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Tag: NNPC

  • No increase in petrol price, says NNPC

    No increase in petrol price, says NNPC

    • Marketers get new forex window

    • There’s glut in market

    The Nigerian National Petroleum Corporation (NNPC) yesterday said there was no need for any increase the pump price of petrol from its present N145 per litre.

    Speaking with reporters in Abuja, its Group General Manager, Group Public Affairs Division, Garba Deen Muhammad, said there was already a robust arrangement to guarantee fuel supply for a long time.

    He categorically insisted that the Federal Government was no longer subsidising petrol.

    Asked to react to newspapers report that the N145 per litre was no longer sustainable, he said: “I have read the reports but the statement was made in the context of  technical and logistics issues.

    “The bottomline, regardless of what they (reports) are saying is that there is no plan whatsoever by government to increase fuel price above the N145 margin.

    “If there is going to be anything like that, the agency responsible for price review would definitely sensitise Nigerians and explain why (there will be need to do so). But as at this moment, there is no plan to do that and and there is no need to do that.”

    Stressing that the corporation has sufficient stock of product in its custody, he said the state-run oil firm has a procurement contracts for supply of product beyond the ember months.

    He said: “In addition to that, we have a long term procurement contracts with our suppliers .  So the usual reasons that would have led to increase in price at the moment have been well taken care of. We have contracts with our suppliers that is to last throughout the ember months.”

    He said the NNPC in the last two weeks opened a new window for marketers to import products to foreclose inability to access foreign exchange which has been the major complaint.

    He said supply has already outweighed demand for petrol in petrol stations.

    He said: “There have been complaints and their complaints have been addressed to their satisfaction. A new window has been opened for them and in fact, what is happening now is that we are waiting for them to deliver. A new window to make forex available for them has been opened and they are satisfied with it. We are waiting for them to deliver on their own promises.

  • Increase in fuel price will be an invitation to revolution – TUC

  • ‘Why NNPC is major importer of fuel’

    ‘Why NNPC is major importer of fuel’

    Why have marketers left the Nigerian National Petroleum Corporation (NNPC) to import the bulk of the fuel locally consumed?

    Marketers do not have access to foreign exchange (forex), the Chief Executive Officer, OVH Energy Marketing Limited (formerly Oando Marketing Limited), Yomi Awobokun, has said.

    Awobukun said OVH has the capacity to distribute two billion litres, which was the maximum the firm did when there were no supply issues.

    He noted that at the height of importation, the firm was importing on its own 1.2 billion litres through self-raised letters of credit, which was the reason Oando was owed substantial amount of subsidy when the government was paying subsidy reimbursement to marketers.

    He noted that as a result of the current economic realities caused by oil price slump and forex access challenges, marketers found it difficult to import. “The downstream has been going through significant challenges including the unavailability of forex, drop in crude price and as a result of the entire externalities the economy is going through; therefore the NNPC should live up to its responsibility of ensuring energy security,” he said.

    According to him, the government through the NNPC has the responsibility to ensure energy security and provide fuel for vehicle owners. “This is apt because NNPC has the responsibility to generate income from Nigeria’s assets. But as marketers, our primary role is to meet the needs of the stakeholders, either the shareholder or customer.

    “Therefore, we only import where the capacity to import exists. As a marketer, I need to provide product at my retail outlets and also make profit, but to import I need forex. Currently, I cannot generate forex to import. So, in the last one and half years because of what the country is going through, NNPC has played a bigger role in fuel importation. We (marketers) are importing, but only to augment what NNPC imports as against in the past when NNPC imports to augments us.

    “But the fact that NNPC imports more now is vital. It helps to significantly reduce what marketers are owed and ensures that there is fuel at the stations. Besides, it makes reconciliation of transactions between the corporation and marketers easier.

    Awobokun, who spoke in Lagos during an interaction with reporters to formerly unveil name change of Oando Marketing Limited to OVH Energy Marketing Limited said all the shareholders agreed that a name change will boost the capacity of the company. He said the new name reflects current shareholders of the company. The OVH represents Oando, Vitol and Helios. Vitol and Helios recently bought into the company. The deal was sealed on June 30 this year.

