Ekpo Urges Contractors  To Complete OB3 Gas Pipeline Project On December

Mohammed Shosanya

Minister of State Petroleum Resources (Gas), Mr. Ekperikpe Ekpo, has implored contractors handling the Obrikom, Obiafo and Oben (OB3) gas pipeline project to ensure its completion by December this year.

He stated this on Thursday during a tour of the 48 × 1.8km gas pipeline project designed to run across the River Niger conveying gas from the South-South and South-East to the South West and the Ajaokuta, Kano and Kaduna (AKK.) Project, among others.

Ekpo was accompanied on the tour by the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, Group CEO of the NNPL, Mr. Mele Kyari, and other top officials of the Ministry of Petroleum Resources, NNPCL and regulatory agencies.

A statement by his Special Adviser on Media and Communications to the Minister of State Petroleum Resources (Gas),Louis Ibah,quoted
the minister as telling officials of Enikkom and HDD Thailand, who are the joint venture contractors handling the project, that meeting the December 2023 deadline would greatly assist the Federal Government’s aspiration of making gas available to all nooks and cranny of the country as well as addressing some of the challenges associated with the removal of fuel subsidy.

He said: “Nigerians are waiting for this project. Mr. President (His Excellency Bola Tinubu) is passionate about gasifying Nigeria, and this is also my mission as a minister. The withdrawal of fuel subsidy has been causing problems in the country, but if we get this project right the pressure will come down.

” When that is done it will go a long way in easing doing business in Nigeria and forex will come into the country. So I implore you all to be intentional, committed and passionate about this project completion deadline.”
Lokpobiri commended the contractors and those involved in the project. He described the project as a game changer saying its inauguration will boost the quest to provide enough gas for domestic use”

Kyari,who spoke earlier had assured that the project would be completed by the end of the year as most of the initial challenges had been identified and surmounted by the contractors.

Oando Partners Government  On Sustainable Transport Initiative In Lagos

With over 20 million residents, Lagos is the most populous city in Africa and among the fastest-growing megacities in the world. Over the last decade, the number of vehicles on Lagos roads has quadrupled. On average, most of these vehicles are over 15 years old, using old emission technologies and fuel with high sulfur levels.

The upward trajectory in vehicle numbers poses a significant challenge as transportation has been identified as a key contributing sector globally to annual CO2 emissions, accounting for close to a third of emissions. This figure is significantly higher in Nigeria where transportation contributes approximately 60% in carbon emissions. The World Bank estimates that at least 30,000 people die annually in Lagos due to pollution.

Oando recognizes that one of the fastest routes to net zero will be to take transportation and associated pollution out of the equation. Against this backdrop and in support of accelerating Nigeria’s race to achieve net zero by 2060 is the ‘cleaning up’ of the country’s transport system through the deployment of sustainable transport solutions.

Oando Clean Energy’s (OCEL) agenda is to invest in climate-friendly and bankable energy solutions across the African continent, starting in its home country Nigeria.

Currently, Lagos State’s mass transit system has over 1,000 internal combustion engine buses releasing an estimated 44,000kg of CO2 daily.

OCEL’s strategic approach is to stimulate Electric Vehicle (EV) adoption in Nigeria and build the next downstream sector for mobility; one that will dispense electricity instead of petrol or diesel via transitioning the country’s current combustion engine mass transport vehicles to EVs.

To this end OCEL signed a Memorandum of Understanding (MoU) with the Lagos Metropolitan Area Transport Authority (LAMATA), the Lagos State Government Agency tasked with planning, implementing, regulating, and franchising sustainable integrated public transport in Lagos.

The MoU establishes a partnership between OCEL and Lagos State in her journey to becoming a sustainable city via the rollout of electric mass transit buses, supporting charging infrastructure and service centers (EV Infrastructure Ecosystem).

This landmark initiative and a first for Lagos State demonstrates Oando’s dedication to the Ten Principles of the United Nations Global Compact, which the company has participated in since 2009.

