Slashed Dividend for the First Time since World War II – Shell


By Israel Momoh

The intimidating effect of the Corona virus pandemic has caused an unprecedented drop in the demand for crude oil and ally products as most economies are shutting down, resulting in a retrench by Royal Dutch Shell RDSa, cutting her dividend for the first time since world war II.


After a drop in its nets profit for the first three months of 2020, the company has also said that it was reducing oil and gas output by nearly a quarter, suspending the next tranche of its share buyback.


This move has seen the long-held pride of the company, maintaining its dividend since the 1940s and even during the deep oil downturns in the 1980s, fall for the first time in nearly 80 years.


Shell shares in London had slumped by 7% sharply behind rivalry BP (BP.L), which was down by 2.2% by 07:53 GMT.


Investors are in support of the cut in dividend by oil majors rather than incurring more debts to fund payout.


Shell chairman, Chad Holliday said: “Given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertainty demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent.”


He believes it is a “reset” in the company’s long-term policy with regards to its dividend. She would drop its quarterly dividend from 47 cents in 2019 to 16 cents (a two-third drop). With this move, Shell would save about $10 billion, if maintained for the whole of 2020.


BP and Exxon Mobil have reported sustaining their dividend for the first-quarter while Total and Chevron are yet to report their result for the first-quarter. This makes Royal Dutch Shell, the first of the five oil elephants, to slash dividend because of the pandemic. Outside the majors, Norway Equinor became the first large oil company to slash dividend by two-third, in response to the pandemic and its effect on global demand for crude.


JP Morgan analyst, ChristyanMalek has described the move by shell as a necessary evil, maintaining that the move is one that sees a future as far as 2050, as the company is preparing to face the financial assaults that may hit her finance following the execution of the extensive laid out plan, by the oil and gas sector, to reach a net-zero greenhouse gas emission by 2050.


According to him: “The 66% dividend cut is a necessary evil to reinforce Shell’s capital frame and position it for the offence on the energy transition.”


A total of $15 billion in dividend was paid by Shell in 2019, making her the second largest payer of dividend after Saudi Aramco, the Saudi National oil company. While a whopping 75% (amounting to $75 billion) of the total dividend paid out by companies in the FTSE, was attributed to Shell and BP alone in the previous year.


Her initial intention was to boost payout to investors through dividend and buybacks to $125 billion between 2021 and 2025 upon acquiring BG Group for $53 billion, following years of deep cuts in cost. Shells’ plan is to cut capital expenditure for this year to $20 billion from an initial $25 billion, a $3 to 4$ billion drop in its OPEX for the next 12 months.


Global energy demand has seen a deep shrink in size following the spread of the coronavirus. This slump in demand was stayed at 6%, making it the largest constriction in absolute terms, according to the IEA, on Thursday.


In response to the demand shrink, Shell had cut its refining activities by up to 40%, while there is an expected drop in the barrels of oil equivalent per day (boed), from a 2.7 million in the first quarter to between 1.75 and 2.25 million in the second quarter of this year.


In an analyst survey by Shell, its first quarter net income attributed to shareholders excluding some identified items and based on current cost of supplies dropped by 46% to stay at $2.9 billion, which is same as its net income in the fourth-quarter. Her debt-to-capital ratio was down by 0.4% in the first quarter following a 29.3% in the fourth quarter, but was up from 26.5% in the first quarter of 2019.

Source: Reuters/

Supply Glut Weighs Down As Weak Demand Sees Prices at $26



By Israel Momoh

OPEC+ agreed oil supply cut is seen to kick off today Friday, May 1, 2020 after Brent, the global oil benchmark has collapsed by 60% and reached a 21-year low in April due to a squeezing pressure placed on demand as countries battle the corona virus.


According to LONDON (REUTERS), prices has slipped to $26 per barrel on Friday as weak demand cushions excess supply in the pressured market, even as OPEC and its allies including Russia begins a global cut in output.


BRENT first official contract (LCOc1) for July had seen a 46% low to $26.02 while U.S. crude had slipped by 2 cents to $18.82, both benchmarks rising by 12% and 25% respectively on Thursday.


The cut in output totaled at 9.7 million barrels per day is set to reflect an average balance in demand and supply of this product, by mid-May according to Rystad Energy.


Rystad Energy analyst, Louise Dickson said that, “While this may seem like a drastic improvement from April, the oil market is not magically fixed, the storage issue looms at large,” referring to global oil tanks of most producers sitting at their brim.


Meanwhile, JBC Energy has predicted an under performance in demand, frustrating the cushioning effort of producers and offsetting prices again.


“Crude demand is likely to disappoint even if the more optimistic demand recovery forecasts for end-user consumption materialize, due to high inventory pressure that has built over the last month or so,” the corporation said.


There is a sharp rise in advance of new output cut by OPEC, to its highest since March, 2019, according to a survey by Reuters on Thursday. There is also a restrain by most OPEC allies to meet with their output commitment, citing Iraq, OPEC’s second largest producer. Iraq is most likely to struggle in meeting its quota of output cut by almost a quarter.


With the inventories rising in the previous week to 9 million barrel instead of the projected 10.6 million barrels according to the U.S. Energy Information Administration, there is also some optimism in the prices of crude oil. Chief Market Strategist at AxiCorp, Stephen Innes says: “This is a second straight week of inventory and product demand figures suggesting a bottoming for the U.S. market.”

A Leap in Crude Price as U.S. Inventories Rise beyond Expected Low


By Israel Momoh

There is a 10% surge in crude oil prices after stockpiles grew less than anticipated and gasoline gave a surprise draw, giving a hunch that demand for the product will soon return to normalcy as some European nations are beginning to ease the tension on their economy due to the pandemic, and easing the lockdown.


According to a report by Reuters on Wednesday, there is a global drop in its price earlier this month with about 30% of crude going to storage due to efforts to slow down the spread of the novel virus, oil majors have decided in the mid part of the month to cut down supply by nearly 10 million barrels per day. This cut in production has affected shale oil producers and most of all, economically oil-dependent nations.


The U.S. Western Texas Intermediate (WTI) had settled at $15.06 per barrel and British North Sea Crude (BRENT) at $22.54 with a 22% and 10.2% up respectively.


Last week had seen the U.S. inventories rising by 9 million barrels amounting to 527.6 million barrels, an indication of 7 million barrels drop from their highest record. This rise is slightly less than the 10.6-million-barrel analyst had expected in a survey.


The report shows an obvious fall in U.S. gasoline stock by up to 3.7 million barrels, indicating a modest start for demand offset in the product which recorded a high in the previous week. Gasoline demand for the past week dropped by over 44% compared to the demand from last year, while the global fuel demand has dropped by 28%.


While storage is moving to its brim for the U.S., shale producers are estimated by Rystad Energy consultants, to keep production cuts at 300,000 barrels per day for May and June. This would slow down the pace of storage. Largest oil producing state, Texas and major player-state such as Oklahoma and North Dakota are looking to also cut output, with Texas hoping on a consensus by May the 5th. This is to reach the production cut reached by OPEC+ early this month.


According to Gene McGillian, Vice President of market research at Tradition Energy in Stamford, Connecticut, prices are expected to rise hopefully due to the ease of lockdown on some European countries such as Spain, Germany, France and some states in the U.S., this would result in a boost in prices compared to the previous weeks.


In his words:”As long as we see openings in the economy, we will not see plunges like we saw a week ago, but markets heading back up to pre-crisis days are going to be tough to come by.”



LCCI Move to Cushion the Effect of Sliding Oil Prices on the Nigerian Economy



By Israel Momoh


The Lagos Chamber of Commerce and Industry (LCCI) experts have affirmed the continuous assault of the Nigerian economy by the crashing global oil prices if the Federal Government fails to adjust its economic management model.


According to the report, the chamber has released an outlined economic adjustment model that could help soothe the effect of crashing prices on the Nation’s economy.


