Mohammed Shosanya

An academic has identified the targeted investments in education by the Shell Petroleum Development Company (SPDC) Joint Venture as a catalyst for addressing Nigeria’s energy challenges.

Professor Anene Moneke, Director of the NNPC/SPDC/TotalEnergies/NAOC Joint Venture Centre of Excellence in Environmental Management and Green Energy (CEMAGE) and holder of the NNPC/SPDC JV Professorial Chair in Environmental Management and Control at the University of Nigeria, made the observation during a visit to SPDC’s headquarters in Port Harcourt recently.

Accompanied by Professor Charles Igwe, the university’s immediate past Vice-Chancellor, Professor Moneke emphasised the pivotal role of the Centre in developing sustainable energy solutions and commended SPDC’s commitment to fostering academic excellence and environmental sustainability, highlighting the immediate and long-term benefits for the country.

The SPDC-operated joint venture established the Centre of Excellence of in Environmental Management and Control (CEMAC), and later the Professorial Chair in Environmental Management and Control now upgraded to the NNPC/SPDC JV Centre of Excellence in Environmental Management and Green Energy (CEMAGE) to equip the next generation of Nigerian leaders with the knowledge and skills needed to tackle the nation’s energy crisis.

“The introduction of the Green Energy programme in the Centre, will further position it to play a pivotal role in proffering sustainable energy solutions,” Professor Moneke said, adding that SPDC’s commitment to fostering academic excellence and environmental sustainability will yield immediate and long-term benefits for the country.

The delegation expressed gratitude for SPDC’s decision to upgrade the Professorial Chair to the Centre of Excellence, recognising the positive impact on the university and the wider community. The Centre, established with a $1 million SPDC-funded building in 2014, will now offer postgraduate programs in Environmental Management and Green Energy, thanks to increased funding from the joint venture.

Since its inception in 2021, CEMAGE has achieved significant milestones, including the production of 22 doctorates, 37 master’s degrees, and 13 postgraduate diplomas. The Chairholder and research team have published five journal papers and conducted three critical habitat assessments for SPDC.

SPDC Director and Country Head of Corporate Relations, Igo Weli, who received the delegation emphasised the company’s commitment to developing Nigerian leadership. “Nigeria urgently needs strong leadership, and we believe academia can play a vital role in this area,” he said.

SPDC’s support for education extends beyond CEMAGE, encompassing scholarships, infrastructure development, and industry experience opportunities for students and lecturers.

SPDC’s broader support for education, including scholarships and infrastructure development, is seen as a catalyst for positive change.

Mohammed Shosanya

The Independent Petroleum Producers Group,has warned against being forced to sell crude oil to the Dangote Refinery and other local ones in Nigeria.

The group implored the Nigerian National Petroleum Company Limited to re-direct its allocated crude oil volumes to Dangote Refinery and other local refineries to mitigate the current crude supply shortage being experienced by the local refiners that is impacting local product availability in many parts of Nigeria.

Its Chairman,Abdulrazak Isa,expressed these in a letter dated August 16, 2024, and addressed to the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe.

He advised the NNPC to utilise its allocated 445,000 barrels per day intervention crude oil volume to salvage the current situation as it did in many instances in the past.

According to him,some IPPG members already owned and or were supplying crude oil to local refineries but insisted that the NNPC was in a good position to mitigate the current crude supply shortfall faced by local refiners by leveraging its statutory crude allocation for meeting local domestic consumption.

He added:“Historically, NNPC has always had an intervention crude oil volume (445kbopd) meant to satisfy the nation’s domestic consumption. This volume has always been used, under various swap mechanisms, to import refined products for domestic consumption.

“Since there is now domestic refining capacity to meet consumption, this dedicated volume should be reserved for all domestic refineries under a price hedge mechanism that can be provided by a suitable financial institution such as Afrexim Bank”

Any national production above this allocated volume should be treated strictly as export volumes,he said,adding that,aadhering to the willing buyer, willing seller framework of the international market especially since the refiners will need to export excess products that surpass domestic demand thus boosting foreign exchange earnings.

He expressed concerns over certain recent developments including the domestic crude oil refining requirements and crude oil production forecast for the second half of 2024, announced by NUPRC, as well as the request to all producing companies for their monthly quotations for crude oil supply to licensed refineries in Nigeria.

He said some of its members had received letters from the Dangote Refinery for crude supply nominations for October, and faulted the approach as bringing them under an obligation, saying it conflicted with the spirit of the willing-buyer, willing-seller framework prescribed by the Petroleum Industry Act 2021.

He explained that the objective of enhancing the country’s petroleum value chain should be done within the confines of the law and existing obligations, expressing the confidence that an amicable solution could be reached by all stakeholders without jeopardising the existing commercial agreements, economic interests and business models of each segment of the oil and gas sector.

“While we fully support and commend the efforts of Nigerian entrepreneurs to enhance domestic refining capacity, it is important that no private sector business is unduly pressured into arrangements that may effectively subsidise another within the oil and gas value chain under any guise whatsoever.

“Under this willing-buyer, willing-seller framework, it is essential for refiners to negotiate and execute long-term crude oil Sales and Purchase Agreements with producers and their marketing agents. These agreements should follow industry best practices, with typical tenures ranging from one to five years,’’ the IPPG chairman said.

He said that some of them had also received allocation letters from NUPRC for the supply of specific volumes of crude oil to the domestic market for the second half of 2024, expressing concerns about its potential implications for the economy, especially the foreign exchange earnings through royalties and taxes.

The added:“We understand that the current allocation methodology appears to be based on a matrix of production forecasts by producers, issued technical allowable rates as well as crude oil requirements of domestic refineries, rather than actual local consumption needs. This raises significant concerns as it suggests that allocations are being determined based on the demands of refiners, which may exceed what is needed for domestic consumption.

“Such an approach could lead to inefficiencies and unfairly disadvantage producers. Therefore, it is crucial that refineries with excess capacity beyond local consumption do not exploit the Domestic Crude Oil Supply Obligations to the detriment of oil producers and other stakeholders, including the Government.’’

Isa advocated the need for transparency in how the allocations to oil producers were determined and requested NUPRC to provide clear details on the allocation criteria and methodology.