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Tag: NNPC

  • Canadian investor tackles NNPC

    Canadian investor, Stephen Shefsky, has described as unfortunate the decision of the Nigeria National Petroleum Corporation (NNPC) to abort its $453 million (U.S.) oil deal in the Niger Delta.

    Despite winning a competitive bid and paying the full $453 million into an escrow account, Shefsky and his  partners have seen their new asset subjected to a takeover by NNPC.

    “I feel absolutely sick about it,” said Mr. Shefsky, president and chief executive of James Bay Resources Ltd., the Toronto-based company that spearheaded the oil acquisition and owns 45 per cent of the company that won the bid.

    “I went in with my eyes open and I thought we were doing the right thing. Somewhere in the system, something happened.”

    Competing against several other bidders, Mr. Shefsky and his partners won a bid in June, 2014, to acquire the lucrative oilfield asset from the Nigerian subsidiaries of Shell, Total and Agip, which together owned 45 per cent of the oilfield.

    But last October, as he was preparing to hire Shell’s former employees at the site, the NNPC announced that it was using its preemptive rights to take over the asset – although those rights should have expired 30 days after the bidding finished.

    The letter from the NNPC dated October 27, 2014 did not give any reason for the decision. It simply ordered Shell and the other two companies to “assign” and “transfer” their interest to it.

    Shefsky said he is mystified by the decision, since about 20 similar divestment deals have gone ahead without preemption. He suspects there are more than just business factors at play.

    “I believe it involves politics,” he said in an interview on Monday.

    He has hired a high-profile Canadian lawyer, Robert Amsterdam. In a statement, Amsterdam cites the possible role of corruption in the case.

    “The timing of all of this behavior, right before an election, is very suspicious,” Amsterdam said in an interview in Johannesburg.

  • NNPC: we’re owing marketers

    NNPC: we’re owing marketers

    Following the Federal Government’s intervention, Petroleum Product Pricing Regulatory Agency (PPPRA) Executive Secretary Farouk Ahmed yesterday said the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, had approved that the Sovereign Debt Notes (SDN) be payable on March 30 to the oil marketers.

    The Group Managing Director,  Nigerian National Petroleum Corporation (NNPC), Dr. Joseph Dawha,  said the Pipeline Products Marketing Company (PPMC) promised that there would be normal supply of products in Abuja and its environs today.

    With him were Chief  Executive Officers (CEOs) of the corporation’s  subsidiaries  during an inspection of petrol stations opposite the NNPC  towers in Abuja.

    Dawha said: “We are here to see how thing are going on, we know that there is enough supply to cover all the filling stations but I wanted to see things for myself with the NNPC and things are getting back to normal.

    ”The PPMC has told us that by tomorrow (today), there will be normal supply in Abuja environment.”

    He added that more trucks are coming from the Suleija depot and more are coming from Lagos to clear the queues as quickly as possible.Tracing the root cause of the scarcity,  Ahmed said that commercial banks’ reluctance to issue letters of credit to marketers for importation fuelled the petrol scarcity.He said the devaluation of the naira caused confusion in the banking sector that further worsened the scarcity.

    His words:  “The problem actually started with the banks who were reluctant to issue letters of credit to marketers for importation and this was compounded by the naira devaluation by the CBN and that brought some confusion into the banking sector.

    ”Ahmed said Mrs. Okonjo-Iweala had approved Sovereign Debt Notes payable on March 30 to the oil marketers.He noted that the agency is expecting about 8000 metric tonnes which is about one billion litres this month while other marketers are bringing in products this weekend.

    PPMC Managing Director Haruna Momoh said: “If we had our pipelines fully in shape, within two days, we would have had this situation cleared because our supply is much more robust, as at today. We have quite a number of vessels that have arrived over the weekend and we are expecting much more to arrive before the weekend.Regretting that the pipelines are not working, he said that the quickest, safest and most environmentally friendly and easiest way to transport petroleum products in a country that is as large as Nigeria is through the pipelines.

