC ).

    It also declared that it will recommend for the revocation of licences of all oil companies found culpable of defaulting in payment of oil fees to the government.

    Committee Chairman Gwani said it was the duty of the Committee to unearth procedural inefficiencies in the award of the licenses, adding that presentation of documentary evidence for the discretionary awards is critical to the investigation.

    He said: “Those who failed due process and whose licences to operate came through processes other than those prescribed by the law, we will recommend that such license be revoked, relinquished and thrown back into the basket for Nigerians to bid for properly.

    “In the course of this investigation, we found out, even today (yesterday) that a company refused to pay royalty for the whole of 2016.

    “This is a fee that is supposed to the paid monthly.

    “As such, it is important that DPR begins to enforce the Act since it is clear that any company that failed to do business in accordance with the Act, not paying the requisite fees, as and when due, that company’s licences be relinquished and the bloc taken away.

    “We are looking at the process by which these licences were acquired because we found out that the process might have been abused.

    “It could be that someone in government was doing business with the issuance of these licenses to themselves and their cronies by manipulating Presidential assent.

    “We found out that languages that were not presidential were used in some of these letters of award.

    “That has given the Committee an idea of how things were manipulated and that is why we want to take it further by finding out the owners of these companies from the Corporate Affairs Commission ( CAC ).

    “This Committee is detemined to expose any oil company that did not get its license right and we will recommend it for revocation.

    “Revocation of such licences would even be good for the country as it will provide the opportunity for our Niger Delta oil and gas investors to partake in the new bidding process.

    “Personally, my believe is that if we have more Niger Delta investors in the sector, then agitation and vandalization of oil asset would be reduced knowing that they have a greater stake in the sector”.