By Olufemi Soneye

In the face of the challenges in the oil sector, particularly the current tightness in the supply of petrol, it has become fashionable to blame the national oil company, the Nigerian National Petroleum Company Ltd (NNPC Ltd), for everything.

Last week, it was Prof. Pat Utomi who railed and fumed at the NNPC Ltd calling it one of the most opaque and unreliable companies in the world.

Before then, The Punch had published an editorial in which it described the NNPC Ltd as a danger to Nigeria. The latest of these vitriolic attacks is by Dr. Muiz Banire, a Senior Advocate of Nigeria (SAN), and former Commissioner of Transport and Environment, Lagos State, who contended in his column in The Sun that NNPC Ltd is the black hole of Nigeria.

Considering all that is going on in the petroleum sector, it would appear justifiable to call out the NNPC Ltd as some people have been doing in recent times. But most of the diatribes have been based on sentiments that are not rooted in facts.

Railing at the NNPC Ltd without a thorough understanding of the issues that threw up the current challenges in the oil sector, as most of the commentators have been doing, will yield no good for the country.

At this critical intersection, the task for all well-meaning Nigerians should be how to find lasting solutions to the mischiefs in the oil sector and not to look for scapegoats, as Dr. Banire has done.

According to Banire, Nigeria has been experiencing fuel scarcity since 1973 on the back of fuel subsidy and the NNPC Ltd is responsible for it. The assertion that the NNPC is responsible for this state of affairs is moot. The policy of fuel subsidy is not the preserve of the NNPC.

Various administrations over the years have thought it wise to subsidize the cost of petroleum products for citizens. They came up with different methods of doing that. The role of NNPC Ltd has been to implement the policy as decided by government. At a point when the various administrations felt that the fuel subsidy policy had become a burden that should be done away with, they made it known.

NNPC Ltd, as the national oil company, implemented it. This was the case in 2012 when the nation went up in protest against the decision of government to remove fuel subsidy. The same scenario repeated itself in 2019 when the present administration came up with the policy to remove fuel subsidy. NNPC Ltd is neither responsible for the policy of fuel subsidy or its removal.

It is very unfortunate that Dr Banire would descend to the level of castigating the NNPC Ltd for the fuel subsidy debacle that has plagued Nigeria and on the basis of that label the company that has over the years patriotically borne the brunt of the fuel subsidy policy as a black hole.

His analysis fails to take into consideration the huge challenges of products smuggling, pipeline vandalism, and crude oil theft that the company contends with daily, and in spite of which it manages to keep the nation going with crude oil production and fuel supply.

Barely three months after the Federal Government announced the removal of fuel subsidy, it became difficult for both major and independent petroleum products marketers to import petrol because of the foreign exchange policy.

They could not source forex to continue to bring in petrol. Since then, NNPC Ltd has been importing the product and selling at almost half price in keeping with the provisions of the Petroleum Industry Act (PIA) which designates it as the fuel supplier of last resort. Yes, there have been supply hiccups here and there because of the financial constraints imposed by the transaction.

Just imagine the hardship the nation would have suffered if NNPC Ltd was not there to play the role of supplier of last resort! NNPC Ltd is the reason Nigerians continue to enjoy lower pump price for petrol than they would ordinarily pay for the product. How then does such a company become a black hole?

For Banire, NNPC Ltd is responsible for everything that is wrong in the oil sector. He even blames smuggling and the unauthorized sale of petroleum products to street urchins who in turn trade it in the black market in jerrycans on the NNPC Ltd. But does he have evidence that the unpatriotic marketers who divert petroleum products meant for local consumption to neighbouring countries are staff members or representatives of the NNPC Ltd?

Does he have any shred of evidence that the boys who sell fuel in the black market in jerrycans source their products from NNPC Retail Ltd.’s stations? The least one would expect from a lawyer of Banire’s standing is a fact-based and not speculative commentary.

The NNPC Ltd has turned a corner since 2018 when it began to prepare for the enactment of the Petroleum Industry Act, which was eventually passed into law in 2021.

Apart from deepening its commitment to accountability and transparency by regularly publishing its audited annual financial statements, it has become a profitable company with undisputable growth trajectory.

It recorded an unprecedented N3.29 trillion profit in its recently released 2023 audited financial report. But this fact is conveniently lost on Dr. Banire who insists that he has not seen any difference between NNPC as corporation and the commercially focused NNPC Ltd that was incorporated in 2021.