    Department of Petroleum Resources (DPR) Director George Osahon  said  marketers were hoarding fuel in anticipation of price increase by the Federal Government.He said that: “The issue now is people hoarding fuel so that price will go up. Over the course of time, several things will come up to enable pinpoint who is hoarding, but now, we still use the dip stick system to determine the volume of product in tanks.”

     

  • NSA, Ministry, NNPC to tackle vandalism

    THE National Security Adviser (NSA), the Ministry of Petroleum Resources and Nigerian National Petroleum Corporation (NNPC) have initiated moves to curb pipeline vandalism and crude oil theft through digital surveillance.

    The initiative will also ensure that operators deploy sensors where there are pipelines to check the menace. The mechanism will connect every centimetre of the pipeline and ensure that operators are informed of any act of vandalism on any pipeline.

    The Group General Manager, Group Public Affairs, NNPC, Ohi Alegbe, said the industry is at a stage where opportunities in technology are being explored to stop pipeline vandalism and other untoward practices.

    He said efforts are ongoing to use sensors, adding that the involvement of NNPC in the fight against pipeline vandalism and other untoward practices was in line with its responsibility to develop the upstream and downstream sectors.

    He said the  corporation distributes petroleum products to its depots through pipelines, and at the same time uses the channel to provide gas to the end-users, especially the power generation companies (GENCOs).

    He stated that pipeline breakage and other problems are critical to the growth of the sector, adding that the government is not leaving any stone unturned to stop it.

    He said the  National Security Adviser (NSA), Col Sambo Dasuki( rtd) is the only competent person mandated to speak on the technology, in view of the importance the Federal Government attaches to the issue of pipeline vandalism.

    Alegbe said information regarding the use of the technology are sensitive, and is therefore, being protected from the public to enable the government achieve its desired results of reducing pipeline destruction.

    Also, the Senior Special Assistant on Gas to the Minister of Power, Dr Frank Edozie said the ministry, National Security Adviser and NNPC are involved in the scheme to tackle pipeline vandalism through digital method.

    He said the Ministry of Power does not own pipeline, but only uses it as a channel through which gas is transported to the power generation companies (GENCOs) for electricity production.

    Ownership of the pipelines, he said, revolves around the International Oil Companies (IOCs) and NNPC, adding that the development underscored the reasons behind the involvement of NNPC and the Ministry of Petroleum Resources in the fight against pipeline vandalism.

    Edozie said the government has deployed military and para-military details to monitor pipelines and arrest vandals. He said the Joint Task Force (JTF) comprising the army and the police have arrested and prosecuted vandals, stressing that the devices are going to complement such efforts.

    He said: “In the past, efforts were made by the government to secure pipelines. The Army, Navy, Police and the Nigerian Civil Defence Service Corps (NCDSC) monitored pipelines but now, the government has put in place measures to complement the physical protection of the pipelines by ensuring that sensors are deployed into pipeline areas or zones.  The effectiveness of the sensors depends on the number of operators deployed to check vandalism.”

    The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said the government has zero tolerance for vandals, stressing that a more proactive measure would be used to curb the practices.

  • Reps to probe NNPC for $14.9bn NLNG profit

    Reps to probe NNPC for $14.9bn NLNG profit

    •Corporation heads for court to stop lawmakers

    The House of Representatives is set to probe the whereabouts of $14.9 billion (about N3 trillion) profit the Nigeria Liquefied Natural Gas  (NLNG) Company paid to the Nigerian National Petroleum Corporation (NNPC).

    The amount represents dividends accruing from the sales of liquefied gas from 2004 to 2014 and which the NLNG Company said it paid into the corporation’s accounts.

    The Chairman of the House of Representatives Committee on Public Accounts, Solomon Olamilekan Adeola, who said this at the weekend, added that the committee would move a motion of urgent national importance at plenary tomorrow to compel the NNPC to bring relevant documents.

