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Tag: NNPC

  • NNPC, FIRST recruits five for FPSO training

    The Nigerian National Petroleum Corporation (NNPC) and its joint venture (JV) partner, FIRST E&P, have recruited five indigenes of Bayelsa State as trainees for its Floating Production Storage and Offloading (FPSO) unit, which is expected to start operations soon.

    It said the recruitment is part of its commitment to enhance economic livelihood through skill acquisition in host communities in the state.

    The FPSO was leased by the JV from Yinson for deployment on the Anyala and Madu fields within Oil Mining Leases 83 & 85, offshore Nigeria. Yinson will also be responsible for providing the operations and maintenance of the FPSO.

    The five indigenes were recruited through the Corporate Social Performance initiative of FIRST E&P, which represents about 42 per cent of the persons recruited as trainees in the first batch of the programme.

    The trainees will be taken to Singapore, where they will be exposed over the next few months to both classroom teaching and practical shipyard work and FPSO systems training.

    They will in the process earn several international certificates in the Oil & Gas and Maritime industry. The training will be carried out in partnership with Keppel Shipyard in Singapore, which has over a 100 years’ experience.

  • NNPC to resolve fiscal issues with JV partners

    To attract fresh investments into the petroleum industry and encourage exploration for new oil finds to grow the oil and gas industry, the Nigerian National Petroleum Corporation (NNPC) is planning to resolve the lingering fiscal issues hindering the growth of the industry.

    Its Group Managing Director, Mallam Mele Kyari, stated this while fielding questions from reporters at the just-concluded conference of the Society of Petroleum Engineers (SPE), Nigeria Council held in Lagos.

    Kyari said the corporation will engage its joint venture (JV) partners and the government to resolve the knotty issues.

    He noted that NNPC will  fully embrace technology to drive its operations considering the direction of the industry. He said: “Today, Artificial Intelligence is leading digital transformation across the oil and gas industry, from exploration to production and facility management. And many oil companies have taken advantage of this to enhance operations’reliability and profitability.

    “Technology and innovation will, therefore, continue to shape the way we do our businesses, especially in the deep offshore and other hard to operate environments.Artificial Intelligence, Big Data and Mobile Technology will continue to shape our industry in practically unimaginable ways, but certainly the transformations it promises will lead to quantum shift in the delivery of our task.”

    For the NNPC, Kyari said: “We are getting to the point of using technology to address challenges and advance growth of the oil industry but there is significant room for improvement. Certainly, we have done so much in the industry to believe that we have got to a level that doesn’t need other proportions.”

    On developing the oil and gas industry appropriately, the NNPC chief said: “There are fiscal issues that we need to resolve and we are engaging our partners and government so much to make sure those fiscal issues are resolved so that at the end of the day, people will have the basis of investment clear to them.

    “We will also engage our partners to make sure that the assets that need to be divested are done as quickly as possible so that we can reduce some of the challenges that had inhibited investment in this industry.The combination of these two will take us there.”

    On whether the government will sell the refineries to private sector investors to make them efficient, Kyari said government will not sell the refineries but assured that NNPC will make the refineries operate at reasonable capacity. “First, we have to rehabilitate our refineries and make they operate at minimum of 90 per cent capacities. Secondly, we (NNPC) will make sure others that have such initiatives to put in place new refineries are supported by way of either providing them feedstock or all the necessary support to make sure such refineries come on stream and also make sure when they produce we take these products from them.”

    On the financing option the corporation will choose to carry out the refineries’ rehabilitation, he said: “We can do equity or third party financing and other options,” adding that the NNPC is to also resolve fiscal issues around investment environment and make sure its priorities are clear and it will plan with its JV partners, so they can get back to exploration.

    Kyari said taking steps to grow reserve, expand the frontiers of our production as a country requires enabling environment to attract the investment that is being subdued by our fiscal regimes but noted that the corporation is optimistic that this government under the leadership of President Muhammadu Buhari is determined to deliver a stable fiscal environment to support the needed growth in the oil and gas sector.

