Mohammed Shosanya

The Managing Director and Chief Executive Officer of Nigeria LNG Limited (NLNG), Dr. Philip Mshelbila, has said that Nigeria must be deliberate in its desire to take opportunities offered by the energy transition, the recognition of gas as a transition fuel and the quest for clean energy to increase its gas investment and harvest the gains from gas.

He said this during the visit of the Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, to the NLNG plant on Bonny Island, Rivers State.

The Minister was received by Dr. Mshelbila; Nnamdi Anowi, General Manager, Production; Andy Odeh, General Manager, External Relations and Sustainable Development and other management staff.

Briefing the Minister on NLNG’s operations and business, Dr. Mshelbila emphasized the need to overcome the challenges within Nigeria’s energy sector.

He stated that failure to address the root causes of these issues would perpetuate the country’s struggle with energy poverty and result in a significant loss of revenue from the monetisation of valuable resources.

He stated further that a pivotal starting point for remedying these industry challenges lies in a concentrated effort on the gas sector.

He added:“As we embark on the journey to complete Train 7, we are on the precipice of achieving a remarkable milestone – a capacity of 30 Million Tonnes Per Annum (MTPA). This accomplishment will not only position us as one of the largest single-site operations globally but potentially among the top three worldwide in terms of such capacity at a single site. It is an achievement that elevates Nigeria’s standing, placing us among the top six nations in this crucial industry.

“However, the world is evolving at an unprecedented pace, and recent events, such as the Russian/Ukraine conflict, have ushered in a wave of new developments in the LNG sector. This surge in activity underscores the robust demand for liquefied natural gas, a demand recognized by nations worldwide as integral to the global energy transition. Considering these dynamic changes, our position in the rankings is likely to shift rapidly, as other countries make substantial investments in LNG production. This is why we believe it is important for us to conclude Train 7 and begin to look beyond that for further expansion.

“Today, the biggest challenge we have, one that poses a threat not only to our existing operations but also to our expansion plans, is feed gas supply. Trains 1 to 6 currently operate at roughly half their potential capacity, a situation that has persisted for some time. The main issue behind the challenge is crude oil theft which affects associated gas supply.

“The plant is half-full, not because we don’t have the capacity but because the feed gas is not there. We have aspiration for Train 8 but we cannot progress that work because we have no line of sight as to where that gas will come from. We believe that the gas can only come from deep water gas but the terms for that must be addressed. At present, the Production Sharing Contracts (PSCs) that govern deep-water exploration do not offer commercially viable terms for producers.

“Our commitment to harnessing the immense potential of natural gas will not only restore Nigeria’s reputation as a major energy powerhouse but also propel us towards a cleaner, greener future. With innovation, collaboration by a wide array of stakeholders, including the government, and unwavering determination, we can shape the energy landscape of tomorrow, driving economic prosperity, creating jobs, and mitigating environmental challenges through gas,” he said.,” he said.

In his response,Hon. Ekpo, said the Federal Government will continue to encourage engagements amongst stakeholders to resolve gas supply and security issues and restore plans to compete with peers in the world. He stated that NLNG stand as a leading light to the Nigeria’s quest to become an energy-efficient country where clean energy, including gas, utilised.

He stated that all hands must be on deck to stop the loss of revenue in the sector and missed opportunities, adding that the Federal Government is engaging with investors to tap into the huge gas reserves in Nigeria.

“The development of gas is something we should pursue vigorously. The present administration will do everything possible to address the issues. I am glad that the stakeholders in the sector, like NLNG, are not laid back. They are constantly seeking ways out of this issue. NLNG needs all the necessary encourage to expand. It is for the good of this country. We must be quick to make these gains in development for the benefit of our future generations,” he stated.

Mohammed Shosanya

The Nigerian National Petroleum Company, NNPC Limited would have been long bankrupt if the federal government didn’t remove fuel subsidy, the Group Chief Executive Officer of the NNPC Limited,Mallam Mele Kyari has said.