With the Nigerian index crude, Brent falling to below $20 per barrel and later settling at $22.34 on Thursday, the plummeting prices have seen Africa’s largest economy revisiting her yearly budget and finalizing on a crude oil bench mark of $30 per barrel, whereas an initial figure of $57 per barrel was used for the 2020 budget estimation.


Currently, the prices are way below $30 per barrel. This would see the country managing a large amount of her necessary expenditure while hoping on an alternative source of revenue.


The Director General, LCCI, Dr. Muda Yusuf, told journalists the importance of taking issues urgently as it presents a challenging scenario. In his words:


“The gloomy oil price outlook presents a very frightening scenario. The Nigerian economy is extremely vulnerable to external shocks, especially from commodity price. Regrettably, the opportunities we had to build buffers were fritted away. There would be considerable dislocations in the economy, both in the public and private sector in the face of stumbling macroeconomics fundamentals.”


Additionally, he said: “This situation calls for urgent and fundamental adjustments in our economic management model. We should develop a model of an economy without oil revenue. This is perhaps the most realistic thing to do at a time like this so that we can confront the stack realities.”


Amid listing other possible measure to be taken by the government, he stated the need for stakeholders to be fully engaged in the entire process. Amongst some of the issues to be addressed citing the LCCI boss includes: “the cost of governance, liberalization of the foreign exchange market and stimulating foreign capital inflows beyond portfolio investments. We should also address the policy and regulatory regimes impacting investments. We should deepen stakeholder engagements to enhance the quality of economic and investment policies.”


Dr. Sam Nzekwe, Ex-president of the Association of National Accountants of Nigeria said that this call was one that has been made long since before now by experts to the Nigerian government, for the diversification of her economy for fear of issues as this. He called on the government to consider possible solution that would ensure that private sectors thrive efficiently in the Nigerian business environment.


He said: “They should look at the industries, production, and agriculture. Our refineries should start refining crude oil and start exporting refined products, the entertainment industry, hospitality sector, culture and tourism; these three sectors with potential to generate revenue for us as a country.”

Source: Punch

Nigeria Oil Industry Decide Hard On Where to Put the Knife for a Cut




By Israel Momoh

Following the decision reached by OPEC+ including Nigeria, to cut crude oil supply by about 22% to halt the free fall of global crude prices, amounting to a 10 million barrel per day cut between May to June 2020, 8 million from July to December and 6 million from January 2021 to April 2022, the Nigerian National Petroleum Corporation (NNPC) is yet to reach an agreement with the major IOCs operating within the country with regards to output cut and modification.


According to the Minister of State for Petroleum, Timpre Sylva, in a release, noted that Nigeria’s production stood at 1.829 million barrel per day as at October 2018 and would now stay at 1.412 million bpd, 1.495 million bpd, and 1.579 million bpd respectively for the period corresponding to the agreement by OPEC+ earlier this month. There is an impeding dilemma as to which company’s output should be restrained in order to meet the supply gap placed on the country’s production.


The turn of event would see both the offshore and onshore prospect and reserve on the brink of an economic shake as the offshore ventures are likened to large investment while the onshore ventures are more prone to financial crises as they are mainly controlled by local oil producing companies.


The Apex energy institution, NNPC have to make a quick call as to which company’s output to affect as her domestic storage are currently overwhelmed by the volume of oil produced, and the country’s Bonny light is selling as a $5 discount from Brent which sells at $22, and yet, there is limited buyers. The overall situation would be dire for all major and marginal players irrespective of their production profile or status.


Unlike most global items, the price of oil to be sold in months’ time would be decided on now and the contract sealed. The official selling prices for Nigerian Oil had still not been announced even though the recent agreement by OPEC+ producers is to take effect from May the 1st. The challenge is one that sees a saturated market filled with crude from competing producers with fewer buyers and with the supply deal, there’s a difficulty for the current Nigeria and global producers.


A Lagos-based Energy Lawyer affiliated with Bloomfield law firm, Ayodele Oni has described the situation as one that would not just happen at the tap of the fingers and some oil fields may require a complete shut-in, according to him:

“Drilling programs and activities to produce oil are not short-term activities and a significant cost is involved.”

With the plummeting of oil price and drop in demand, there exist a significant amount of time needed for producers to finally shut-off wells.


These wells are usually difficult to turn back on once shut-off. It is more reasonable to allow a well producing to keep on producing so far oil price are not zero, even with an overall loss, the CAPEX are to be attended to even in time of economic crises as this, Rystad Energy Analyst, Teodora Cowie said:

“Shutting-in production is a very painful decision for any operator to make, often the economics support running a well at a loss for a certain period of time rather than shutting down the project completely.”


Nigeria’s Export Earnings on Crude has increased by nearly 95% In January




By Israel Momoh


The Nations’ leading energy institution, The Nigeria National Petroleum Corporation (NNPC) in her monthly Financial and Operations Report has stated that oil and gas export sales amounted to $434.85million in January 2020, indicating an increase of 34.30% compared to the figures from December, 2019.


According to the report released by the institution’s Group General Manager, Public Affairs Division, Kennie Obateru, the oil export sales contributed about 77.42% of the dollar transactions for the period amounting to about $336.65million dollar compared to a $136.36million in the previous month. Additionally, the exported gas sales summed up to $98.20million in January, whereas the total crude oil and gas transactions valued at $5.18billion was exported between 2019 to January, 2020.


The 54th editorial series of her monthly report in January, noted the obvious increase in pipeline vandalism across the country, with about 50% increase amounting to 60 points of vandalism in the month of January, compared to 40 in previous month. The vast majority of these attacks were meted out on the Atlas Cove-Mosimi and Mosimi-Ibadan axis contributing to 50% and 17% of the vandalism respectively within the said period while the remaining 33% is owed to other routes.



It stated a preventive measure to be taken by the corporation in collaboration with host local communities to curtail the increase of this act across affected areas.


According to the report, the corporation has ensured zero queue for fuel and related products across the country within the month of January as 1.20billion liters, amounting to an average of 38.68million liters/day of PMS or petrol, was supplied across all consumer pump-point within the country. This was executed in a bid to ensure steady supply of the white product.

A total of 151.16billionCF of gas was commercialized in January comprising of 36.05billionCF from export and 114.96billionCF from the domestic market in the gas sector. This cumulates to 1167.80mmscf (million standard cubic feet) and 3,708.23mmscf of gas supplied to the domestic and export market, respectively.


While 59.89% of average daily gas produced was commercialized, the remaining 40.11% were re-injected, used as upstream fuel or flared.


The flare rate stood at 7.09%(643.59mmscf) for the period of January compared to an 8.46% (671.40mmscf) for January 2019 to January 2020. About 54.78% (6393.70mmscf) of the domesticated gas in January 2020 was utilized in gas-fired power plant while the remaining 45.22% was supplied to other industrial sector.


The report stated that the gas supplied to fired-power plants generated an average power of 2683MW in January compared to the 2,498MW from 596mmscf in December. Also, of the total 1,203.93mmscf of gas supplied to domestic market from January 2019 to January 2020, 693.73mmscf (57.62%) was utilized to feed power generating plants while the remaining 510.20mmscf (42.38%) was supplied to industries.


Benchmark Crude Oil Sees a Two-Decade Low in Price amid Demand Fall


By Israel Momoh

Concerns are triggered around the oil industry as the price of the British North Sea Crude (Brent), the Nigerian oil benchmark crude, hits a $16 per barrel for its first time in 21 years since 1999 on Wednesday the 22nd of April, 2020. The free fall in price is as a result of the choking market with less buyers due to the pandemic.

Brent crude oil dropped to as low as $15.98 and by GMT+4:00pm it was selling at $21.30. As continual assault is unleashed on the demand for this commodity due to the shutdown of major economies of the world, there is bound to be a drastic fall in the price of crude as major buyers are in what seem to be like an economic nap while storage tanks are being overwhelmed from excess crude. This scenario has seen Western Texas future price turning negative for the first time following a 24% drop for Brent on Tuesday.