Fortunately, it does not take Banire to see or believe that NNPC Ltd, as presently constituted, has broken away from its debilitating past for it to be true. He is at home with the legal maxim: “Res Ipsa Loquitur”, meaning the facts speak for themselves.

While one cannot dissuade people like Dr. Banire from criticizing the NNPC Ltd, they must refrain from standing facts on their heads all because they want to be populist or be in the good books of the public.

Besides,the Banires of this world should also not be intentionally mischievous in their assertion that the NNPC Limited is exercising an overbearing influence on the regulators. One expects that given the level of their educational accomplishments, they should have the capacity to research very well into the subject matters of their editorial interventions so that they do not argue, assert and progress in error(s).

In the corollary, it is either Banire is mischievous or ignorant about the assertion he made in his write-up that the NNPC influences the NUPRC and the NMDPRA who are the two independent regulators. If he lacks a clear knowledge of the workings of the sector, he should be humble enough to seek clarifications so he could be well informed.

NNPC Limited is an operator-with a number of refineries under its purview. The Port Harcourt refinery will soon take off. As a matter of fact, the refineries under the NNPC are operators and are therefore subject to the regulatory framework and regulations set out by the NMDPRA.

The operator(s) cannot, therefore, exercise overbearing influence on the regulators. This is commonsensically impossible. Pure and simple.

Soneye,is the Chief Corporate Communications Officer of the NNPC Ltd

Mohammed Shosanya

Devakumar Edwin,Vice President, Dangote Industries Limited,says Marketers of petroleum products in Nigeria have reportedly written to President Bola Tinubu to complain that the drop in price of Dangote Refinery’s diesel to N900 per litre, is downwardly affecting their businesses.

“Petroleum product marketers in Nigeria have written to President Bola Tinubu to complain that the refinery local prices which have dropped from N1,200 to N1,000 and now N900 per litre are impacting their businesses negatively,” he said at a Twitter Spaces session organized by Nairametrics.

He spoke on some of the challenges facing the Dangote Refinery and its impact on Nigeria’s fuel supply and prices.

He said,the refinery, located in the Lekki Free Zone near Lagos, struggles to sell about 29 tankers of diesel per day due to low patronage from local petroleum product importers.

He said:“As a result of this poor local patronage, the refinery exports most of its diesel and aviation fuel”

He had earlier said Dangote Refinery products would be exported if the Nigerian National Petroleum Company Limited and other petroleum dealers in the country refuse to patronise it.

He said:“We have been exporting aviation fuel, we have been producing kerosene, we have been producing diesel, but yesterday, we started the production of PMS. So, that was the last stage. The only thing now left out is petrochemicals.”

“So, the good news for the country is we have started producing PMS from our refinery”.

He spoke on whether the petrol would be sold locally,saying:“Well, I explained how there has been a kind of a blockade from lifting our products within the country. The traders have been trying to block (it), and so now we have been exporting our petroleum products. PMS, we are ready to pump in as much as possible to the country.

“But if the traders or NNPC are not buying the product, obviously, we will end up exporting the PMS as we are doing with the aviation jet and diesel,” he said.

He expressed surprise that the company started facing different challenges it never expected when the refinery was set to commence operations.

Edwin recalled that the philosophy initially was to add value to the raw materials available in the country, regretting that Nigeria is still exporting crude and importing refined petroleum products after over three decades.

“The philosophy is to take the crude, and instead of exporting the crude, refine it, add value; export the finished products, and supply the finished products locally. But unfortunately for us, we started facing challenges with the crude supply.

“What is happening today? We are struggling to get the crude. We are now importing the crude from the US, we are importing from Brazil, and from other parts of the world. So, the whole philosophy has gone upside down. After all these decades, we are exporting crude, importing products,” he added.

“The same thing is continuing. We are not getting enough crude allocation, and the crude is still being exported. We are forced to import crude from outside. Yes, we are getting some crude locally, but it’s not adequate.”

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Wednesday refuted claims that it has approved Shell International Plc’s $1.3 billion sale of its onshore assets to Renaissance Consortium.

A signed by Mrs. Olaide Shonola, Head of Public Affairs and Corporate Communication, emphasized that the information published in Businessday on September 11, 2024, is incorrect and did not originate from the Commission.