Kyari spoke on Monday while addressing the theme: ‘Petroleum Downstream Deregulation and Gas Utilization’ for a sustainability energy future in Nigeria’, at the opening ceremony of the PENGASSAN Energy and Labour Summit, tagged PEALS 2023, holding in Abuja.

According to him,the law providing for subsidy effectively ended in 2022, but even though the National Assembly made extra budgetary provisions to support till June, nothing was paid forcing NNPC Limited to shoulder the burden single handedly to extent that it was fast heading towards bankruptcy before President Tinubu intervened.

He added:”The law was very clear, that starting from the 17 of February, 2022 there can be no possibility of having subsidy on PMS. And that the market should determine the price, that the state should take every step possible to protect the consumers from the issues come with market price of petroleum products.

“But the last National Assembly in its wisdom made provision for subsidy to Carter from February 2022, to 2023 in the budget, not a single Kobo was paid into into NNPC for the purpose.

“And I can tell that since 2022 when that provision was made until the 29th of May, 2023, not a single Naira was paid to the NNPC Limited as cost of subsidy. That means we were carrying it entirely on the balance sheet of the NNPC”.

“The value of subsidy was seen exceeding N400 billion in a month, the NNPC Limited’s fiscal obligations could not cover subsidy, so we were heading towards what you could technically call the bankruptcy of the NNPC.

“By end of June 2023 we would have been in negative cash flow. NNPC would have been bankrupt if that decision was not taken by the President”.

According to him, even though there was absence of credible data for fuel consumption in the country, evacuation records are well known and the realities is that volume evacuation from the depots declined by 30 per cent as a result of the removal of fuel subsidy.

He noted that subsidy had done nothing but stiffles the growth of the downstream sector of the petroleum industry in the country.

“If there was one thing that stiffles growth of the downstream sector of the petroleum industry it is the existence of subsidy. That is the realities. As at today, there are close to 25 licenses to create refineries, build and operate refineries but nobody could take because as long as you do not have certainty around pricing and crude to pay for that differences no one can take.

“And as long as you have arbitrage, once there is a price differential between one location and another that is substantial, there is no way you can control fraud of all forms. It is impossible. And people will do everything possible to load products between locations. Whatever it is whether it is drugs or petroleum products. People will cut corners as long as market forces determine the price”.

He further disclosed works are underway to ensure that in 2024, Nigeria will become a net exporter of petroleum products.

Comrade Festus Osifo, PENGASSAN President,in his remarks noted that the theme of the (PEALS) 2023 summit: “Petroleum Downstream Deregulation and Gas Utilization for a Sustainable Energy Future in Nigeria” was carefully chosen given the multifaceted challenges and opportunities inherent in the nation’s energy sector vis a vis the global energy demand, to illuminate the path towards a sustainable energy future for Nigeria and by extension Nigerians.

According to Osifo, over the next three days, PENGASSAN will engage in enlightening discussions, sharing nsights, and formulating strategies to address critical issues such as divestment, PMS subsidy removal, and the place/role of the ever-ready Nigeria workers in the oil and gas industry and its concomitant value chains.

“We are witnessing a significant shift in the landscape of the energy sector in the country, marked by the divestment actions of companies such as Mobil Producing Nigeria, Nigeria Agip Company, SPDC, and others, which has impacted the presence of international oil and gas companies in Nigeria”.

The PENGASSAN President said the removal of subsidy and the current state of the nation’s refineries are of paramount importance which are touching the lives of every Nigerians.

Mohammed Shosanya

The Nigerian Upstream Regulatory Commission (NUPRC) has launched Advanced Cargo Declaration regime in upstream petroleum operations to arrest oil robbery and curtail export of stolen crude oil in Nigeria.

It also disclosed plans to reactivate shut-in wells as part of initiatives to increase oil and gas production in the country.

Mr Gbenga Komolafe, the Commission Chief Executive of NUPRC, announced this at the NAEC Annual International Strategic Conference 2023, organised by the Association of Energy Correspondents of Nigeria (NAEC) on in Lagos.