This drop has seen most market analysist, economist and industry players at sea as to what to do concerning the increasing effect of the pandemic on the global economy of major players such as Nigeria, whose foreign reserve and revenue are largely dependent on the returns of her oil and gas sales.

The chief market analyst AvaTrade, NaeemAnslam, in a note delivered on Wednesday, stated that as most contracts for WTI in May saw a negative value earlier this week, it is unlikely that the same would happen for Brent. A zero value is expected if storage limitations persist with little or no reply from producers, he said. He expects OPEC and to call another meeting within the week given the dependence of the economy of major players on the revenue from oil and gas sales citing Saudi Arabia.

“the sell-off that has been trigged in the Brent price today is highly likely to put more pressure on OPEC+ to cut oil production more,” he said.

The resulting effect of this crash in the price of global crude oil could see Africa’s largest economy under the most ever anticipated pressure. The Nigeria Economy that has been considered Africa’s largest has seen a revision of her 2020 budget after the price of her gold-commodity first had a fall to below $50, and after a revised budget, a benchmark of $30 was placed. With the recent play around the global oil industry, Nigeria would take a huge blow, with pressure and instability in her foreign exchange market, inability to meet the revenue target thus affecting spending and capital project within the country, and the overall negative effect to major upstream project not to mention, the economic standard of living of the common Nigerian.

Already, according to the Brookings Institution report, Nigeria is considered the poverty capital of the world, beating India despite having less than a-third of India’s population.

With the current Embargo on transportation and closure of borders, demand for fuel and other petroleum related products have seen its fastest fall in the past 25 years. WTI has seen a negative return as the future of May contracts expires forcing oil contractors to immediately collect their delivery, and with a choke on storage facilities, traders are cajoling non-interested buyers to take the contracts of their tables, resulting in a very low sales price.

Head of oil markets at Rystad Energy, BjØrnarTonhaugen, relayed to CNBC that the World market should brace itself for really low price within the first weeks of May as storage tanks would be filled to its tip by this time.

“Traders have exhausted their ‘hope storage’ and have nothing else to count on…………Prices can go to unprecedented low levels even for Brent as, unless there are further cuts announced, storage capacity will just not be enough.” He said

He said he expects a surprise that could only be a result of a sudden closure of major flow lines by oil producers, large enough to reciprocate the effect of the fall in global demand for oil as a result of the pandemic. This would be the only way out or expect a really cheap price tag on this global commodity.


Source: Business Day

PMS PRICING: PMS Pump Price to Stay at N125 Says the Federal Government Of Nigeria


By Israel Osagbe Momoh


The Federal Government has issued directives to the Nigeria National Petroleum Corporation (NNPC), to cut down the price of Premium Motor Spirit (PMS), commonly called petrol, to N125 from the initial price of N147.

This the government said is in a bid to reflect the current market condition as well as adjust to the challenging economic downturn of the international market, due to the coronavirus pandemic.

The decision was taken at the Federal Executive Council (FEC) meeting on the 18th March, 2020, presided over by President Muhammadu Buhari, at the presidential villa, Abuja.

The government said the PPPRA will be responsible with regulating the price of PMS and other petroleum pump products in all areas of the nation through a proposed price modulation scheme.

The information which was sourced from the government’s official twitter handle, disclosed that the Petroleum Products Pricing Regulatory Agency (PPPRA), had assured the general public that the change in price may only last until the 31st of march, adding that if the market factors that affected the price of crude remains changing, there would be a review in a monthly schedule to accommodate these changes.

In a statement, the national secretary to the PPPRA, Mr Abdulkadir Saidu said that the agency will continue to observe the price of PMS and would release a new price by the 1st of April, if the parameters controlling the overall pricing of crude would differ within this period

He said that this review would be carried out on monthly basis.

“The approved price of N125 per litre comes into effect from today, which is what would apply till the end of the month. Then, from the 1st of April, PPPRA will be modulating a monthly price of petroleum products based on the market fundamentals. What the new pricing regime is going to be doing is going to be looking at the actual market price. It is going to be a reflection of what the market is doing. The way the market is going, this is N125 today, if by the end of March, the prices go below where they are today, the Nigerian populace will be expected to pay less than N125. It is going to be a reflection of what the market is doing in any particular period.

“What we are trying to say is that going forward, the price will be a reflection of what the international market is doing. Normally, crude oil price determines the product price that we pay. Therefore, if the crude oil price moves, definitely, it is going to affect the price of PMS. If it goes down, Nigeria will pay lower,” Saidu said.

Some Nigerian however expressed disappointment, saying that a reduction in PMS price by only N20 is not enough that the government could do for its people, especially in this harsh economic realities, when the world was challenged by COVID-19 pandemic.

However, with Russia and Saudi set to open their pumps by April, observers hope that the government will devise alternatives to ameliorate the effects of the falling oil prices on the economy.

Source: Vanguard

Nigeria gains more on bilateral trade with China attracting 9.5 billion dollars investment in 2016


By Editor

Trade between Nigeria and China stood at 9.5 billion dollars in 2016, Economic and Commercial Counsellor of the Chinese Embassy, Mr Zhao Linxiang, said on Saturday.

Linxiang gave the figure at a dinner to host participants of different training courses in China in Abuja.

The envoy said though bilateral relations between both countries faced challenges, Nigeria remained China’s fourth largest trading partner in Africa.

“In the first 11 months of last year (2016), our bilateral trade reached 9.5 billion dollars. It is a great achievement under the current condition the Nigerian economy is.

“So far, China’s total investment in Nigeria reached 2.2 billion dollars and Nigeria is China’s important destination in Africa. Our investment cooperation is expanding.


“A large number of Chinese investors and enterprises are concentrated in Nigeria and cover various fields like oil and gas exploration, free trade zone project, steel processing, manufacturing, agriculture, broadcasting and pharmacy among others,’’ the counsellor said.

He added that implementation of the 10 major China-Africa cooperation projects, which began in 2016 was progressing.

The envoy said it was important for both countries to promote win-win cooperation, seek common development goals and maintain high-level exchanges.

Linxiang reiterated China’s commitment to work with Nigeria to strengthen mutually beneficial cooperation and promote Nigeria’s industrialisation and agricultural modernisation.

According to him, both countries can better enhance cooperation in the area of capacity building.

“”We will provide more training and scholarship for Nigerians under the framework of `1000 People Plan’.

““The friendship between both countries needs more publicity,’’ he said.

The envoy said the Chinese Government offered training opportunities to 3,200 Nigerians in the last decade, adding that 260 officials participated in different training opportunities in China in 2016.

“”Last year, we held the 2016 China-Nigeria Agricultural Technical Training programme; 40 Nigerian officials and technicians got trained in Abuja.

““This is a historical beginning which means we can achieve better results through providing localised courses,’’ he said.

Also speaking, the Minister of State for Budget and National Planning, Mrs Zainab Ahmed, said the relationship between both countries was beneficial.

““China has been in several developmental places in Nigeria,’’ Ahmed added.

The minister further remarked that continued engagement with the right partners would bring Nigeria out of its current economic situation.

“”Our focus is to develop infrastructure required to ease the difficulties of doing business in our country and the Chinese companies working in Nigeria are set to help us in deploying those projects.

“”We will be reaching out to you to make sure that some of the projects that we have started discussing are crystallising within the shortest possible time,’’ she said.

Mr Stephen Anayo, who spoke on behalf of the trainees, said that Nigeria could learn from China’s development.

Anayo urged the Chinese Government to sustain the training opportunities, adding that it would promote capacity building and boost development in the country.

“”Transfer knowledge is the best a partner or friend can do for another; China is considered as one of Nigeria’s allies.

“”When people are knowledgeable, they know what to do and do it right,’’ he said.

He called on other participants to utilise the knowledge acquired for the development of the country.