    “The oil and gas industry is dynamic and must remain so in order to survive frequent disruptions associated with changing economic, social, political environments,” he added.

  • NNPC spends N15.5b on pipelines maintenance

    The Nigeria National Petroleum Corporation (NNPC) spent over N15 billion in November, last year to maintain pipelines in the country, The Nation has learnt.

    According to Federation Account Allocation Committee (FAAC) report submitted by NNPC, under appendix N, the oil firm said it spent N1,556,985,671.03 on security and maintenance of pipelines; N154,293,264.32 on pipeline and other facility repairs,  N8,746,257,727.19 was spent on marine distribution, N3,353,698,696.33 on pipeline management and another N1,724,039,089.22 on “strategic holding”.

    In 2018, the country witnessed some pipeline distruptions, which were reported at the monthly FAAC meetings. A source that was at the meeting told The Nation that the announcement by NNPC generated some questions from the state governments, who expressed concerns that the country was spending too much to maintain and repair pipelines on monthly basis, “especially at a time when such monies could be used for people oriented projects.”

    The state governments were particularly worried that the cost of these repairs and maintenance were being deducted from revenue that ordinarily should have accrued to the Federation Account.

    Read Also: NNPC explains increase in price of Kerosene

    The report identified some of the “issues that affected production in the month of October, 2018 (which in turn necessitated the need for the repair and maintenance of the pipelines). Nine terminals were identified and out of them, Bonny Terminal suffered a loss of 710,000 Barrels of crude; Forcados suffered a loss of 1,085,000; Agbami 157,000 barrels lost; Akpo terminal, lost 162,000 barrels; Brass 360,000; Qua Ibo terminal, 165,000barrels; Oyo (not the state) 155,000 barrels; Tulja 682,000 and Erha terminal lost 10,000 barrels.

    All these losses amounted to 3,607,000 barrels lost. Using 2018 figures, that will be around $183,957,000 or N56,106,885,000 lost in one month.

    Specifically, the FAAC report stated that the federation suffered crude oil pipeline losses of N88,422,130.82 basically from the pipeline segment of CNL- WRPC where 700,344 barrels were pumped, but only 695,535 barrels was received.

    Concerning products pipeline losses, the report also said the pipeline at A/Cove-Mosimi and A/Cove-Idimu- Satellite from where 192,590 cubic metre of Premium Motor Spirit (PMS) was pumped but only 170,482 cubic metre of PMS was received resulting in a loss of 22,108 cubic metres  or N2,946,554,240. Another loss of N1,366,919,680 was recorded from the Mosimi-Ibadan pipeline while the Port Harcourt- Aba pipeline suffered a loss of N58,201,777, all amounting to N4,371,675,696.64 loss to the federation account.

  • NNPC not competing with Dangote Refinery

    State-run oil firm, the Nigerian National Petroleum Corporration (NNPC), yesterday said it ws not willing to compete with Dangote Refinery over market share.

    Its Group Managing Director, Mallam Mele Kyari, said rather than compete, the Corporation will continue to provide support to the promoters of the project to boost domestic refining capacity.

    Receiving the President and Chief Executive Officer of the Dangote Group, Alhaji Aliko Dangote, at the NNPC Towers, Abuja, Kyari said as the chief enabler of the economy, the NNPC has a duty to rally industry players such as Dangote Group to achieve the elusive target of making the country a net exporter of petroleum products.

    According to a statement, the NNPC GMD assured that the same level of support would be provided to other promoters of refineries, adding that the ultimate goal was to enhance domestic refining to the point of self-sufficiency and ultimately for export.

    Earlier in his presentation, Alhaji Dangote said the business approach of the Dangote Refinery was to see NNPC as a collaborator rather than a competitor. He said the refinery would rely heavily on the Corporation’s invaluable knowledge of the refining business in the country to achieve its central objective.

    Dangote aligned his company with the Federal Government’s aspiration to ensure adequate in-country refining capacity, stating that on completion the refinery would dedicate 53 per cent of its projected 650,000 barrels per day (bp) refining capacity to the production of petrol.