It also reflects their commitment to the Sustainable Development Goals (SDGs), particularly SDG 7 – Affordable and Clean Energy, SDG 11 – Sustainable Cities and Communities, and Goal 13 – Climate Action.

President of OCEL, Dr. Ainojie ‘Alex’ Irune acknowledges that the initiative is in recognition of the urgent need for electric vehicles to address transportation’s circa 60% contribution to Nigeria’s GHG emissions.

“This is an opportunity for us to revolutionize mobility in our country as well as build local capacity for the renewable and clean energy ecosystem. Whilst today these buses have come from across the world, in the very near future they will be produced here in Nigeria. In the very near future, we will have a multitude of locally trained engineers who are capable of operating, maintaining, and servicing these buses and other renewable energy assets. We see these buses as a first step.

This PoC facilitates the collection of the first sets of data points to support the development and deployment of EV for municipal and public transport on the continent. Our ambition together with Lagos state, is to set our sights on the future and chart a path for others to follow” he noted.

The Sustainable Transport Initiative will see OCEL introducing electric buses to LAMATA’s current fleet of buses. The initiative aims to support the transformation of the State’s public transport system through the development and deployment of a pathway to a carbon free mobility ecosystem within the state.

Speaking on the launch of the PoC phase the Honorable Commissioner for Transportation, Dr. Frederic Oladeinde, noted.

“Climate change refers to a long-term shift in temperature and weather patterns and it’s something we have been experiencing in Lagos and Nigeria recently. Such shifts can be due to natural causes such as changes in the activities of the sun or large volcanic eruptions, or they can be caused by human activities. Today, there is abundant evidence that shows that human activities have been the main drivers of climate change primarily due to the burning of fossil fuels like coal, oil and gas”.

“This situation has given rise to affirmative actions by world leaders and environmentalists to act fast to save our world. Lagos is the only state in Nigeria that has prepared and initiated the execution of a climate action plan. The plan outlines 26 efforts covering adaptation and mitigation actions to build a sustainable low carbon economy in the pursuit of achieving net zero emissions by 2050, 10 years ahead of the Federal Government’s target of 2060” he said.

“The UNGC has provided Oando with an amazing platform, supported by invaluable resources and a network of like-minded private sector companies and peers to which we can align and benchmark our sustainability vision and practices. We are particularly grateful for the opportunity to show sustainability leadership through our involvement in the UNGC local network and global action platforms and collective action initiatives.” noted Ayotola Jagun, Chief Compliance Officer & Company Secretary, Oando Plc.

The roll-out of the electric buses kicked off with a three-month Proof-Of-Concept (PoC) phase in May 2023 and is geared at assessing the viability of electric buses for mass transportation in Lagos State. This will be followed by a Pilot phase with an expanded fleet and bus routes, and the eventual countrywide deployment of 12,000 buses creating employment for over 30,000 Nigerians.

By day 50 of the PoC phase, the electric mass transit buses had transported 41,678 passengers, travelled a total of 22,129km, and mitigated over 29 tonnes (29,875kg) in CO2 emissions. Also, OCEL has trained 44 drivers and technicians (both male and female) during this phase.

The launch of electric mass transit buses in partnership with the Lagos State Government sets a precedent for other States and industry stakeholders and signifies a milestone in the pursuit of sustainable urban mobility. E-mobility has the potential to reduce greenhouse gas emissions, improve air quality, and contribute to the mitigation of climate change.

The Honorable Commissioner for Energy & Mineral Resources, Engr. Olalere Odusote, noted the positive impact the project will have on the health of the citizens and productivity of the city.

“Lagos sits on less than 0.4% of Nigeria’s landmass but plays host to 12% of Nigerians; that should tell you that this is indeed a crowded city, it is also the smallest state in Nigeria, yet the most populous. Research shows that a large majority of the presentations to hospitals across the State are for respiratory illnesses, meaning they are breathing significant amounts of polluted air with direct and indirect losses to the State because of missed worked days, lost earnings, hospital bills to name a few. This is yet another step we’re taking as a government to ensure we clean up the environment, and in addition to the other positive steps being taken in the electricity sector” he said.