Schlumberger to collaborate with NNPC in search for oil in Chad, Benue basins


By Juliana Agbo, Abuja

A multinational oil service company, Schlumberger and the Nigerian National Petroleum Corporation, NNPC, has reached an agreement to search for commercial hydrocarbon deposits in the Chad Basin and other parts of the inland sedimentary basins.


NAN reports that, a Memorandum  of  Understanding (MoU) was prepared, and  has been signed by NNPC and Schlumberger to foster teamwork in vital areas bordering on exploration and reservoir management among others.

According to an interview published in the latest edition of the monthly NNPC News bulletin, Dr. Babatunde Adeniran, Chief Operating Officer, COO Ventures, said that the Corporation is on the verge of executing an agreement with Schlumberger.

Adeniran added that partnership arrangement has been concluded with Schlumberger in four research areas commencing 2017.

The first stage he said would be exploration & Risks Assessment studies of the Nigerian Frontier Basins, which include the Upper Benue, to help the ongoing campaign in the Chad Basin.



News Agency of Nigeria (NAN) reports that COO listed other areas of collaboration to include: Wellbore Instabilities studies to assist in reducing drilling costs through prevention of stuck pipes (especially for directional drillings), improve safety and drilling performance, which also covers Formation Damage.

Dr Adeniran also noted that the Research and Development Division of the Corporation, is ready to take full advantage of the $1 billion global endowment fund for research instituted by Schlumberger.

The corporation is working towards reaching an accord with Schlumberger on Pressure Volume and Temperature (PVT) sampling and analysis. “Schlumberger initially planned to set up its own PVT laboratory in Nigeria, but discovered that NNPC R&D already has a well-equipped lab.

“They concluded then that instead of setting up theirs, they can partner with R & D. Several meetings and negotiations took place between the two parties.

“A Memorandum of Understanding (MoU) was prepared, which has already been signed by Schlumberger and NNPC is on the verge of executing its own part,’’ he said.

 Oil gains ahead of OPEC, non-OPEC cuts in January 1

Photo Credit: Thisday

Photo Credit: Thisday

By MaryMagdalyn Francis


The Us oil prices extended gains in post-Christmas trading, as OPEC and non-OPEC members are set to start curbing output in less than a week to support oil prices.

NYMEX crude for February delivery CLc1 was up 16 cents at $53.18 a barrel by 0002 GMT, after closing up 7 cents at a 17-month high on Friday.

London Brent crude for February delivery LCOc1 was yet to trade after settling up 11 cents at $55.16 a barrel on Friday. Oil markets were closed on Monday after Christmas holiday.

Oil has been supported in the past several weeks as the Organization of Petroleum Exporting Countries and non-OPEC members have agreed to lower output by almost 1.8 million barrels per day (bpd) from Jan. 1.

Libya’s oil production rose slightly to 622,000 barrels a day (bpd) on Monday, as an armed faction agreed to lift a two-year blockade on major western pipelines, the National Oil Corporation said.

It said it could add 270,000 bpd within three months.

The U.S. Department of Energy expects to begin sales of roughly 8 million barrels of sweet crude from the country’s emergency oil reserve in early to mid-January, according to a notice sent to potential bidders and seen by Reuters on Friday.

Russia’s oil exports would rise by almost 5 percent this year to 253.5 million tonnes and a “slight” increase was expected next year, Deputy Energy Minister Kirill Molodtsov said on Monday.

China’s end-November crude oil stocks fell 1.55 percent from the previous month to 29.89 million tonnes as domestic output shrank and winter demand grew, data from the official Xinhua news agency showed. Diesel inventories slid to a record low.

Algeria’s Sonatrach will drill 290 wells in 2017 in comparison with 265 in 2016, the head of the oil and gas giant’s drilling division told Reuters late on Friday.

Hedge funds boosted bullish bets on U.S. crude oil for a third week in a row to a near 2-1/2 year high, data showed on Friday, on signs that OPEC and other producers will stick to a deal to cut output.


Power Sector to Rate Distribution Companies on Safety and Payment Performance – Port Harcourt DISCO Tops on Safety Ranking

Raji-Fashola8 CHAMPION NEWSThe rampant electrocutions in the country have prompted the Minister of Power, Works and Housing, Babatunde Raji Fashola, to execute ranking criteria in order to assess the safety and payment performance of Distribution Companies (DISCOs).

The Minister gave the directive to stakeholders in the industry: Electricity Management Services (NEMSA), Nigerian Bulk Electricity Trader (NBET) and the Market Operator (TCN/MO), at the monthly Ministerial meeting which took place at the Shiroro Hydroelectric Plant, in Niger State.

A statement issued by the Director Press, Ministry of Power, Timothy Oyedeji, said the unpalatable reality of dangers inherent in the sector emanated from the issues discussed during the Electricity Industry’s meeting, which threw up concerns over the recurring incidences of electrocutions at the Eko and Abuja DISCOs.

The statement credited Fashola as saying that although the families affected by the incidence were duly compensated in “record time”, he would prefer that stringent measures were put in place to forestall future occurrences.

It further said: “He is of the opinion that they should embark on the system upgrade to reduce or totally eliminate this hazard, thereby reducing the incidence of electrocution and other related accidents,”

The Minister’s statement revealed that Port Harcourt DisCo emerged as the top category, in safety compliance for the month of May.

The Minister called on stakeholders in the electricity value chain to “take ownership of abandoned transformers and sub-stations in their domain. This he assured will help them energize their networks,” thereby being more efficient in optimizing electricity supply to households.

Next stop for the assessment would take place on the 11th of July, 2016, at the Benin Distribution Company (Benin DISCO).

Nigeria attracts $80bn China Infrastructure Investment in Oil, Gas

By Etuka Sunday

NNPC NI CHINA 3 The Nigerian National Petroleum Corporation (NNPC)  has announced an $80 billion infrastructure investment in oil and gas ‎from China.

This, the corporation disclosed was part of efforts to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.NNPC NI CHINA 9


‎NNPC in a statement said, “the Corporation has achieved its bid to bridge the infrastructure funding gaps in the Nigerian oil and gas sector. This comes in the form of a first of its kind road show in China where memorandum of understanding’s (MOU’s) worth over $80billion to be spent on investments in oil and gas infrastructure, pipelines, refineries, power, facility refurbishments and upstream has been signed with Chinese companies.”

NNPC NI CHINA 8The Honorable Minister of State for Petroleum Resources and Group Managing Director of NNPC, Dr. Ibe Kachikwu revealed this at the ongoing NNPC China Investors’ Roadshow, organized by the Corporation to attract investors in China and the Asian sub region to invest in the Nigerian Oil and Gas sector.

NNPC NI CHINA 4The Honorable Minister of State and Group Managing Director of NNPC, who is currently visiting China as a Special Envoy of the Nigerian President, is leading a team of Top Management of the Corporation and Key Industry Stakeholders, to showcase the investment opportunities which abound in the oil and gas value chain in Nigeria to the investors, with a view to attracting funding and partnerships that would turn around the sector, and place it among the best in the world.

Dr. Kachikwu, while speaking during the plenary of a special Investors’ Roundtable which had in attendance over 200 Chinese investors with key focus on the Oil and Gas Sector reiterated that the roadshow was organized as a follow up to the working visit of His Excellency, President Muhammadu Buhari to China in April, 2016.

He further commended the efforts and resolve of the President, whose steer and support in ensuring that there is a marked transformation of the oil and gas industry has inspired the management to work towards the institutionalizing of focus, accountability, commitment and transparency at the corporation.

Some of the companies that are involved include NORINCO, CINDA, CNOOC, SINOPEC/ADDAX, ICC-NDRC amongst others.

PTDF signs pact with French government on Scholars training

By Etuka Sunday

PTDF-logo‎Petroleum Technology Development Fund (PTDF) has signed a Memorandum of Understanding (MoU‎) with the French Government to help some of the Scholars studying in France.