    “The most important thing for us is to see how we can partner with NNPC, it is not to see how we can compete with NNPC. We would like NNPC to be part of us and we also want to be part of NNPC.  I think that is the only way we can achieve a win-win situation,” he said.

  • NNPC secures $3.15b financing for OML 13

    THROUGH its subsidiary Nigerian Petroleum Development Company (NPDC), the National Petroleum Corporation (NNPC) yesterday signed a $3.15bn financing and technical services agreement with Sterling Oil Exploration and Energy Production Company Limited (SEEPCO).

    It is for the development of Oil Mining Lease (OML) 13. The NNPC has a plan to increase the nation’s crude oil reserves by raising daily oil production to three million barrels per day.

    OML 13, located in the eastern axis of Niger Delta, is 100 per cent owned by the NPDC. It covers a total area of 1987 square kilometre.

    NNPC’s Group General Manager, Group Public Affairs Division, Ndu Ughamadu, quoted the Group Managing Director, Mallam Mele Kyari, as describing the funding arrangement as “a game changer to oil and gas project financing in Nigeria”.

    Read also: Agenda for NNPC new chief Kyari

    The GMD, who was represented by the Chief Operating Officer, Upstream, Mr. Roland Ewubare, expressed gratitude to President Muhammadu Buhari, for approving the transaction, adding that OML 13 held strong potentials both for the petroleum industry and the nation’s economy.

    According to statement by Ughamadu, the GMD disclosed that the Federal Government is expected to earn over $10.2 billion in royalties and taxes from the project over the next 15 years, while NNPC would earn over $5 billion after payment of the entire financing obligation.

    He advised the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations.

    Kyari disclosed that the acreage boasts of over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves, adding that the Financing and Technical Services Agreement was for a period of 15 years while the $3.15 billion ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.

    First oil of about 7,900bpd is expected from the project by April 1, next year, while production is expected to peak at 94,000bpd and 542mmscfd within four years.

    On local content, the project is expected to enhance participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.

    Also speaking, SEEPCO’s Chairman, Mr. Tony Chukwueke, expressed delight at the opportunity offered his company to support the production and reserves growth aspiration of the Federal Government.

  • PDP cautions on fuel price hike

    The Peoples Democratic Party (PDP) has cautioned federal government and the governing All Progressives Congress (APC) against increasing pump price of fuel from the existing N145 per litre.

    The party said its position is predicated on its unwavering commitment to the welfare of Nigerians, stressing that any increase in fuel price will result in upsurge in cost of goods and services thereby worsening the biting hardship being faced by Nigerians.

    A statement Thursday by the spokesman for the PDP, Kola Ologbondiyan, at a time like this, rather than musing an increase in the price of such essential commodity, a responsive leadership ought to be engaging stakeholders and seeking ways to achieve a reduction in the interest of the people.

    The statement said, “Our party insists that the price comparison being contemplated by the APC-controlled Nigeria National Petroleum Corporation (NNPC) to warrant an increase, is untenable and further demonstrates that the APC is a party of selfish, unfeeling and insensitive individuals, who relish in inflicting pain and anguish on Nigerians for their selfish desires.

    Read also: NNPC dispels rumour of imminent petrol scarcity

    “Moreover, in arguing that petrol price is cheap in Nigeria without also comparing our market and production variables as well as social and economic infrastructure, with those obtainable in other countries, the APC-controlled NNPC is trying to play on the intelligence of Nigerians to pave way for further fleecing of our citizens.

    “Such anti-people position can only come from leaders who do not have the mandate of the people and as such think that they are not answerable or accountable to the citizenry

    “This is the same APC, which, in 2015, promised to reduce fuel pump price, only for it to jerk it up from N87 per liter, stabilized by the PDP, to an exorbitant N145, from which it now seeks a further increase.

    “Moreover, the APC-led Federal Government has no justification whatsoever to contemplate any increase in pump price of fuel, when President Muhammadu Buhari has failed to recover the N9 trillion ($25 billion) oil money stolen under his watch, through sleazy contracts, as detailed in the leaked NNPC memo.