    He said although the corporate name has changed, the products of the firm are licensed to be marketed as Oando in order to sustain the Oando heritage and market share. “All the shareholders agreed that a name change will boost the capacity of the company, but to sustain the Oando heritage and entrepreneur, OVH is licensed to market its products as Oando. Our intention is grow our reach, stabilise prices and supplies and add value to our shareholders.

    “The major value of this partnership is that it enabled access to capital by Oando. The downstream has been going through significant challenges including the unavailability of forex, drop in crude price and as a result of the entire externalities the economy is going through. The future leaders of this industry are those that are able to access capital. So the best of the deal is that it puts Oando to access capital and ensure supply. The partnership puts us in good stead to dominate the market.”

  • Court stops NPDC, NNPC from terminating agreement with Jide Omokore’s Atlantic Energy

    Court stops NPDC, NNPC from terminating agreement with Jide Omokore’s Atlantic Energy

    A Federal High Court in Abuja has restrained the Nigerian Petroleum Development Company Limited NPDC) and Nigerian National Petroleum Corporation (NNPC) from taking any step in terminating agreement they have with Atlantic Energy Drilling Concepts Nigeria Limited, Atlantic Energy Brass Development Limited owned by businessman, Jide Omokore, in respect of the Oil Mining Leases (OMLs) 26,30, 44 and 42 (Forcados assets) and OMLs 60, 61, 62 and 63 Brass assets.

    NPDC had abruptly terminated the agreements entered with Atlantic Energy in respect of the Oil Mining Leases (OMLs) 26,30, 44 and 42 (Forcados assets) and OMLs 60, 61, 62 and 63 Brass assets) despite the fact that the disputes were still pending before the arbitral tribunal.

    Consequent upon this, the oil firms through their lawyers, Babatunde Fagbohunlu (SAN) and R. A. Lawal-Rabana SAN approached the court to challenge the arbitrary termination of the agreement without resorting to the contractual clause of arbitration in time of dispute as clearly stated in the contract.

    In a judgment delivered by Justice Nnamdi Dimgba, he upheld the arbitration agreement contained in Article 22 of the Strategic Alliance Agreements (SAAs) entered into by the parties in the suit in respect of the Oil Mining Leases (OMLs) 26, 30, 44 and 42 (Forcados assets) and OMLs 60, 61, 62 and 63 Brass assets.

    The judge held that the SAAs  entered into the applicants and respondents in the suit are still binding on the parties.

    He consequently restrained the NPDC and NNPC from taking any step on the basis of the notices of termination dated June 2, 2016 and served on the applicants pending the inaugural sitting of the arbitral tribunal to be constituted pursuant to the provisions of Article 22 of the agreement.

    Justice Dimgba however, said the restraining order would elapse on the day of the inaugural sitting of the tribunal or precisely at a period of 60 calendar days from the day of the judgment.

    He said being an order to aide arbitration, it is to enable arbitral tribunal to seize the entire proceedings and to decide for itself if it wishes to grant any interim measures of protection or any orders at all as it is empowered to do under the Act and rules.

     The judge faulted the respondents for not keeping to terms of the SSAs which in Article 24.3 obliges them to issue 30 working days notice of remediation to the 1st applicant of which failure to remedy any identified default within which the set time will lead to the automatic termination of the agreements.

    He said but the notices given by the respondents to the applicants based on its exhibits T7 to T11 were not “30 working days” but “30 days” which are two different things

    “Although I have held that the jurisdiction on the substantive and procedural validity of the termination of the agreements resides with the arbitral tribunal and not with this court, I cannot close my eyes to the fact that even on the face of it, there are deep questions regarding the validity itself of the notices of termination on which the so-called completed act is anchored.