The agency confirmed its commitment to transparency and stated that it will communicate its official stance on the transaction at the appropriate time.

It urged stakeholders and the public to disregard the misleading publication, which the Commission labeled as baseless.

This clarification was sequel to ongoing discussions regarding Shell’s divestment from its Nigerian onshore operations, which has faced scrutiny due to environmental concerns and legal disputes.

Shell had earlier announced plans to sell its assets in the Niger Delta to focus on deepwater and gas investments, but the approval process remains pending, awaiting the final consent of President Bola Tinubu, who also serves as the Minister of Petroleum Resources.

Mohammed Shosanya

The Nigerian National Petroleum Company Limited and its Joint Venture (JV) partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the Petroleum Industry Act terms.

This in line with the Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms.

Under the new PIA regime, all existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) would be automatically converted to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon their expiration.

During a brief ceremony held at the NNPC Towers on Monday, the two partners signed documents on the conversion of five (5) OMLs into four (4) PPLs and twenty-six (26) PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence,Olufemi Soneye
Chief Corporate Communications Officer,NNPC Ltd said in a statement on Monday.

Speaking at the occasion, Group CEO NNPC Ltd, Mr. Mele Kyari, described CNL as one of the most reliable partners for the NNPC Ltd. “Over the years, Chevron has been a partner of choice that has not contemplated completely divesting/exiting (oil production in) the shallow water and we are proud of them,” he added.

He assured CNL that NNPC Ltd would sustain its partnership with the JV partner so as to create more value for both parties and expand Nigeria’s footprints in the domestic and export gas markets.

He lauded the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its exemplary role in midwifing the conversion.

The Director, Deepwater and Production Sharing Contract (PSC) of CNL, Mrs. Michelle Pflueger who stressed the significance of the conversion for both companies, affirmed CNL’s long-standing commitment to the assets.

Also speaking, NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, highlighted the advantages of the PIA terms over the previous PPT terms, noting that the conversion was a strategic move towards the successful implementation of the PIA.

In his remarks, NNPC Ltd’s Chief Upstream Investment Officer, Mr. Bala Wunti, noted that the assets conversion is expected to significantly boost crude oil production, with the two partners focusing on attaining the 165,000 barrels of oil per day (bopd) production target by year-end 2024.

He emphasized the continued importance of CNL’s operational philosophy in maintaining network stability and facilitating gas supply especially to the domestic market.

Mohammed Shosanya

The Nigerian National Petroleum Company NNPC Limited,has faulted Muslim Rights Concern, MURIC’s claim that recent changes to the pump price of Premium Motor Spirit (PMS) will prevent the Dangote Refinery from offering lower prices and that NNPC Ltd has become the sole offtaker of all products from the refinery.

In a statement signed by Olufemi Soneye, the Chief Corporate Communications Officer, NNPC,noted that the pricing of petroleum products from any refinery, is determined by global market forces, and recent changes in PMS prices have no impact on the DRL or any other domestic refinery’s access to the Nigerian market.

“The attention of the NNPC Ltd has been drawn to a press release by the Muslim Rights Concern, MURIC, which claims that the Dangote Refinery Limited (DRL) is being undermined by actions of the Nigerian National Petroleum Company Limited (NNPC Ltd).

“Specifically, MURIC asserts that recent changes to the pump price of Premium Motor Spirit (PMS) will prevent the Dangote Refinery from offering lower prices and that NNPC Ltd has become the sole offtaker of all products from the refinery.

“To set the records straight, NNPC Ltd wishes to further state as follows:

“The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd (DRL), is determined by global market forces. The recent changes in PMS prices have no impact on the DRL or any other domestic refinery’s access to the Nigerian market. In fact, if current prices are perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.

“Furthermore, we emphasize that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The NNPC Ltd will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.

” The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products. NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole offtaker does not arise.

“The NNPC Ltd cannot undermine a business in which it holds a billion dollar stake.

“As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and has the potential to incite ordinary Nigerians against the NNPC Ltd”,the statement reads.

Mohammed Shosanya

Energy experts have advocated the need for increased sustainable practices in the global oil and gas industry.

They said,reducing emissions does not necessitate abandoning oil and gas but rather requires the adoption of cleaner technologies and sustainable practices.