    “President Buhari had also failed to recover the N1.1 trillion worth of crude oil allegedly stolen, using 18 unregistered companies, reportedly linked to APC interests.

    “It is therefore unacceptable that rather than recovering the over N10 trillion stolen oil money and channeling same to our domestic energy needs, the APC-led Federal Government is seeking to shift the burden of the humongous corruption in the NNPC, as confirmed by the new Group Managing Director, Mele Kyari, on our already deprived and impoverished compatriots.

    “It is saddening that at a time Nigerians should have been enjoying the benefits of Atiku Abubakar’s economic recovery plan, they are still being faced with apprehensions of more economic hardship under the hypocritical and unfeeling APC”.

     

  • Four refineries to work by 2023, says NNPC boss

    With a promise to reactivate all four refineries before the expiration of President Muhammadu Buhari’s administration in 2023, Mele Kyari yesterday took the baton from Dr. Makanti Baru as the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC).

    He also pledged his readiness to work towards the delivery of the Dangote Refinery by the first quarter of next year.

    Kyari plans to ensure that Nigeria achieves its production target of three million barrel per day and also grow its reserve to 40 million barrels.

    The four refineries – Port Harcourt Refinery & Petrochemical (1 & 2); Warri Refinery & Petrochemical and Kaduna Refinery & Petrochemical – have installed capacity to produce 445,000 barrels per day. They have been on and off for technical reasons.

    The NNPC chief said: “It is the intention of NNPC to support the industry to make sure we achieve production level of three million barrels per day and grow our reserves to at least 40 million barrels. We will achieve this and it is possible. I have already set the time for it. We will do it before 2023.”

    Kyari spoke at the amphitheater of the NNPC in Abuja, where Baru handed over to him.

    His words: “There is a legitimate expectation from Nigerians that why can we be oil producing country with four refineries and yet importing sometimes 100% of our requirement.

    “I will follow it up to make sure that before the life of this administration expires, before Baba’s (President Muhammadu) tenure ends in 2023, we will deliver on the four refineries.”

    The NNPC, under Kyari, will encourage private sector participation in revamping the refineries.

    “We support the Dangote Refinery to make sure they come on stream within the shortest time. I cannot say for them but the last information we had was that they will come on stream the first quarter of 2020. We will support them with everything possible to make sure it comes on stream,” the new chief said.

    Kyari said that with the modular refineries coming on board, Nigeria would become a net exporter of petroleum products at the expiration of President Buhari’s tenure.

    According to him, products can now be bought without going to NNPC but what is left is taking it from the gate into the tank. “At the end of the day, you will sit on your bed, buy petroleum product and deliver it to your filling station,” Kyari said.

    He spoke of fighting corruption, saying: “There will be no corruption where there is no discretion. We are going to work with the EFCC to take out corruption from our system. Leadership is about trust, I also know that there is eternal accountability we respond to. We will not make deliberate mistakes.”

    Read also: Issues before NNPC boss Kyari

    Continuing, he said that he would do his job with integrity without allowing his personal interest to betray him.

    Kyari hinged his decision to be upright in the discharge of his duty on the fact that he would one day give account of his stewardship to God.

    His words: “I will stand before my creator and say I have done well.”

    According to him, the corporation will henceforth become accountable to the citizens.

    He said: “It is a promise that we are going to be accountable to the citizens. The citizens will have access to what we are doing.”

    But putting a caveat, he said that unless on commercial value ground, “we will disclose every data. But we will discuss every data at the appointed time.”

    Warning his children, Kyari urged them not to accept any gift from anyone on his behalf.

    His words: “From today, if you accept gift from anyone, it is not for me; don’t give gift to members of my family. It is not for me.”

    Kyari said he never prayed for the job, stressing that the opportunity could only come from God. The NNPC boss said that there are other personnel with better grades and 40 PhD holders who are also qualified for the seat, but providence only saddled him with the responsibility.

    According to him, at a point in his service, his predecessor (Baru) was simply signing his requests without reading them because he had earned his trust.