    “The SSAs by Article 24.3 obliges the 1st respondent to issue 30 “working” days notice of any identified default within the set time will lead to automatic termination of the agreements. But the notices that were given on the face of the exhibit T7to T11 are not 30 “working: days’ notices. I believe these to be different things. It is possible that the arbitral tribunal may take a different view, which I serious doubt.

    Indeed, it is noteworthy that while the parties in some parts of the agreement such as Article 22 used “30 days” to define some obligation, but in Article 24.3 on termination, they used “30 working days” to define the notice obligation, indicating that this was on purpose and not an accident.

    “Therefore, in my view, in the face of the above identified doubts regarding the validity if the termination (in procedural sense), if the respondents go ahead to take any steps on it as a ‘done deal’ as their attitude appears to betray, before the arbitral tribunal is  formed and has set to consider whether it should give any interim measure of the protection as the tribunal is empowered to do under Section of the Arbitration Act and Article 26 of the arbitration rules that would make nonsense of my first primary relief granted to the applicants that the arbitration agreement is binding on the parities in the instant action.”

  • Typically NNPC

    Typically NNPC

    •Current desertion of Atlas Cove Jetty and mounting charges is typical of the corporation’s inefficiency

    Hardly any heart-warming stories filter out of the Nigerian National Petroleum Corporation (NNPC) in the past few decades. To illustrate, young Nigerians who are 20 years old or more would likely perceive the NNPC not as the highly liquid, blue-chip energy conglomerate it was designed to be; but as a cesspit of corruption and the hallmark of corporate inefficiency.

    The simple reason is because of what has become an abiding and endless stories of sleaze and malfeasance that emanate from that behemoth. Indeed, it has been quite a very long while that any good news filtered out of NNPC.

    For more than 20 years, Africa’s largest petroleum conglomerate cannot maintain old refineries or build new ones. Therefore, Nigeria, a top-10 crude oil producer in the world has long been consigned to a net importer of over a dozen petroleum products. The cost of running this convoluted operation to the economy can only be imagined. But needless to say that the result is a reflection of the state of Nigeria’s economy today.

    A catalogue of NNPC’s grievous lapses would fill a book. It is perpetually behind in paying Joint Venture cash calls; NNPC is never quite sure how much crude oil is lifted as pilfering is rampant; it cannot track imports as the subsidygate scandal has shown and it cannot monitor its pipelines or maintain any of its strategic facilities. Of course it cannot keep its books and top officials seem to have their hands permanently stuck in the cookie jar. It has been one huge, long-running mess.

    And the sad story seems unending. Apart from a recent report alleging that Shell has been found to be helping itself to Nigeria’s crude, another case last week is the partial shutdown and desertion of Nigeria’s number one petrol jetty and storage facility – the Atlas Cove.

    The jetty is reported to have been near grounded in the last six months resulting in about N6.7 billion demurrage incurred by vessels on contract with the NNPC. According to report, full operation for vessels to discharge, store, distribute products through the jetty has been hampered if not stalled completely in some aspects.

    Several mother ships are reported to be on the high sea for weeks, unable to discharge their cargo even though the jetty has the capacity to berth them. Each ship is said to pay about $35,000 per day as demurrage amounting to well over N6.7 billion in the past six months.

    The problem of the Atlas Cove Jetty is said to be compounded by the damage of the pipeline which takes products from the jetty to depots in Ejigbo, Mosimi, Ibadan, Ore and Ilorin. Besides the failed System 2B pipeline, storage tanks in most of these depots are reportedly dysfunctional.

    From the foregoing, it is therefore not an overstatement when NNPC, Nigeria’s state-owned oil conglomerate is described as symbolising inefficiency and systemic rot. In ordinary times and indeed, in other climes, it will be expected that there should never be a down time for such a flagship facility as the Atlas Cove Jetty. But to think that this is no ordinary time for Nigeria; especially her oil industry, yet the key driver of the industry carries on as if all is well.

    Nigeria is not refining in any significant quantity; crude oil prices have crashed, thus there is little cash to import desired products. Under this circumstance, one would expect utmost efficiency in managing Nigeria’s dwindling imports and not to incur huge demurrage.