They disclosed this at webinar titled,“Transitioning Away from Emissions, not Oil and Gas,” organized by the Nigerian Institution of Petroleum Engineers (NiPeTE) and the Lagos Chamber of Commerce and Industry Professional Practice Group (LCCI PPG), through online discussions.

They discussed the role of oil and gas in global emissions and also profers solutions it can be addressed.

Speaking,Dr Nuhu Habib, former Executive Commissioner for Development and Production at the Nigerian Upstream Petroleum Regulatory Commission,(NUPRC),noted that while oil and gas production contributes to emissions, it is not the largest source of global greenhouse gases.

According to him,oil and gas will remain key drivers of the global economy for at least the next fifty years.

He said oil and gas account for only about 15% of industrial emissions, emphasizing that the real challenge lies in addressing the broader industrial activities that contribute to greenhouse gases.

He advocated the need for a focus on reducing emissions overall rather than solely targeting oil and gas production, which could negatively impact the global economy.

He also criticised the incomplete financial commitments under the Paris Agreement to support African nations in climate change mitigation, stressing the importance of genuine international collaboration and commitment.

Mr Gabriel Idahosa, President and Chairman of the Council at LCCI, highlighted the significant emissions from gas flaring and other petroleum activities in Nigeria, which exacerbate climate change and affect public health.

He called for innovative approaches to decarbonize the economy while maintaining the growth and stability provided by oil and gas resources.

He noted that the oil and gas sector is vital to Nigeria’s economy, accounting for about 90% of export revenues and approximately 60% of government revenue.

According to him,Nigeria’s CO2 emissions reached around 120 million tons in 2023, underscoring the environmental impact of its energy sector.

He stressed the need for a robust policy and regulatory environment to support this transition.

Recognizing the Petroleum Industry Act as a positive step, Idahosa advocated for additional measures such as carbon pricing, tax incentives, and stricter environmental regulations to promote clean technologies and sustainable practices.

Engr. Prisca Kanebi, the National Chairman of NiPeTE, emphasized the importance of balancing global greenhouse gas reduction goals with Nigeria’s development needs.

Dr Mohammed Malami, Planning and Commercial Research Officer at Gas and Power Investment Service, NNPC Ltd., called for the strategic integration of low-carbon technologies and improved operational efficiency to reduce emissions without eliminating oil and gas entirely.

.Says Scarcity’ll Ease Next Week

Mohammed Shosanya

The Nigerian National Petroleum Company Limited (NNPC Ltd) has blamed the current hike in petrol price on foreign exchange in the country.

The company stated that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS), which are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA).

Speaking on TVC News’ “Journalists’ Hangout” show on Thursday, the Executive Vice President of Downstream, NNPC Ltd, Mr. Adedapo Segun explained that the current fuel scarcity was expected to “subside in a few days as more stations recalibrate and begin selling PMS.”

A statement signed by Olufemi Soneye,Chief Corporate Communications Officer,NNPC Ltd,quoted him as saying that,Section 205 of the PIA, which established NNPC Ltd, stipulated that petroleum prices were determined by unrestricted free market forces.

According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

Speaking on the commencement of lifting PMS from the Dangote Refinery, Segun said that the NNPC Ltd was awaiting the September 15th timeline provided by the refinery.

Segun, who said no right-thinking individual would be comfortable with the current fuel scarcity, added that the NNPC Ltd had nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”

He said: “We are also engaging relevant authorities to ensure products diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations.”

Mohammed Shosanya

Wunmi Iledare,a Professor Emeritus in Petroleum Economics and Policy Research at the Centre For Energy Studies, Louisiana,has advised President Bola Tinubu to appoint a substantive Petroleum Minister to enable him relinquish his hold on the Ministry.

He spoke ahead of a special Independence Edition, the once-in-a-month interview discourse.

Iledare,a former President of the United States Association for Energy Economics,also lamented that there is too much lack of transparency within the oil sector in Nigeria,adding that successive Nigerian governments over the years have mismanaged the country’s natural endowment.

He said:” The first thing to do is to ask President Tinubu to surrender his ministerial portfolio as the Minister overseeing the Petroleum Ministry.