    He has no illusion that the journey ahead would be easy.

    Baru, who became the 18th GMD of NNPC in 2016, told the Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, that the corporation’s records under his watch were clean.

    He said:  ”I look back with pride, recalling that kerosene was gold, diesel a nightmare; nobody talks about them now.”

    Baru urged his successor to ensure regular audits of his books, reminding him of the need to focus on oil and gas development, especially in the frontier basins, and opening up of new fields.

    He said: “The new GMD should rigorously focus on the growth of oil and gas production and reserve through aggressive exploration campaign in the traditional basins and frontier basins, opening up of deep offshore through negotiation of fiscal terms.

    “You should focus on passionately continuing empathic community and stakeholder engagement in the Niger Delta and other areas of operations; continuing cost reduction initiatives and contracting cycle reduction; completion of negotiations of the new PSC terms and Renew licenses early, if necessary thereafter.”

    He also advised Kyari on the implementation of the PSC Dispute Settlement Agreements and the Gas Terms.

    Baru advised Kyari to focus on exploration to grow reserves in the Niger Delta, Frontier Basins and Deep Offshore.

    He spoke also on the completion of the cash call repayment and cash call exit programme.

    The former GMD urged Kyari to see to complete the migration to IJV in all the unincorporated JVs.

    Other areas that Baru counselled his successor to focus on included:

    • completion of the financing arrangements for NPDC assets (OMLs 65, 111, 119, 66 and 64).
    • re-entering and developing OMLs 13 and 11 discretionarily awarded to NPDC.
    • targeting growth to 500kbopd within existing assets while looking for new opportunities to surpass the target.

    Baru reminded Kyari that NNPC’s mission statement was changed to reflect the vision of transforming it into an energy company, in line with the prevailing trend in the industry and its forays into renewables and power.

    Baru wore a navy blue suit and a long cap with NNPC red, white, yellow and green logo.

    Kyari was dressed in a blue agbada and a cap to match. Upon the handover of the corporation to him, Baru crowned him with the symbolic NNPC transition cap.

    The change of bation was witnessed by 10 former GMDs as Festus Marinho; Funso Kupoluko; Dr. Thomas John; Joseph Darwa; Abubakar Yalam and Chambalain Oyinbo and others.

    Also present were: Ekiti State Governor Kayode Fayemi, Magu; Nigerian Extractive Industries Transparency Initiative (NEITI), Executive Secretary Dr. Waziri Adio; “Daily Trust” Publisher  Kabiru Yusuf and his “Leadership” counterpart, Nda Isaiah, among others.

  • ‘We will reposition NNPC to global company of excellence’

    The newly appointed Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Mr Mele Kyari has pledged to reposition the corporation.

    Kyari said he would make the NNPC to be a  global company of excellence to portray the good image of the company.

    He made the pledge on Tuesday in Abuja when he paid a courtesy visit on the Secretary to the Government of the Federation (SGF)  Mr Boss Mustapha in his office.

    Accompanied by his predecessor, Mr Maikanti Baru, Kyari expressed gratitude to God for the reappointment of Mustapha as SGF.

    According to him, we are here on a courtesy visit to the SGF, and also for the outgoing GMD to formally hand me over to him.

    He said he would continue with the good works executed by his predecessor to take the company to the next level.

    Read also: Four refineries to work by 2023, says NNPC boss

    “We will reposition and we will make NNPC a  global company of excellence.

    “As part of the leadership of the company before now, there are good works that my predecessor has done during his tenure and we will continue from there, ” he said.

    The new NNPC boss also assured that the country’ s refineries would be revamped to ensure that incessant fuel scarcity was curtailed.

    “We will sustain and build on the progress we met on ground and also to ensure that we align completely with the vision of Mr President to ensure that there is peace in the Niger Delta region.

    “To also ensure that petroleum supply is sustained in such a way that Nigerians do not cry anymore over fuel issues in the country, ” he said.

    Mr Femi Gbajabiamila, Speaker of the House of Representatives, who was also on a courtesy visit to the SGF, emphasised on the need for harmonious relationship across all arms of governments to reposition the country.