    It is this same attitude that barred NNPC from making any significant investment in Nigeria’s energy sector in these past decades; especially in an era of high crude prices when other state- owned oil firms made giant steps developing their refining and petrochemical capacities. Algerian, Libyan and Moroccan state-owned firms are today reaping from some of the investments they made in the years of boom.

    The Federal Government must resolve today to restructure the NNPC to run like the world-class corporation it was designed to be.

  • NNPC laments low oil production

    NNPC laments low oil production

    The Nigerian National Petroleum Corporation (NNPC) has expressed its readiness to partner with stakeholders in oil and gas to grow the nation’s fast depleting reserves.

    The Group Managing Director (GMD), NNPC, Dr. Maikanti Baru, made this commitment when the Nigerian Association of Petroleum Explorationists (NAPE) hosted him to a dinner in Abuja at the weekend.

    He said the 2016 national average oil production of 1.9 million barrels is low partly due to oil infrastructure vandalism, saying there’s need for stakeholders to share data and use common available resources to reduce cost of operations in the area of rig-sharing, vessel sharing and synergy in projects development. He said this has become expedient in this era of low oil prices and security challenges, according to NNPC statement

    “Our national gas demand forecast to year 2020 (domestic plus export) indicates a rapid growth to 15bscfd, meaning current reserves level can only sustain that production for 35 years if we do not increase the 2bscfd gas reserves base which require 3tcf to replace production yearly,” he said.

    The GMD challenged NAPE and other stakeholders to focus on increasing the nation’s oil and gas reserve base to match national aspirations, by increasing oil production to four million barrels per day and meet gas demand of 15bscfd by 2020 required for  industrialisation  and consumption.

    Baru said the less than three per cent of all wells drilled in the Niger Delta Basin both onshore and swamp are deeper than 15,000 feet, adding that a greater number of these wells have not gone beyond the 10,000ft as a high pressure regimes seems to be a limiting factor.

    On frontier exploration, the NNPC chief said the Corporation is progressing exploration efforts in Chad Basin, Benue trough and the other frontier basins so as to shore up the reserve base of the country.

    He said: “Some of our earlier drilled non-commercial holes could be turned around if we deploy requisite technologies. We need to change our perspective of risk as technology is advancing.”

    Earlier, the NAPE President, Nosa Omorodion said his association is ready to support NNPC in its drive to grow reserves towards increased producibility in all the frontier basins.

  • Forex scarcity: NNPC remains major fuel importer

    Despite the increase in  pump price of premium motor spirit (PMS) or petrol to N145 per litre from N87, the Nigerian National Petroleum Corporation (NNPC) still retains its status as the sole importer of the product, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore has said.

    He spoke with The Nation on the sideline of the inauguration of four PMS storage tanks at Mosimi depot in Ogun State.

    He said marketers were shunning  importation because of the inaccessibility of foreign exchange (forex), leaving the responsibility of importation for NNPC alone.

    Olawore said: “The truth is that NNPC is  importing more than anybody because it has easier access to forex than everybody. Our intention is that once the sector is fully deregulated, we will increase our importation. They (government) only increased the price of petrol and that is not deregulation. You don’t deregulate with fixed price, you allow the price to float. Even though we see some floating of prices as some people sell below the N145 per litre price band, you have to verify if the quantity delivered and quality delivered are satisfactory. The DPR has to do that or you also can check fuel outlets, as a consumer, to know if you buy fuel that will knock your engine.

    “Frankly, we are hampered by unavailability of forex. The fuel we are importing is through the intervention of the Minister of State for Petroleum Resources who has kindly agreed with the international oil companies (IOCs) to give us forex. I can only speak on allocation but not on the actual importation.”

    Speaking on the reconstructed and rehabilitated storage tanks in Mosimi, the Group Managing Director of NNPC, Dr Maikanti Baru said rehabilitation of tanks 11, 12, 13 & 22 at the depot, by Messrs. Adano Engineering Company Nigeria Limited, fits into one of NNPC’s 12 key business focus areas, the restoration of oil and gas infrastructure.