Speaking shortly before the signing of the agreement, the Acting Executive Secretary, PTDF, Mr Aminu Ahmed Galadima‎ said that the partnership was apt considering the funding challenge facing the country.

“One major challenge we have now is funding. ‎Our funding is a derivative of the income arising from oil and gas. Now that the income profile is nose-diving, we are greatly affected. Perhaps, that is why your intervention at this time is unquantifiable,” he said.

Mr Galadima said part of the agreement was that the French government offered to provide a number of concessions to 10 MSc and 3 PhD PTDF OSS scholars.

He gave the concessions to include: ‎the exemption from payment of registration and tuition fees; free health insurance; priority access to public student residence; free visa fees and scholars to have status of ‘Scholar of French Government’.

The PTDF boss who noted that the Fund was already in strategic partnership with some multinational Universities, ‎expressed hope that the relationship would bring better bilateral foundation for bigger partnership in the future, between the two countries.
He reiterated the commitment of the Fund to putting the action plans in perspective and implementing them, assuring that there was strong team to consolidate and handle other logistics as time goes on.


Also speaking, the representative of the French Ambassador, who doubles as the Head of Corporation and Culture Affairs, French Embassy, Mr Dornon Arnold ‎said, out of the 1000 Africans students in his country, 404 are Nigerians.

Mr Arnold added that the French government is impressed with the excellent performance of Nigerians ‎studying in his country, especially the PhD students therefore pledged to support in the areas necessary.

FCT carts away 2016 NNPC Science Prize on its Quiz Competition

By Etuka Sunday

NNPC-Towers THIISDAYStudents from the Federal Capital Territory, Abuja, have won the 2016 edition of the Nigerian National Petroleum Corporation (NNPC)  Annual National Quiz Competition‎.

‎NNPC said the initiative was intended to impact positively on Nigerians, therefore, pledged to retool its channels of engagement with communities to help prepare the younger generation for leadership.

Speaking at the grand finale of the 2016 edition of the NNPC Annual National Quiz Competition, which held at the NNPC Corporate Headquarters in Abuja, the Minister of State for Petroleum Resources and Group Managing Director of NNPC, Dr. Ibe Kachikwu, said he was immensely proud of the National Quiz Competition project, as it has lived up to the objective of generating interest in science and technology among Nigerian youth.

A statement by the Group General Manager, Group Public Affairs Division, ‎Mallam Garba Deen Muhammed, said the Minister who was represented by the Group Executive Director/Chief Operating Officer, Corporate Services, Mr. Isa Inuwa, said the Corporation would continue to support the National Quiz Competition, and other community-based efforts aimed at promoting education and youth development.

Minister of State for Petroluem, Ibe KKachukwu

Minister of State for Petroluem, Ibe KKachukwu

“We would thus commit ourselves to executing many more strategic community development projects, particularly those that we reckon would rapidly improve the lives of Nigerians”, he said.

In a goodwill message, the Minister of Education, Alhaji Adamu Adamu, who was represented by the Acting Director, Technology and Science Edcation, Mrs Tina Eyanru , commended the management of NNPC for initiating and supporting the science quiz competition for the past 15 years.

He said the poor economic condition in sub-Sahara African countries was a result of poor application of science, adding that there was need to change that trajectory by encouraging the development of the transition from science to technology: which is what the Junior Engineers, Technicians and Scientists (JETS) Competition sponsored by the Ministry of Education was about.

The grand finale of the NNPC Quiz, which had the winners from the zonal level of the contest, was won by students from the Federal Capital Territory, Abuja, who clinched the first prize with 135 points.

The other winners are: Akwa Ibom which clinched the second prize with 125 points; Lagos – 110 points; Jigawa – 100 points; Abia – 90 points and Yobe – 70 points.

The contestants who represented the FCT – Master Aniagoh William; Anyacho Sopuruchukwu and Nwokolo David – would enjoy N300,000 bursary throughout their education up to the first degree level.

FAAC up by N23bn, as FG, States, LGAs share N305bn for Month of May

‎By Etuka Sunday

Minister of Finance, Kemi Adeosun

Minister of Finance, Kemi Adeosun

‎The Federation Account Allocation Committee (FAAC)‎ meeting has ended with the Federal, States and Local Governments sharing a total amount of N305.128 billion for the month of May.

The allocation was N23.628‎ higher than the previous allocation of N281.500 shared in the month of April.

‎Minister of Finance, Mrs Kemi Adeosun while briefing newsmen shortly after the meeting said, the gross statutory revenue of N237.466billion that was received for the month was higher than the N213.817billion received in the previous month by 23.649 billion.

According to her: “Crude oil production and export dropped by about 2.3 million barrels in February, 2016 due to Force Majeure declared at Forcados Terminal, Shut-in and Shut-down of pipelines at other Terminals for repairs and maintenance.

“As a result, Federation export revenue declined by $57.88 million even though the average price of Crude Oil increased from $29.02 in January to $32.26 in February, 2016.”

‎She explains that “Companies Income Tax (CIT) recorded a marginal increase even as the time for companies to file their returns is yet to fall due.

Adeosun added that: “the distributable Statutory Revenue for the month is 237.466 billion. The sum of N6.330 billion was refunded by Nigerian National Petroleum Corporation (NNPC) to the federal government.

The Minister said: “also‎, there is exchange gain of 2.546 billion which is proposed for distribution. The total revenue distributable for the current (including VAT) is N305.128 billion.”

Don’t attack Discos staff-NERC appeals to customers…Urges them to explore complaint, redress mechanism


By Etuka Sunday

NERC Acting Chairman, Dr Anthony Akah

NERC Acting Chairman, Dr Anthony Akah

The Nigerian Electricity Regulatory Commission (NERC) has urged  electricity consumers to explore its complaint and redress mechanism rather than attacking officials of electricity distribution companies (DisCos).

The Commission said the appeal was necessary because of the rising incidents of attacks on staff of electricity distribution companies even as the Commission directed the DisCos to provide meters for all maximum demand meter customers within their networks not later than the last quarter of 2016 as agreed during the meeting it with them on metering.

The Commission said that it will sanction any defaulting DisCos beginning third quarter of the year. Maximum demand electricity customers are those connected on the 11 Kv (high tension wire) and mostly with their dedicated transformers.

A statement by the Head, Public Affairs Department, NERC, Dr. Usman Abba Arabi said the directive was sequel to the rising complaints from all categories of electricity customers over estimated bills they considered irreconcilable with the available power supply in the networks

The Commission frowned at DisCos refusal to meter their maximum demand customers under the Credit Advance Payment for Metering Initiative (CAPMI).

CAPMI is one of the Commission’s initiative which permits willing electricity customer to pay for meter by advancing money to DisCo, who installs the meter within 45 days. Customer who subscribes to CAPMI is refunded his money with interest through discounted electricity bills over a period of time.

The Commission in its directives observed that most of the DisCos have refused to accept maximum demand customers under CAPMI scheme. Meanwhile, maximum demand customers are fewer in number than the other categories of customers and should have been easily dispense with by the DisCos.

In a directive signed by the acting Chairman, Dr. Anthony Akah, mni, the Commission said “any customer who approaches your DisCo for metering under CAPMI Scheme must have their meters within CAPMI stipulated timeline of 45 days.”

“The scheme remains as an option for customers but a compulsory requirement for DisCos to implement when customer offers to contribute to metering through CAPMI.”

Electricity distribution companies were further directed to ensure that customers in the Nigeria Electricity Supply Industry (NESI) are effectively managed. The directive further encouraged the DisCos to publicise CAPMI and encourage customer to subscribe to it so as to close the wide metering gap in the industry.

2013 Audit Reports: NEITI takes case to EFCC


By Etuka Sunday

NEITI LOGOA Joint Task Force has been set up by the Economic and Financial Crimes Commission (EFCC) on the recently released audit reports of the Nigeria Extractive Industries Transparency Initiative (NEITI), a ‎ statement by the Director, Communications, NEITI, ‎Orji Ogbonnaya Orji has said.