    According to Gbajabiamila, my visit to SGF is to come and congratulate him on his reappointment, deliberate on issues affecting the government.

    He said: “We are going to have a good executive/ legislative working relationship in the next four years.

    ” So what we are trying to do here is to have a good working relationship in both arms of government

    “What we discussed today was basically issues that affect government, relationship between the two arms of government, areas were we need to block loopholes, areas were we need to develop, ” he said.

    This, he explained is all about good governance which would affect Nigerians positively.

    In his response, Mustapha assured them of good working relationship in order to have a stable government in the next four years.

    According to the SGF, in all the interactions I have had with the outgoing GMD of NNPC, the transition process in itself attest to the fact that we will have stability in the  NNPC industry.(NAN)

  • NNPC promises more support for good cause

    In line with its Corporate Social Responsibility (CSR) policy, the Nigerian National Petroleum Corporation (NNPC) has promised to continue its support for good causes across the country.

    The corporation said it would especially lend its support for children to become responsible citizens.

    NNPC’s Group Managing Director, Dr. Maikanti Baru, made the promised at the weekend during a visit to the Learning Centre of the North East Children’s Trust (NECT) in Maiduguri, the Borno State capital.

    He was accompanied by his successor, Mallam Mele Kolo Kyari.

    A statement by NNPC’s spokesman Ndu Ughamadu quoted Baru as saying the corporation thought it fit to support the project the moment it was approached by the trustees three years ago to lend a hand.

    “We undertook to support the project with everything related to modern education. These include equipping the laboratories, providing an e-library and a hybrid solar power supply system, vocational training equipment and even constructing e-library and block of classrooms,” Baru said.

    He said it was fulfilling for the NNPC management to physically inspect what the Corporation’s over N500 million support for the project had provided.

    “What I have seen today is even worth much more than that. There are more equipment that will be installed. We are happy with what we met on ground and it would spur us to do more,” Baru said.

    He hailed Vice-President Yemi Osinbajo for conceiving the project to provide an all-in-one home and school facility for children orphaned by the Boko Haram insurgency in order for them to become useful members of the society.

    The NNPC chief urged the Vice-President to extend the project to other cities affected by insurgency so that the over 40,000 orphans registered in Borno and other neighbouring states would also be accommodated.

    Read Also: Issues before NNPC boss Kyari

    Built in 2016, the NECT is an initiative of Vice-President Osinbajo and it is aimed at providing comprehensive support to the orphans in the Northeast.

    He thanked other donors for their gracious support for the construction of the edifice, even as he called on the corporate world to come out and offer more support towards the project.

    Earlier in his interaction with the children, Baru said all he saw in their young faces was hope and determination to become successful members of the society in the future.

    “If you work hard, you could grow and be like me in the future. It is my belief that each and every one of you here will be a future leader,” Baru told the students.

    The Head of Strategy for the NECT, Dupe Killa-Kafidipe, said the aim of the projects was to give hope to the vulnerable children affected by the insurgency in the North-East.

    She said the plan of the Vice President was to build 10 similar centres across the North East, stressing that NNPC and other corporate organisations were very crucial to that

    Killa-Kafidipe, who called on other organisations to emulate NNPC, said with the Corporation’s intervention at the centre, many of the students would be better educated than children who went to private schools.

    “The NNPC is doing a lot here and we appreciate their efforts to sustain this project,” she concluded.

    Other highlights of the visit include cultural displays and presentation of local caps and perfume made by the students as well as smoked fish (harvested from the school farm) to Baru and the GMD-designate Mele Kyari.

    Built in 2016, the NECT is an initiative of Vice-President Yemi Osinbajo and it is aimed at providing comprehensive support to the orphans in the North East of Nigeria.

  • Issues before NNPC boss Kyari

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Mele Kyari resumes today amid a myriad of challenges facing the nation’s oil and gas industry, reports Group Business Editor, SIMEON EBULU.