    But, the NNPC has moved to stop the House from getting the documents as its lawyer, Mike Ozekhome & Co Chambers, wrote the House Committee last Friday saying it has no right to request for the LNG accounts.

    Speaking at the weekend, Adeola said: “Just about a month ago, we invited the NLNG to appear before the committee on Public Accounts. They came and told us that Federal Government has 51 per cent holding in the LNG while 41 per cent is owned by Shell and others in the private sector.

    “Yes, if we have 51 per cent, how much of these funds have returned to the Federal Government as dividend? They said they have it. And between 2004 and 2014, they remitted to the NNPC coffers in form of dividends $14.9 billion.

    “We wrote to NNPC asking for an evidence for the sources of revenue, the bank statements, and if there is any expenditure for that account and any other item they can furnish us with.

    “We received a letter from their lawyer, Mike Ozekhome & Co, quoting Section 88 and other relevant sections of the constitution as to why they cannot and will not come before the committee with these particular documents.”

    The lawmaker said Ozekhome’s chamber was a private law firm and did not represent the law courts and that NNPC’s action showed  “that there is more to what we’re seeing.”

    He stated that the committee made a simple request on transactions that concern the generality of Nigerians, “and the next line of action is to go to your lawyer to start writing us and from there move to court to seek injunction preventing us from that document.

    “This tells you the extent to which they have used the judiciary to stall a lot of investigations we are carrying out as a House.

    “And on Tuesday (tomorrow), I want to come by a motion of urgent national importance so that the House can know what is in the offing as far as NLNG is concerned,” the committee chair said.

    He noted that a similar fate befell the investigation of the N10 billion allegedly used by the Petroleum Minister, Mrs. Diezani Allison- Madueke, for chartered flights for private travels.

    A court injunction truncated the probe by the same House Committee.

  • CBN orders NNPC, Customs to shut revenue accounts

    CBN orders NNPC, Customs to shut revenue accounts

    •’No plan to scrap domiciliary accounts’

    The Central Bank of Nigeria (CBN) yesterday directed Ministries, Departments and Agencies (MDAs) to close all their revenue accounts in deposit money banks (DMBs) latest tomorrow.

    The MDAs to be affected by the order include the Nigeria National Petroleum Corporation, Nigeria Customs Service, Code of Conduct Bureau, Code of Conduct Tribunal, the Economic and Financial Crimes Commission, Federal Ministry of Aviation and Federal Civil Service Commission.

    Others include the Federal Inland Revenue Service, Federal Road Safety Commission, Independent National Electoral Commission, Federal Ministry of Defence, National Population Commission, National Salaries Incomes & Wages Commission, Nigerian Investment Promotion Council, Nigeria Police Force to mention but a few.

    CBN Director, Banking and Payment System Unit, ‘Dipo Fatokun who gave the directive in a circular to DMBs said the order followed the commencement of the Federal Government’s Independent Revenue e-Collection Scheme.

    He explained that banks’ branches by now, are expected to have been setup and sensitised, and their internet banking platform configured for use by revenue payers.

    This, he said, would make it possible for the banks to make transfers to the Federal Government e-Collection account, which will be transfered to the Consolidated Revenue Funds (CRF) as agreed between the CBN, Office of the Accountant General of the Federation (OAGF) and the banks.

    Fatokun said the OAGF has already issued a treasury circular to all MDAs to close existing revenue accounts in banks not later than February 28, and transfer available funds to CRF.

    The CBN has also denied report that it is planning to convert the foreign currency domiciliary account deposits in dollar or pounds sterling of customers in banks into naira.

    CBN Director of Communications, Ibrahim Mu’azu said the regulator never contemplated such action, and never intended to do so. It assured customers of banks that there is no intention to tamper with the foreign currency accounts.

  • ‘Submit NNPC forensic audit report in one week’

    THE House of Representatives Committee on Public Accounts yesterday gave the auditor-general of the federation a week to submit the forensic audit of the alleged missing $20 billion oil funds on behalf of the Federal Government.