Recall, ‎Oil, Gas and Mining Stakeholders recently in Abuja called on EFCC to speedily look into the reports to force the companies indicted to remit the said amount of money into the Federation Account.

Meanwhile, NEITI in a statement said, membership of the Task Force was drawn from NEITI and the EFCC. The Task Force is to study the reports and identify areas where financial crimes have been committed against the nation.

The Chairman of the EFCC, Ibrahim Magu was quoted by the statement to have made the decision in Abuja, after receiving copies of the reports from the NEITI Executive Secretary, Waziri Adio.

Mr Magu explained that it is no longer acceptable for NEITI to publish reports and agencies, companies and individuals that have clearly committed financial crimes as disclosed by the reports are left to go without sanctions.

He said: “I have heard people say that NEITI has no teeth to bite, but today I assure you that by our renewed joint collaboration, the EFCC will provide NEITI with the required teeth to bite”.

The EFCC Chairman advised members of the Task Force to carry out the assignments with utmost diligence by developing an action plan and make recommendations for immediate action by the Commission.

Presenting the report, the NEITI Executive Secretary, Waziri Adio lamented that while NEITI has been churning out series of Reports since 2004, it is regrettable that no one has either been tried or convicted for infractions on the NEITI Act. He called on the EFCC to step in and help NEITI enforce required sanctions.

Mr Adio explained that by the NEITI–EITI process, information and data contained in the reports are based on facts voluntarily provided and signed up by the covered entities during the audit process.

He added that the recent report on oil, gas and solid minerals for the period 2013 highlighted several issues that required full scale investigations by the EFCC.

The visit to EFCC by NEITI is coming at the heels of the presentation of the reports to the Nigerian Senate at plenary. During the Senate debate on the report, a nine member committee headed by Senator Jubril Barau, Chairman Senate Committee on Petroleum (Downstream) was setup to study the report and advise the upper house on necessary legislative actions.


MDAs Power Debt: Govt must lead by example -Fashola

By Etuka Sunday

Raji-Fashola8 CHAMPION NEWSThe Minister of Power, Works and Housing, Mr Batunde Fashola has said that the various departments and agencies of government, including the Ministry of Defence, have been asked to settle the debts owed the power sector operators.

Fashola said government must lead by example therefore, expressed confidence that the debt would be cleared before the end of the year.

“We must lead by example as a government. If we ask people to pay their bills, then we must pay what we owe”, he said.

Speaking at the inaugural edition of The Podium- A Town Hall Forum organized by the Kukah Centre at Merit House, Abuja with ‎a Theme: “FIXING NIGERIA”, Fashola ‎gave the roadmap of this administration to include incremental, steady and uninterrupted power supply.

He said efforts are on by the Federal Government to increase the store of gas in various parts of the country, especially in the Eastern region and Western Axis in order to ensure supply to the gas-powered electricity generating plants across the country.

The Minister said, electricity supply across the country through the 23 out of the 26 Power Plants being powered by gas, has been affected in recent time by militants in the oil producing region of the Niger Delta who have been sabotaging the gas pipelines that convey the commodity to the Power plants located in various parts of the country.

Fashola said the success of the venture to boost electricity supply would, however, depend on Nigerians who, according to him: “must take ownership of the pipelines and secure them as a collectively owned public utility”.

The Minister who was responding to a question on what the Federal Government was doing to protect the gas pipelines, expressed dismay at the on-going vandalism of oil pipelines in the Niger Delta region, wondering why some citizens would engage themselves in destroying a public utility built for their use adding: “I don’t know of any nation which has to protect gas pipelines built in people’s interest”.

“Why should we not take it for granted that it is collectively owned“? The Minister asked, adding that unless Nigerians elevate themselves culturally to accept the fact that anything that was public utility was a matter of collective ownership and trust on every citizen and anyone who tampered with it tampered with the rest of Nigerians.

“We must find another way to ventilate our anger. It doesn’t make sense to me that government or indeed somebody else must be paying somebody to look after a facility built in his interest”, the Minister said.

He disclosed that the Power, Works and Housing Ministry was now focusing on increasing transmission of power through the Kaduna-Kano-Katsina-Calabar-Ikot Ekpene transmission line saying the line would be included among some of the transmission lines to be concluded this year.

According to him, repairs on the collapsed Ugwuanyi transmission line would be completed in August this year to add additional 1,000MW to the National Grid adding that in terms of the system collapses that had occurred, they were largely triggered off by shortage of power supply to the systems in order to avoid damage to it.

CBN collapses Exchange Rate, adopts single market structure

By Etuka Sunday

Central Bank of Nigeria Photo credit: Peoples Daily

Central Bank of Nigeria
Photo credit: Peoples Daily

The Central Bank of Nigeria (CBN) has announced new framework on Forex Market Operations in the country, making it more competitive by floating the naira.

Under this new arrangement, exchange rate is to be determined by market ‎forces as part of flexible foreign exchange regime of CBN aimed at reducing the pressure on the Naira.

Also by this arrangement ‎the Apex Bank has stopped the allocation and sale of Foreign Exchange for purposes of payment of school fees and settlement of medical bills overseas. No more preferential treatment.

The CBN Governor, ‎Mr Godwin Emefiele who announced the framework at a Press Conference in Abuja said: “having consulted widely and prepared carefully, the committee of Governors of the CBN is delighted to unveil to relevant stakeholders and the general public, the broad framework and guidelines of the Flexible Exchange Rate Inter-bank Market, which we alluded to at the end of that MPC Meeting.

‎”We all know by now that Nigeria has been dealing with the effects of three significant and simultaneous global shocks, which began around the third quarter of 2014. These include:

The over 70 percent drop in the price of crude oil, which contributes the largest share of our Foreign Exchange Reserves; Global growth slowdown and geopolitical tensions along critical trading routes in the world; and Normalization of Monetary Policy by the United States’ Federal Reserve.”

He said: “In view of these headwinds, the CBN witnessed a significant decline in our Foreign Exchange Reserves from about US$42.8 billion in January 2014 to about US$26.7 billion as of 10th June 2016. In terms of inflows, the Bank’s foreign exchange earnings have fallen from about US$3.2 billion monthly to current levels of below a billion dollars per month.

“Despite these outcomes, the demand for foreign exchange has risen significantly. For example, in 2005 when we had oil prices at about US$50 per barrel for an extended period of time, our average import bill was N148.3 billion per month. In stark contrast, our average import bill for 2015 was about N917.6 billion per month. Unfortunately, the interplay between reduced FX Supply and rising FX demand accounted for a substantial reduction in our foreign exchange reserves.”

Mr Emefiele said, “In order to avoid further depletion of the reserves, the CBN took a number of countervailing policy actions, anchored on the prioritization of the most critical needs for foreign exchange as well as maintaining stability in the exchange rate. Having allowed two adjustments from August 2014 to February 2015, we decided to manage the Naira-Dollar Exchange Rate at about N197/US$1 over the last 16 months, and then provide the available but highly limited foreign exchange to meet the following needs:

Matured Letters of Credit from Commercial Banks

Importation of Raw Materials, Plants, and Equipment,

Importation of Petroleum Products, and

Payments for School Fees, BTA, PTA, and related expenses

“Over the intervening period, we are happy to note that these policies have yielded some positive developments. In particular, we have managed to stabilize the exchange rate since February 2015, thereby creating certainty for both household and business decisions, and also underpinning the economic growth we recorded in 2015.

“We have largely eliminated speculators and rent-seekers from the Foreign Exchange Market. Our Reserves, despite having fallen, is still robust and is able to cover about 5 months of Nigeria’s imports as against the international benchmark of 3 months. Furthermore, the domestic production of items restricted from the FX market is picking up nationwide, thereby creating more jobs for many more Nigerians.

“Despite these positive outcomes, the Central Bank of Nigeria has always maintained that it would continue to monitor situations on the ground and ensure that the Bank’s policies reflect these facts and developments rather than the sentiments of any groups or sectors.