    Commentaries about the necessity to remove fuel subsidy, or retention of same, have been raging for years. At the turn of every budget year, lawmakers are surprised to learn that Nigeria had spent trillions of naira on subsidy payment to oil marketers.

    The sad narrative about Nigeria’s brand of subsidy management is that, huge as the amount regularly expended on subsidy payment is, there appears to be no proof that its intended benefits are realised.

    Subsidy represents the cost government incurs, or absorbs so that oil marketers can sell fuel products at a regulated price. This difference is usually paid to the marketers as subsidy,  a hedge against any loss to the dealers, be they independent, or major oil marketers.

    Fuel subsidy removal

    Those pushing for subsidy removal are wont to say that it has become a drain pipe on the government’s revenue, and a festering corruption syndrome enriching the pockets and bank accounts of the oil magnates. However, there are those who say that removing fuel subsidy will push fuel pump prices to the sky and consequently lead to a spiral increase in transportation cost and its concomitant multiplier effect on cost of foodstuffs. They said it will cause hardship and increase poverty across the land.

    The argument as to what becomes of Nigeria’s fuel subsidy has even gone beyond the shores of country. The global financial institution, the International Monetary Fund (IMF) has an opinion on how it thinks the issue should be addressed.

    IMF’s  outgoing Managing Director, Ms. Christine Lagarde, said with the low revenue mobilisation  in Nigeria in terms of tax-to-Gross Domestic Product, it was important for the country to remove fuel subsidies and move available funds into improving healthcare, education and other developmental projects.

    The IMF noted in its 2019 Article IV Consultation on Nigeria, that phasing out implicit fuel subsidies, while strengthening social safety nets to mitigate the impact on the most vulnerable, would help reduce the poverty gap and free up additional fiscal space in the country.

    Ms. Lagarde, who spoke in Washington DC, at the Spring Meetings of the IMF and the World Bank Group in the US in April, said: “We believe that removing fossil fuel subsidies is the right way to go,” pointing out that the global spend on fuel subsidy had risen to well over $5.2trillion

    On Nigeria, she had this to say: “I would add as a footnote, as far as Nigeria is concerned that with the low revenue mobilisation that exists in the country in terms of tax to GDP, Nigeria is amongst the lowest. A real effort has to be done in order to maintain a good public finance situation for the country and direct investment towards health, education, and infrastructure.”

    The push for a resolution of the fuel subsidy imbroglio is again finding its way to the front burner given that a new Group Managing Director (GMD), Mele Kyari, is billed to resume today at the Nigerian National Petroleum Corporation (NNPC) Towers, Abuja.

    Since his appointment about two weeks ago by President Muhammadu Buhari, Kyari has received appreciable positive reviews, with many saying he is fit  for the post. But as he takes over, many will expect that the subsidy matter will be uppermost in his mind.

    Although the government is not averse to removing fuel subsidy, its argument has been that subsidy cannot be pulled out in one fell swoop, but rather that it should undergo a phased withdrawal. The former Minister of Finance, Mrs. Zainab Ahmed, who spoke on the issue in Washington DC in response to Ms. Lagarde’s call for fuel subsidy removal, said:  “We are not in a situation where we will wake up one day and just remove subsidy. We have to educate the people and show Nigerians what the replacement for those subsidies will be,” adding that government would make the process of removing fuel subsidy gradual.

    As she put it: “The advice from the IMF on fuel subsidy removal was a good one, which will be implemented in a manner that is both successful and sustainable. We are not in a situation where we will wake up one day and just remove subsidy. We have to educate the people, we have to show Nigerians what the replacement for those subsidies will be.

    “So, we have a lot of work to do. We also need to understand that you don’t remove large amounts of subsidy in one go. It has to be gradual and the public has to be well informed on what you are trying to do.”

    Given Kyari’s background as a reformer, going forward, there is high expectation that addressing  fuel subsidy, would be one issue he will pay attention to as he settles down as the new NNPChelmsman. Many industry operators are of the view that the overall development and growth of the oil and  gas sector will have so much to do with how petroleum products, including gas, are priced, saying appropriate pricing of petrol, and gas have a role to play in determining the investment appetite of oil and gas operators.