    Baru said: “It is pertinent to point out that this project has not only restored the original combined storage capacity of 87.70 million litres for the four tanks, but also increased it by 220,000 litres. This combined storage capacity represents over 54 per cent of the total storage capacity for PMS otherwise known as petrol at Mosimi depot and has significantly enhanced strategic storage capacity of PMS nationwide.

    “It is noteworthy that the completion of these tanks and the gauging/metering technology adopted has underscored some of the corporation’s key business focus areas namely: reduce waste and stop leakages; push for best practice efficiency in operations; drive delivery and execution; and maximise profitability.”

    The NNPC chief further said: “We wish to recall that Mosimi depot was constructed in 1978 for the storage and distribution of petroleum products to the western part of the country. Unfortunately, tank 13 was gutted by fire in 1997; while tanks 11, 12 and 22 have worked satisfactorily for 23 years but their respective floating roofs collapsed at different times in 2001 which made them unserviceable.

    ‘’The non-usage of these decrepit tanks imposed operational constraints to products storage and distribution in Mosimi area which in turn negatively impacted on the turnaround time of product vessels at Atlas Cove Jetty with concomitant huge demurrage charges to NNPC operations.

    “It, therefore, became necessary that tank 13 should be reconstructed and tanks 11, 12 & 22 be rehabilitated to restore the operational capacity of Mosimi depot and overall profitability of the corporation.”

  • NSCDC uncovers illegal bunkering site in Alimosho

    NSCDC uncovers illegal bunkering site in Alimosho

    Operatives of the National Security and Civil Defense Corps, (NSCDC) on Friday uncovered illegal fuel bunkering activities at a boundary between Mosan Okunola and Agbado/ Oke Odo Local Council Development Areas of Alimosho, a suburb of Lagos..

    The operatives were led by NSCDC Commandant, Tajudeen Balogun to the site where it was discovered that some people had been siphoning petrol from a Nigeria National Petroleum Corporation (NNPC) pipeline across a river in the communities.

    The pipeline was reportedly vandalised by a syndicate in the area.

    Although, the suspected vandals had fled before the arrival of the operatives, but the law enforcement agents recovered some of their tools including long  pipes and hose with which fuel is  scooped from the vandalised pipeline.

    The operatives, however arrested a security officer, Sam Benedict, who was in charge of the toll collection of a makeshift bridge constructed across the river linking the neighbouring communities.

    Sam, who denied knowledge of the illicit operation said he was employed by his boss for toll collection ranging from N20 to N200 from pedestrians and motorists.

    He added that the business was solely run by his boss who is a lawyer.

    Our correspondent observed a couple of tankers parked along some streets leading to the river bank, while no petrol station was sighted in the area.

    At the scene, some chairs and empty soft drink containers were seen on the path leading to the vandalized pipeline. The items, according to the NSCDC operatives indicate regular activities in the creek.

    The commandant, however, vowed to investigate those behind the operation, noting that appropriate sanctions would be meted on the culprits.

    He urged residents of the community to desist from backing criminals involved in vandalism, warning that such could lead to unexpected jeopardy.

    Balogun said: “We got an intelligence report from our division here that something fishy was going on in this area and I am here to confirm it. What we have seen is a petroleum pipeline has been vandalised and normally our own duty is to confirm and get across to the appropriate authorities. In this instance, NNPC should come over immediately to seal it up so that our national asset will not be disturbed by  wastage, sabotage and miscreants.

    “We are still extending our investigations to know the perpetrators of this act because that thing did not just happen. Somebody worked on that pipeline to drill it with the intention of siphoning petrol which is economic sabotage. Our own intelligence group will sniff around to see if there are some collaborators within the community, who are aiding and abetting illegality and will work with the appropriate authorities to see how we can stop this from happening.”

    Continuing, he said: “We are working in conjunction with the Lagos state government to clear all the creeks so that doing anything under darkness will not be allowed. We appeal to the communities around here, residents who live here permanently that there is no need to be selfish and supporting criminal to do this kind of act.”