“Tinubu by virtue of his office should be too busy to correctly superintend over that vital sector. What we have now are surrogates doing trial and error in the petroleum sector. It is absurd and ridiculous. It is just like saying Tinubu is the Finance Minister. He should relinquish that role so as to allow transparency in the industry and in particular for effectiveness.”

According to him, there was need for the Federal Government take its hands off the Nigerian National Petroleum Corporation Limited(NNPCL).

He said:”They should stop expending money outside the budgetary system. Let them govern by the principles of the Petroleum Industry Act.

“Government should stop looking at the NNPCL as their cashcrow. You cannot be disobeying the principles of economy and think it will not come after you. Things certainly can be done better if we must come out of this quagmire”.

Mohammed Shosanya

The leadership of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has said that it will protect the 650,000bpd Dangote Petrol Refinery against economic saboteurs in the country.

NUPENG’s General Secretary, Comrade Afolabi Olawale,who gave the assurance in a statement released on Wednesday,also pledged that his union will collaborate with Dangote Refinery and Petrochemical Company to ensure the growth and sustainability of the oil and gas industry.

He described the commencement of production of Gasoline, otherwise known as Premium Motor Spirit (PMS) by the Dangote Refinery and Petrochemical Company as historic and a landmark achievement for the nation.

Congratulating the President and Chief Executive Officer of Dangote Group, Aliko Dangote and the Federal Government,he said the current development has been long anticipated and awaited with bated breath and prayers not only by Nigerians but by the entire Continent of Africa.

He said NUPENG is very proud of Alhaji Aliko Dangote, describing him as a man with uncommon courage and determination. You have dared to dream and thread where no mortal has ever done.

According to him,this remarkable achievement at the world’s largest single-train petroleum refinery and petrochemical plant is a testament to Dangote’s unwavering commitment, innovation, and excellence in the energy sector.

“We recognize the immense efforts and dedication that have gone into making this vision a reality. The successful production of Premium Motor Spirit (PMS) at this state of the-art facility not only marks a significant milestone for Dangote Refinery but also represents a monumental step forward for Nigeria’s energy independence and economic growth.

“Alhaji Aliko Dangote, your visionary leadership and relentless pursuit of excellence have been instrumental in achieving this feat. Your contributions to the industrialization and economic development of Africa are truly commendable, and we are proud to witness the positive impact of your endeavours on our nation.

“As a union dedicated to the welfare and advancement of workers in the petroleum and natural gas industry, NUPENG is excited about the opportunities this development will bring in terms of employment for Nigerians, socioeconomic prosperity and monumental growth of our dear country.

“We are also not unmindful of the plots and schemes of sworn enemies of the masses and nation’s economic saboteurs to derail the wheels of progress of this wonderful trail blazing train, but as NUPENG, we pledge to make available all our might and resources to defend and protect this beautiful African pride.

Mohammed Shosanya

Capt. Emmanuel Iheanacho, Chairman of Integrated Oil and Gas Limited,has emphasised the indispensable role of depot owners in Nigeria’s fuel supply chain, particularly in the context of the recent delivery of Dangote Premium Motor Spirit (PMS).

He spoke in a reaction to a statement made by the billionaire and Chairman of FBN Holdings, Mr Femi Otedola,who suggested that Nigerian depot owners should dismantle their facilities and sell them as scrap, given the arrival of Dangote’s PMS.

Iheanacho,a member of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), clarified that petroleum products storage depots are a vital component of the fuel supply chain, complementing primary fuel sources.

He emphasized that without the depots, other elements in the supply chain would struggle to deliver fuel to consumers.

He added:”While there might be competitive elements in the market, collaboration and cooperation are essential for ensuring a stable fuel supply in Nigeria.

“Petroleum depots are not a replacement for primary fuel sources but are crucial for storing and distributing products to meet demand,”Iheanacho said.

He added that depots play an important role in distribution, particularly given Nigeria’s dispersed infrastructure.

Iheanacho also noted that while private depots may compete with the Nigerian National Petroleum Corporation Ltd. (NNPC) in terms of storage and distribution, they are not necessarily in direct competition with the NNPC or the Dangote Refinery.

“Instead, these depots often work in conjunction with both to support a reliable fuel supply chain.Private depots may compete with petroleum importers for market share by offering essential storage and distribution services.

“Ultimately, competition aims to balance market prices.However, depots are key partners in supporting the entire supply chain, including NNPC and Dangote,” he added.