Komolafe,who was represented by Mr Abel Nsa, Head of the National Oil and Gas Excellence Centre (NOGEC) Department, NUPRC, said the initiative aims at ensuring that crude oil and gas cargoes exported from Nigeria have a unique identifier that confirms all documentation as regards the exported consignment.

‘‘This implies that any cargo without the unique identifier becomes tagged as illegitimate. “This, by no small measure, enhances transparency in our export operations.

He added that NUPRC had deployed key resources to the Special Investigative Unit of the Commission to forestall any cases of sharp practices by operators in the sector.

‘‘Over the next few months, we are positive that we shall record a marked increase in our national oil and gas production volumes.

“Quick-win strategies such as our aggressive drive to reactivate shut-in and declining wells will boost production prior to the onset of more long-term initiatives like operations from the new Marginal Field awardees.

Besides,the commission is working alongside security operatives to bring a halt to the menace of crude oil theft, which has over the years contributed to a huge loss of production,” he said.

He added that the agency had begun the implementation of the Drill or Drop Provision with a comprehensive review of assets which had been undeveloped by operators.

Such assets, he said, would be placed in a basket and then offered to willing and qualified investors with the capacity to explore, develop and produce the block(s) or field(s) in a timely, efficient, safe, and environmentally friendly manner.

He stated that the ongoing mini bid round for seven Deep Offshore Petroleum Prospecting Licences (PPLs) would boost the nation’s reserves as well as bring about anticipated benefits to the nation and other stakeholders.

On reduction in unit cost per barrel and revenue, he explained that the Commission is committed to ensuring a significant reduction in the cost of doing business in the upstream petroleum industry.

‘‘Following an in-depth comparative analysis between the Unit Operating Cost (UOC) in Nigeria and those obtainable in other climes.

“We have commenced the development of cost studies and benchmarks to ensure an improvement in the cost efficiency of our upstream petroleum operations, in accordance with Section 8 of the Petroleum Industry Act 2021.

The NUPRC has also began a review of all Crude Handling Agreements (CHA) with a view to entrenching openness and competitiveness, thereby reducing the cost of production while increasing government revenue from the sector

It is noteworthy that in the year 2022, using the strategies listed above, the Commission outperformed its revenue collection target by 18.3 per cent,’’

Komolafe maintained that the Commission had stepped up efforts toward transparency in the sector and that transparency in hydrocarbon accounting was essential in ensuring maximum value derivation by the government and stakeholders.

Mohammed Shosanya

Shell Petroleum Development Company (SPDC) and Shell Nigeria Exploration and Production Company (SNEPCO ) paid $1.36 billion as corporate taxes and royalties to the Federal Government of Nigeria in 2022.

Announcing this in Shell Briefing Note 2023,obtained by Premium News,the two companies paid $79.77 million to the Niger Delta Development Commission (NDDC)while contracts worth $ 1.9 billion were awarded to Nigerian registered contractors.

The companies committed to supporting AllOn to the tune of $200 million as a renewable impact investment during the period in view.

These companies also provided funds for All On for the expansion of DART program. There was another commitment of $23 million for investment in renewable energy to be paid to AllOn Energy Company.

On the investment in the education sector, 3,500 University grants were disbursed and 990 cradle-to-career scholarship grants were awarded by companies including Shell Nigeria Gas (SNG) since 2016.

Besides,the companies also assisted Lagos and Bayelsa States with educational infrastructure projects worth about $15 million.

The companies announced that,over 92, 000 people have so far benefited from the company’s Community Health Insurance scheme since 2010.

The direct and social investment made by both SPDC, SNEPCO, and SNG in 2022 was put at $ 34 million just as $106 million was disbursed by SPDC JV to communities through the Global Memorandum of Understanding (GMOUs) since 2017.

There were 220 Nigerian beneficiaries of the Shell Live Wire entrepreneurship program. There are 2,500 employees in shell companies, 97 percent of them are Nigerian nationals. In addition to this, about 10,000 contractors are supporting the operations of these companies.

Shell donated $1 million to support victims of the devastating flood that occurred in 2022.