The Managing Director LAMATA Engr. Abimbola Akinoja also noted “This initiative is a major aspect of our vision for transportation in Lagos State, we are desirous of having a clean and efficient transportation system. I am elated that in just over a year that Oando Clean Energy came to us to discuss the possibility of working with us in the deployment of electric buses we have signed an MoU with a key deliverable being the implementation of a PoC that would allow us finally include electric buses in our ecosystem”.

Oando’s Sustainable Transport Initiative, which aims to reduce greenhouse gas emissions, enhance energy efficiency, and promote cleaner and more sustainable transportation, will contribute to global climate goals and Nigeria’s sustainable development. It is anticipated that the success of the initiative in Lagos State will lead to its replication in other States across the country and serve as a blueprint for sustainable urban mobility across Africa.

“We are delighted to recognize Oando PLC for their efforts and exemplary leadership in driving clean and efficient transportation solutions” says Executive Director of the UN Global Compact Network Nigeria, Naomi Nwokolo.

“This initiative aligns with the UN Global Compact’s mandate to promote sustainable development, social progress, and environmental stewardship, especially Principle 8 of the UN Global Compact: “Businesses should undertake initiatives to promote greater environmental responsibility’.

“We encourage all businesses, including Oando PLC, to continue exploring innovative and sustainable solutions that create shared value for society, the environment, and the economy. Collaboration between the private sector, governments, and civil society is crucial for achieving the SDGs and creating a more sustainable future for all.

“We remain committed to supporting businesses in their journey towards responsible and sustainable operations, and we look forward to witnessing further progress and innovation from our participating organizations in the pursuit of a more sustainable future” she noted.

NNPC, NCDMB, IOCs Ink Agreement On Reduction Of Contracting Cycle

Mohammed Shosanya

The Nigerian National Petroleum Company Limited and the Nigerian Content Development and Monitoring Board (NCDMB) have signed a Memorandum of Understanding with the International Oil Companies (IOCs) to reduce contracting cycle to an optimal level of not more than 180 working days.

The agreement,which was signed on Monday at the NNPC Towers in Abuja, was a demonstration of NNPC Ltd’s commitment to the efficiency mandate as enshrined in the Petroleum Industry Act (PIA), which is hinged on developing an industry framework for an optimized contracting cycle,a statement said.

It also said,the MoU also expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate tremendous value for all the stakeholders which include investors, companies, host communities and the nation at large.

According to the statement,key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively compared with the current best effort performance of 327, 333, and 185 working days respectively.

At the signing ceremony,the GCEO NNPC Ltd., Mr. Mele Kyari said signing the agreement heralds exciting times for the nation’s oil and gas industry and stands as a bold testimony that the Company is plunging into the future of hope, productivity and success.

Kyari, who was represented at the occasion by NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, added that with oil and gas as the bedrock of Nigeria’s economy, there is the need to get the contracting process in the Industry right so as to get the economy back on track.

The Executive Secretary, NCDMB, Engr. Simbi Wabote, described the MoU signing as a way forward and a critical step towards enhancing the nation’s crude oil production.

In their remarks, the IOCs, represented by the MDs/Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies and ENI all pledged their commitment and support towards the implementation of the MoU for the benefit of all parties.

The framework is in line with the Nigerian Upstream Cost Optimization Program (NUCOP) and in consonance with Mr. President’s directive for NNPC Ltd. and NCDMB to engage the industry with the objective of improving the performance of the petroleum industry.

The development is also in line with the key mandates of NNPC Ltd under the PIA’s Article 53 (7) which empowers it to operate as a commercial entity in a profitable and efficient manner, as the National Energy Company.

The mandate for efficiency requires that NNPC Ltd. is committed to working with its partners in ensuring key processes, procedures, and timelines that drive major business activities such as contracting, are structured in a manner that engenders efficiency and drives profitability.