    The corps also called the attention of the government to the recent leakages of NNPC pipelines, following the discovery of another fuel well at a school on 2, Taiwo Aina Street.

    The commandant emphasized the need for the NNPC to proactively tackle the challenge with proactive measures, noting that the inherent hazards were beyond economic sabotage.

    The well, he said, currently poses danger to toddlers who often use the school premises.

    “The most important thing is that right now, to avoid a disaster which could be manmade, because when petrol is usually in a place like that, and there is fire, you can imagine what will be the case. To make matters worse, this is the premises of a school. We have little children here,” he added.

  • NNPC ‘ll optmise gas sector benefits, says Baru

    NNPC ‘ll optmise gas sector benefits, says Baru

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru yesterday pledged the support of the NNPC to help the Nigerian Gas Association (NGA) achieve its objectives of ensuring that the country derives maximum benefit from its huge gas resource base.

    Speaking while receiving the NGA delegation led by its President, Mr. Bolaji Osunsanya, at the NNPC Towers Abuja, Dr. Baru noted that as the midwife of the nation’s premier gas association in 1999, the NNPC has a moral and strategic interest in ensuring the continuous existence and sustained growth of the association.

    The corporation’s Group General Manager, Group Public Affairs Division, Malam Garba Muhammad disclosed this in a statement yesterday.

    Describing the NGA as a reflection of the development of the gas industry in Nigeria, the GMD said the Corporation would continue to provide the association with human and material resources.

    While thanking the members of the NGA for their advocacy in ensuring a review of existing Production Sharing Contracts (PSC), gas terms, Baru noted that the NNPC is working round the clock to ensure the maximisation of the nation’s vast gas resources by incentivising all parts of the gas value chain.

    Osunsanya thanked the NNPC and Dr. Baru for the unflinching support for the association and pledged the readiness of members to work with the NNPC in this regard.

    Osunsanya called on government to create incentives which would promote deliberate and well-funded projects in the search for gas as against the practice of accidental gas discoveries.

  • Oil spill fire: Victims petition NHRC on NNPC’s negligence

    Oil spill fire: Victims petition NHRC on NNPC’s negligence

    Victims of the December 2015 oil spill fire at Effurun in Delta State have decried the alleged refusal by Nigeria National Petroleum Corporation (NNPC) to pay them N70 million compensation.

    An oil spill from ruptured pipelines caught fire on December 4, last year, resulting in massive destruction of property; vehicles, homes, stalls and other valuables estimated at over N70 million.

    Victims of the fire, through their estate valuer, Edwin Agammegwa, petitioned the National Human Rights Commission (NHRC) to investigate the incident and make operators of the pipelines to compensate them.

    The petition, which claimed the victims contacted the NNPC and National Oil Spill Detection and Response Agency (NOSDRA), the government body responsible to victims of oil spills, said a damage assessment was conducted on the incident between February 11 and 12.

    The petition said although a valuation report was conveyed to the NNPC, and  reminders sent to its offices in Warri, no favourable response was received.

    It added that the destruction subjected the victims and their families to untold hardship.

    The petition said: “When the spill occurred on December 3, 2015, they mobilised to the site with their contractor. They began to recover the spilled oil. This area is the service lane of the expressway. It is also facing the fence of the army barracks. This area is occupied by roadside traders and motor mechanics. Some people also parked their cars on the service lane.

    “When the spill occurred, the contractor stopped owners of the vehicles, mechanic workshops and trading shops …from removing their vehicles or the items in their workshop to avoid a fire.

    “During the operation, the equipment they were using to dig holes to gather the oil, hit an electric cable and it caught fire. It burnt 11 vehicles, one bulldozer, mechanic shops with tools as well as trading shops.

    “Our clients are suffering …because of the destruction of their means of livelihood. We, therefore, call on you to use your good offices to investigate this matter and compel them to pay compensation to the affected individuals.”