    Beside the determination of appropriate pricing, industry operators are expectedly waiting to know Kyari’s positio on how to revamp, or diret investments into the gas infrastructure of the energy segment. Its been said that Nigeria has more gas reserves that crude oil. Infact, experts see Nigeria more as a gas prone country than crude oil.  According to the NNPC, Nigeria has an estimated petroleum reserves of 28.2 billion barrels of crude oil and 165 trillion standard cubic feet (scf) of gas (including 75.4 trillion scf of non-associated gas). Natural gas is the cleanest burning fossil fuel and is abundantly available in this country. Nigeria is known to have the largest reserves of gas in Africa and the ninth largest in the world.

    The petroleum industry, no doubt, is bedevilled with problems such as shortage of gas, low crude output, poor refineries’ output, inability of  the Federal Government, to speed up the process of signing the Petroleum Governance Industry Bill (PIGB) into law, disruption in fuel supply and its attendant effects on the economy.

    Others are slow pace of activities of modular refineries approved by the Federal Government, absence of good regulatory framework for operators, among others.

    Oil reserves

    Stakeholders said the time had come for Kyari to bring his wealth of experience to bear on the  industry, to improve the country’s oil reserves. Energy expert, Bank-Anthony Okoroafor, urged Kyari to work towards exceeding the country’s oil reserves put at about 40 billion barrels.

    He said the reserves had fluctuated over the years, with the result that the government’s earnings and implementation of critical projects are being affected.

    Okorafor said this scenario could  change if Kyari would direct his attention to growing the nation’s oil reserves.

    He advised Kyari to also focus on increasing the daily oil production to four million barrels per day. He said the two million barrels per day production was inadequate,  saying development was not good enough for Nigeria aspires to be one of the largest producer of crude oil.

    According to him, this is the right time for the government to improve its production by increasing daily crude production to 2.5 million barrels.

    Gas shortage

    The Chief Executive, Century Power Generation Limited, Chukwueloka Umeh, said the perennial gas shortage in the country would come to end once the new GMD and other stakeholders could work together to provide infrastructure for the industry.

    He said Nigeria remains one of the largest producers of gas globally, with 187 trillion proven gas reserves and 600 trillion unproven gas reserves.

    The figure, Umeh said, is huge enough for the country to accelerate the growth of the power sector, which largely depends on gas to generate electricity.

    He advised NNPC to revive oil wells that are in comatose, to explore more gas for improved  economic activities.

    Umeh said: ” Once the government is able to compliment gas production with good infrastructural facilities, the issue of transporting gas to the turbines would be a thing of the past. This shows that the leadership of the NNPC can achieve two things with one strategy. The Corporation would be able to improve on gas exportation and power supply.

    Fuel supply

    This is a perennial problem that Kyari can proffer solutions to. The Executive Director, Depots and Petroleum Products Association of Nigeria (DAPPMAN), Femi Adewole, advised the NNPC to help improve fuel to marketers, irrespective of their leanings.

    He said NNPC should leverage  its capacity to supply fuel to members of DAPPMAN, Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Major Oil Marketers Association of Nigeria(MOMAN), stressing that by so doing, the country would not  experience fuel scarcity again.

    Oil Mining Lease(OML 118)

    Okoroafor advised the new GMD to work with the Ministry of Petroleum Resources (DPR) to accelerate the renewal of soon-to- expire licenses for oil blocks, adding that the GMD should help facilitate the creation of new concessions for the unallocated 53 deepwater blocks, since the last bid was 12 years ago.

    Passage of PFB, others

    He advised Kyari and his team to lobby Buhari to sign the Petroleum Industry Governance Bill (PIGB), Petroleum Industry Administrative Bill (PIAB), Petroleum Fiscal Bill (PFB) and the Petroleum Host and Impacted Community Development Bill (PHICDB), adding that the industry would be able to resolve issues relating to crises between oil operators among others, when those bills are passed and assented to by Buhari.