“It is in light of this principle that we now believe that the time is right to restore the automatic adjustment mechanism of the exchange rate with the re-introduction of a flexible inter-bank exchange rate market. The workings of this market will be consistent with the Bank’s objectives of enhancing efficiency and facilitating a liquid and transparent Foreign Exchange Market.

‎While highlighting its key aspects, the CBN Governor said,  “the market shall operate as a single market structure through the inter-bank/autonomous window; The Exchange Rate would be purely market-driven using the Thomson-Reuters Order Matching System as well as the Conversational Dealing Book; The CBN would participate in the Market through periodic interventions to either buy or sell FX as the need arises; To improve the dynamics of the market, we will introduce FX Primary Dealers (FXPD) who would be registered by the CBN to deal directly with the Bank for large trade sizes on a two-way quotes basis;

“These Primary Dealers shall operate with other dealers in the Inter-bank market, amongst other obligations that will be stipulated in the Foreign Exchange Primary Dealers (FXPD) Guidelines, which would also be released immediately after this Press Briefing;  There shall be no predetermined spread on FX spot transactions executed through the CBN intervention with Primary Dealers, while all FX Spot purchased by Authorized Dealers are transferable in the inter-bank FX Market;

The Forty-One (41) items classified as “Not Valid for Foreign Exchange” as detailed in a previous CBN Circular shall remain inadmissible in the Nigerian FX market;

“To enhance liquidity in the market, the CBN may also offer long-tenored FX Forwards of 6 to 12 months or any tenor to Authorized Dealers;

Sale of FX Forwards by Authorized Dealers to end-users must be trade-backed, with no predetermined spreads; The CBN shall introduce non-deliverable over-the-counter (OTC) Naira-settled Futures, with daily rates on the CBN-approved FMDQ Trading and Reporting System. This is an entirely new product in the Nigerian Foreign Exchange Market, which would help moderate volatility in the exchange rate by moving non-urgent FX demand from the Spot to the Futures market;

“The OTC FX Futures shall be in non-standardized amounts and different fixed tenors, which may be sold on any dates thereby ensuring bespoke maturity dates; Proceeds of Foreign Investment Inflows and International Money Transfers shall be purchased by Authorized Dealers at the Daily Inter-Bank Rate; and Non-oil exporters are now allowed unfettered access to their FX proceeds, which shall be sold in the Inter-bank market.”‎

He said, “In terms of timelines, the Management of the Central Bank has agreed as follows:

The detailed operational guidelines for the Flexible Foreign Exchange Market will be released immediately after this Press Briefing; the guidelines for the selection and operations of FX Primary Dealers would also be released immediately after this Press Briefing; selected FX Primary Dealers would be notified by Friday 17th June 2016. All other non-Primary Dealers would remain valid and eligible to participate in the market; Inter-bank trading under the new guidelines will begin on Monday 20th June 2016; and the tenors and rates for the OTC Naira-settled FX Futures will be announced on Monday 27th June 2016.

“In closing, let me note that the Central Bank is strongly determined to make this market as transparent, liquid, and efficient as possible. Therefore, we would neither tolerate unscrupulous behaviour nor hesitate to bring serious sanctions on offenders. The CBN expects all authorized dealers particularly to display the highest level of professionalism. We expect them to understand the spirit and letter of this transition to a market based system.

“The CBN will not allow the system to be undermined by speculators and rent-seekers. Permit me to emphasize that any attempt to breach any aspect of this new framework will be heavily sanctioned by the CBN and this may indeed result in the suspension or withdrawal of the FX dealing license of an offending Authorized dealer.

“I therefore urge market participants to assist us in ensuring that this new system enables the CBN to pursue its mandate in a more effective and efficient manner, which guarantees preservation of our scarce commonwealth, stability of our financial system, and growth of our economy to the benefit of all Nigerians,” he said.

Non-Remittance: ‎Stakeholders wants EFCC to summon NNPC, Oil Companies


By Etuka Sunday

NEITI ETUKA J2Oil, Gas and Mining Stakeholders has called on Economic and Financial Crimes Commission (EFCC) to speedily investigate the mind-boggling unremitted amount of money contained in the recently released reports by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The stake‎holders said, the investigation was necessary to force the various companies indicted by the reports to remit the same amount into the federation account considering the economic state of the country.

Recall, Nigeria joined  Extractive Industries Transparency Initiative (EITI ) in 2003 and the EITI framework requires companies to publicly declare the revenues paid to government, while the government publicly declares what it received from the companies.

However, the NEITI Audit Reports revealed that  NNPC, and other oil and gas companies failed to remit $4.4 billion and N358.3 billion to the Federation Account in 2013.

Meanwhile, there are strong indications that the said amount of money must have been partly, if not fully paid since 2013 when the reports was gathered.

NEITI ETUKA 1 JSpeaking at the Stakeholders’s Dialogue Meeting organised by NEITI ‎in Abuja, the former Country Director of ActionAid Nigeria, Dr. Otive Igbuzor said: “These are very cogent issues that can promote accountability and transparency in that sector but they are not new.

“This is the same report and issues have remained the same. Billions of Naira are made to companies and NNPC, they refused to put it into the federation account; waivers are given which were not necessary; payments are made and they were not reconciled with what is received. So, what l think that needs to be done is that first, government must display political will to deal with these issues in a comprehensive manner.

“Secondly, the offices that committed these infractions are not unknown and the audits are not speculations. They are confirmed, so government needs to move in immediately. All those money that needs to be paid into the federation account should be paid immediately.

“There are all so recommendations for further investigation. The anti- corruption agencies should do that immediately but more importantly and this is where everyone would have to come in.

“Transparency and accountability in governance in any part of the world depends on four critical elements :

  1. Internal system of control within the government
  2. Parliamentary oversight
  3. Citizens and Citizens group and
  4. The media.

If we want to have a country that we will really call our own, all hands must be on deck,” he said.

The Director, Communications, Orji Ogbonnaya Orji said, the “NEITI’s decision to convene the Stakeholders Dialogue is to afford key players in the sector such as the government, companies, the civil society, the media, policy makers, legislature and covered entities to discuss the issues raised by the reports.

“This is within the context of increasing public demands for effective use of the information and data to hold government and companies accountable.‎”

FG lost N1.208 trn revenue in 2013-NEITI Audit Report


‎…Says NNPC yet to remit N1.115trn‎ to Federation Account

By Etuka Sunday



Nigeria Extractive Industries Transparency Initiative (NEITI)‎, yesterday in its 2013 Audit Report for the Oil and Gas Industry, put the total revenue losses of the Federal Government at N1.208 trillion.

The report also revealed a total sum of N1.115 trillion as outstanding revenues from NNPC and its sub-units in 2013.

The report further revealed a sum of $599.89 million as ‎under-assessments/under-payments of petroleum profit taxes and royalties by oil and gas companies as a result of the use of different pricing methodology by the government and the companies because of the absence of a new fiscal regime.

‎Giving the breakdown, the Minister of Mines and Still Development, who doubles as the Chairman of the National Stakeholders Working Group (NSWG), which is the Board of NEITI said:

“the audit revealed that Nigeria Liquefied Natural Gas (NLNG) paid the sum of $1.289 billion as dividends, interest and loan repayment for 2013. NNPC acknowledged receipt of this amount but did not remit it to either the Federal Government or the Federation.”

According to the report, the 2013 figure brought to $12.9 billion the total NLNG payments received by NNPC between 2005 and 2013 but not remitted by NNPC to the Federal Government or the Federation.

‎On Cash Call payments on the Divested OMLS, the audit disclosed that “$536.92 million was paid in 2013 by NAPIMS for the four OMLs in NAOC JV that had already been assigned to NPDC since December 2012.

In addition, the proceeds of the Crude Oil lifted by NNPC from the said OMLs were also paid into the account of NPDC. However, NAPIMS provided evidence of refund of $389 million by NPDC in 2014, leaving an outstanding balance of $147.86 million.