    The committee blamed the Minister of Finance, Mrs. Ngozi Okonjo- Iweala, for the faulty manner in which the forensic audit was commissioned to PricewaterHouseCoopers.

    Chairman of the Committee, Solomon Olamilekan Adeola, spoke to reporters yesterday while making a final demand for the audit report.

    Adeola, who described the report as “curious”, noted that by virtue of Section 85(6) of the constitution, the auditor- general ought not to be directed by Mr. President to deal with the report “in a particular manner.”

     He said the report had been unduly delayed and “side-stepped the auditor-general”, adding that the report lacked credibility and reliance as the minimum expectation “was to get the auditor-general to receive and own the report.”

    The committee, therefore, requested that “the full report on the Forensic Audit by PWC, which must include the initial draft report, the Executive Summary, Management/Internal Control Letters, should be forwarded to the National Assembly not later than one week from today (yesterday)”.

  • Fuel price hits N130 in Akwa Ibom

    Fuel price hits N130 in Akwa Ibom

    MOTORISTS are experiencing tough times in Akwa Ibom State, following the increase in the price of Premium Motor Spirit (PMS).

    PMS or petrol is being sold at N130 in most of the filling stations our reporter visited yesterday in Uyo, the state capital, and other major cities nearby.

    At the Nigerian National Petroleum Corporation’s (NNPC’s) Mega Filling Station on the Ikot Ekepene Road in, Uyo, there was a long queue of vehicles waiting to buy the product at N87 per litre.

    It was learnt that the mega station was the only filling station selling petrol at N87. Most of the independent marketers sold at higher prices.

    At the filling stations on Ikot Ekpene Road, Oron, Abak and Nwaniba roads, a litre of petrol was sold for between N120 and N130.

    Most motorists, who spoke with our reporter, condemned the attitude of the independent marketers and major marketers.

    They said the marketers contributed to the hardship motorists were facing by selling above the N87 pump price per litre.

  • NNPC’s indigenous challenge

    NNPC’s indigenous challenge

    • An industry without engineers is a sad paradox

    THAT the Nigerian National Petroleum Corporation (NNPC) is now looking inward in its bid to find solution to the intractable maintenance glitches of refineries in the country should ordinarily be heart-warming. But, it is beyond that, especially given the circumstances under which the decision was taking.

    The corporation said some of its in-house indigenous engineers have been saddled with the task of rehabilitating the country’s three ailing refineries, including Port Harcourt Refining Company, Kaduna Refining and Petrochemical Company Limited and Warri Refining and Petrochemical Company Limited. The decision was reportedly taken to save cost, since foreign contractors working with the corporation threw a bill of $1.6bn (N288bn) on its laps as against the in-house engineers’ $550m (N99bn).

    Mr. Ian Udoh, NNPC’s Executive Director, Refining and Petrochemicals, during a media parley on preference for indigenous engineers and costing puts it succinctly: “For the three refineries, the estimates going with the nominees of the original builders of the refineries would have come up to $1.6bn. But we can’t afford that because we are not going to get any funding from the government for that. We examined the work scope and picked up the essential things that we must do to get these refineries to operate optimally at around 90 per cent of capacity. That was done and we did the pricing template; not the international rates, we used the local rates. And everything for the three refineries combined came to around $550m, which is significant, maybe up to 70 per cent reduction.’’

    He added: ‘Even the $550m is quite much. So, we amortised it over 18 months so that we will be able to swallow it in bits more easily. The 18 months started since last October and this means that early next year, the refineries should be in shape.” In other words, therefore, funding was the necessity that brought about the ‘invention’ in this case. This is where our fear lies.

    Why did it take the NNPC this avoidable snub and its attendant high cost to know that these foreign engineers have shown no commitment to the nation but to her money? But the corporation is to blame for this belated recognition of indigenous engineers in its stable in over 54 years of the nation’s independence. The question of local engineers handling the TAM ought to have been settled years back; indeed they ought to have been understudying their foreign counterparts since the establishment of the refineries. If they had done that, they would have been familiar with the operations of the refineries and we would not have cause to be apprehensive over reports that they (local engineers) are now to do the TAM.