According to the report:

“The refund was not paid by NAPIMS to the Federation. ‎Similarly, the audit uncovered that cash calls were paid by NAPIMS on the assets divested to NPDC from the Shell JV. Refund of $35.12million was made on OML 42, but there is no evidence of transfer to the Federation. Review of NAPIMS documents also indicated request for outstanding refunds on OML 26 ($414 and N249) and on OML 42 (N2.17bn.).”

The report underlined that the continuous allocation of 445, 000 barrels per day to refineries was not beneficial to the Federation, because the refineries were operating at a capacity of about 24%.

In order to meet the shortfall in product supply, NNPC introduced the Offshore Processing Arrangement (OPA) and Crude for Product Swap arrangement.

The audit stated that these transactions were not cost-efficient as the value of the products received minus all the costs incurred was still less than the value of the original crude.

The loss to the Federation incurred through OPA and SWAP came to $211.8 million and $306 million respectively, both totalling $518 million.

According to the audit, N1.3 trillion was processed as subsidy payments for NNPC and the independent marketers in 2013.

The report however, recommended that the Federal Government should conduct a comprehensive investigation into the divestments of ‎Federation assets by NNPC to NPDC.

It said, NNPC and its sub-units should refund outstanding payments to the Federation. Discontinue alternative importation arrangements and limit it to export of crude and import of refined products; abide by Federal Government Financial Regulations and always comply with the 90-day credit period.

It said, Government should investigate the status of NLNG dividends.

The report said, NNPC, DPR, FIRS, OAGF and CBN should prioritise fixing remedial issues identified in their operations.

BPE urges improved, efficient power supply

By Etuka Sunday

BPE ACTING DGThe Acting Director General of the Bureau of Public Enterprises (BPE), Dr. Vincent Onome Akpotaire, has advised new owners of electricity companies to work towards improved and efficient power supply in the country.


Dr. Akpotaire said, no matter their genuine efforts to invest in equipment and infrastructure, “what the Nigerian consumer is concerned with is improved and efficient power supply”.
A statement by the Head, Public Communications, BPE, Alex E. Okoh‎ said, the BPE boss who gave the advice in Benin City, Edo State when he led a BPE team on a fact finding visit to the Benin Electricity Distribution Company (BEDC), commended the company for its efforts to improve services and rebrand.

‎According to the statement, he however maintained that the efforts would come to naught if the company does not impact on the quality of life of its consumers.

”Your effort to improve services is quite impressive but rebranding is not only in colours but also in the way your operations and services impact on the quality of life of your customers”, he stated
While admonishing the company to constantly interact with its customers through Town Hall Meetings and publicity; he enjoined BEDC to also use the instrumentality of the Association of Nigerian Electricity Distributors (ANED) to enlighten its customers on a continuous basis.
He noted with excitement, the positive infrastructural transformation of the company in the last two years compared to the dilapidated infrastructure that was the lot of the company when he visited some time ago, adding that if the customers were not enlightened on the efforts being made, the spate of fracas with field staff by some communities would not abate.

He noted that the fracas the SCs were engaged in with their customers was tied to the twin issue of tariff and power supply.
The BPE helmsman decried the spate of vandalism of facilities and attack on staff of power companies across the country and stressed that these have to do “with the gaps in the value chain in terms of tariff, power supply and the willingness of customers to pay which need to be worked on.”
Earlier in her presentation, the Managing Director of BEDC, Mrs Funke Osibodu, said the company prides itself in the area of human capital development as it was constantly upgrading its staff at all levels through a Memorandum of Understanding (MoU) it signed with Elizade University for continuous training of the staff.

She said the company has 3,000 employees.
Mrs Osibodu said for improved commercial operation, BEDC has engaged a team of professionals from Kosovo through the assistance of USAID to man strategic Business Units.

“The team will creatively boost commercial activities and at the same time being sensitive to the cultural differences in Nigeria”, she added.
The MD said the BEDC was deploying a first level Grid metering monitor especially for Maximum Demand (MD) customers’ right from the office and that “there is a Complaint resolution mechanism which helps customers to assess themselves even before getting to the BEDC offices”
She decried the hostile activities of some customers resulting in physical attack on the staff; vandalism of offices and equipment as well as  the destruction of  vehicles which resulted in  the shutting down of  some stations in Auchi, in Edo state and Sapele in Delta State.

New pump price good for oil, gas industry –IPMA

By Etuka Sunday


IPMAN FUEL LOGOIndependent Marketers Association of Nigeria (IPMAN) has said the new pump price of petrol will liberalize the oil and gas industry.


IPMAN also said that the new pump price would engender competition which would likely force price reduction of the product.


The President of IPMAN Chief Obason Lawson, who stated this during an interview with newsmen in Abuja, urged Nigerians to ignore those calling for strike action against to the policy.


Lawson admitted that the masses will feel initial pain from the implementation of the policy but assured that in less than one month Nigerians will start ripping the benefits of the new policy.


“The new policy of the Federal Government that effected the change in price of PMS is a welcome development. We members of the Independent Marketers Association of Nigeria IPMAN welcome the policy because it is going to bring about total liberalisation and also engender competition in the industry. We have also put arrangement in place to import petroleum products so that we can serve our members. The policy is a good development so the issue of strike should be ignored. In fact, we are calling on all our members to go about their normal businesses and keep their petrol stations open” he said.


He also noted over 7,000 tickets of PMS worth more than N20 billion, some of which were as old as one year were tied up in the NNPC system but expressed optimism that they will be easier to be released the new policy in place.


According to the IPMAN boss, it is pertinent that the market be opened up for other stakeholders because NNPC cannot meet up with petrol supply requirements in the country.


Lawson called on Nigerians to be patient as the new policy will be beneficial to all at the end, stressing that tight as the new pump price may seem, the organization is looking forward to a gradual price decrease that will accommodate all stakeholders in the near future.


He also urged the Federal Government to release the proposed palliatives as quickly as possible to cushion the effects of the hike.

The Federal Government last Wednesday announced a new pump price of Premium Motor Spirit (PMS) which should not be above N145 per litre.


The Minister of State for Petroleum, Mr Ibe Kachikwu, said the decision was taken at the end of the stakeholders meeting presided over by Vice President Yemi Osinbajo.


He explained that with the new policy any Nigerian is free to import the product and sell at a price not above N145 per litre.


“In order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product subject to existing quality specifications and other guidelines issued by Regulatory Agencies.


“All oil marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.


“Pursuant to this, PPPRA has informed me that it will be announcing a new price band effective today, 11th May, 2016 and that the new price for PMS will not be above N145 per litre,’’ the minister said.


He said the government expected that the new policy would “lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel.


“In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector.


“It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.’’


Kachikwu said that the government shared the pains of Nigerians but, “the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues’’.

U.S. Congress passes Electrify Africa Act


The Chairman Heirs Holdings  and Founder, Tony Elumelu Foundation, Tony O. Elumelu has commended the U.S. House of Representatives for the passage of the “Electrify Africa Act”.

The Act is designed to help millions of people gain access to affordable and reliable electricity in the Sub-Saharan African countries where more than 600 million people currently lack access.

The Electrify Africa Act also codifies access to electricity in Africa as a U.S foreign policy priority, thereby preserving President Barack Obama’s Power Africa Initiative.

According to Daily post report, Mr. Elumelu through his investment company, Heirs Holdings has been in the forefront of promoting Africa’s power initiatives. In 2013, Heirs Holdings, made a commitment of $2.5 billion investment in the power sector to generate 2,000 megawatts of power, about 20% of the initial Power Africa target. Through Transcorp Power, the company currently generates 19% of the power consumer in Nigeria.

The Heirs Holding Chairman said Africa must win the energy challenge if it seeks to become an industrial power in the 21st century. “Power outages on the continent must spark power outrage. The kind of outrage that ignites the activist in us” he noted.

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