    However, having settled for the option, perhaps the point the corporation is making is that it is better late than never, to challenge our local engineers with a view to bringing out the best in them. But what we would not want is a situation where the refineries would be used for trial and error purposes that would end up being counter-productive to the nation. These are critical equipment that require specialised skills to handle. Our fear is exacerbated by the fact that the original builders of the refineries had pushed forward their purported partners that are not willing to give the standard engineering pledge of post-rehabilitation performance guarantee.

    All said, we hope that the current NNPC leadership would do everything to ensure standards for the TAM under any circumstance. One of the things that Nigerians want from the corporation are functional refineries. It is a shame that Nigeria is the only major crude oil producer that is importing refined petroleum products.

  • Interbank rates ease on retired N100b TBs

    Interbank rates ease on retired N100b TBs

    The overnight lending rates fell to an average 25 per cent on Friday from a record high of 95 per cent fortnight ago, after the Central Bank of Nigeria (CBN) retired about N100 billion in Treasury Bills (TBs), dealers said.

    Traders said the repayment of matured Open Market Operation Treasury bills provided some liquidity in the market but not sufficient to lower the rates further because the cash was used up by lenders to buy TBs and foreign exchange.

    The secured Open Buy Back and Overnight rates fell to 25 per cent each from 95 per cent previously. The CBN sold about N142 billion in TBs with maturities ranging between three-month and one-year last week.

    The Nigeria National Petroleum Corporation (NNPC) recalled some of its deposits with banks, cutting back on the level of available liquidity for transactions in the system.

    Banks’ cash balance with the CBN stood at around N4.8 billion credit on Friday, compared with a deficit of around N25 billion on Monday, traders said.

    “We expect an increase in cash flow into the system this week because of possible disbursal of budgetary allocation for January to government agencies, and rates should fall below the 20 per cent level,” one dealer said.

    The Nigerian economy has lost more than 20 per cent in the past three months as oil prices collapsed and concern grew among investors about political stability after the six-week postponement of the Feb. 14 elections.

    Meanwhile, bonds yields are seen rising this week on the back of tight naira liquidity that may spur a sell off by investors in need of cash, while longer dated Kenyan debt could be in demand.

    Traders said yields climbed slightly on some maturities when investors reduced their positions after the naira currency lost more than 20 percent to the dollar in the past three months. The naira tumbled as global oil prices collapsed and concern grew about political stability. “Some investors… would rather reduce further their positions until after the election when the outlook will become clearer,” one dealer said.

  • NNPC promises to promote in-country capacity

    The Nigerian National Petroleum Corporation (NNPC) has reiterated its commitment to promoting in-country capacity by leveraging on indigenous companies with requisite technology to add value to the oil and gas industry.

    The executive director, Engineering and Technology of the Corporation, Engr Adebayo Ibirogba, stated this while inspecting the fabrication yard of an indigenous company along with some NNPC senior staff from different subsidiaries in Lagos.

    Ibirogba noted that Kaztec Engineering Limited is one of the indigenous clients of the Corporation, stating that the fabrication yard of the company is a model of excellence.

    The Group General Manager, Group Public Affairs Division (NNPC), Ohi Alegbe, disclosed this in a statement yesterday.

    According to the statement, the GED stated that the Nigerian Content Act of the federal government provides a veritable platform for indigenous companies to operate on a level- playing field with other International Oil Companies.

    According to him, the NNPC has been at the forefront of those supporting and encouraging the attainment of the local content target for the industry.

    Ibirogba said investing in local content will yield some advantages to local fabricators, adding that the federal government would ensure total encouragement of potential investors who want to invest locally.

    He said the Petroleum Industry Bill before the National Assembly when passed into law, would further promote the growth of indigenous participation in the sector.