NNPC Joins United Nations Global Compact

Mohammed Shosanya

The Nigerian National Petroleum Company (NNPC) Ltd. has signed up as a participant of the United Nations Global Compact, thereby becoming the first state-owned oil company to join the global initiative.

Group Chief Executive Officer of NNPC Ltd., Mr. Mele Kyari signed the Letter of Commitment, signifying NNPC Ltd’s participation in the UN Global Compact in a short ceremony on the sidelines of His Excellency, President Bola Ahmed Tinubu’s session during the Global Africa Business Initiative (GABI) at the ongoing United Nations General Assembly (UNGA) in New York,a statement said.

Speaking after signing ceremony, Kyari said that as a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain, NNPC Ltd.’s participation in the UN Global Compact is a further testimony to Nigeria’s commitment to work with global partners towards attaining a just Energy Transition.

He added that with this development, NNPC Ltd. supports the Ten Principles of the United Nations Global Compact on human rights, labour, environment, and anti-corruption.

“We are committed to making the UN Global Compact and its principles part of our strategy, culture and day-to-day operations of our Company, and to engage in collaborative projects which advance the broader development of goals of the United Nations, particularly the Sustainable Development Goals (SDGs),” Kyari added.

Earlier in her remarks shortly after signing on behalf of the UN Global Compact, the Executive Director, UN Global Compact Network Nigeria, Ms. Naomi Nwokolo described NNPC Ltd.’s move to become a participant of the UN Global Compact as a pivotal step in fostering a culture of ethical business conduct, environmental stewardship, and social responsibility.

With Nigeria being one of the largest producers of crude oil in Africa, a transition from an energy system driven by fossil fuels to one based on renewable energy will have far reaching positive impact, serving as a catalyst for sustainability in-country, on the continent and the world at large.

Nigeria To Ease Capital Flow As ExxonMobil Pledges 40,000bpd In New Production

Mohammed Shosanya

Nigeria is best prepared to solve problems and crush all bottlenecks standing in the way of new and large-scale capital flowing into Nigeria’s oil & gas industry,President Bola Tinubu,has said.

This is just as ExxonMobil pledged new production of nearly 40,000bpd in its Nigerian operations in phase one of a new investment push in Nigeria.

President Bola Tinubu disclosed this when he hosted a delegation consisting of the global leadership of an Oil & Gas transnational giant, ExxonMobil, on Monday in New York.

Nigeria is no longer settling for crumbs and leftovers on the investment agenda of the world’s most prolific energy conglomerates,he said,adding that: “Nigeria has never been more ready for business than it is now.”

“The knotty issues require direct supervision on my part. Despite many contending obligations, I will sit down and oversee the process of removing these encumbrances to job and wealth creation for the Nigerian people. We know the industry. We grew up in it. We are positioned to solve the problems, and we are pragmatic, and we will solve the problem,” the President assured.

Speaking,ExxonMobil President of Global Upstream Operations, Liam Mallon, assured President Tinubu that he is aware of the new and personal commitment that the President is bringing to bear on behalf of Nigeria and is well placed to reciprocate the President’s efforts with new investment as he pledged new production of nearly 40,000bpd in its Nigerian operations in phase one of a new investment push in Nigeria.

“What you told us was that your team would collaborate with us, and that has proven true. We have made significant progress since we last met. We are growing our production, and we are working hard on expanding in the deepwater production. We appreciate your efforts, and we will respond in kind. The time is right. Thank you for your leadership,” the ExxonMobil President stated.

Stakeholders Back Shake-Up In NNPC

Mohammed Shosanya

Stakeholders in the nation’s economy have expressed support for the ongoing shake-up in the Nigerian National Petroleum Company Limited (NNPC Ltd.),saying the action would go a long way in repositioning the company for profitability.

They also said the action was a right step in the right direction,as it would in the long run enable the company to add more value to the lives of most Nigerians.

The shake-up saw the statutory retirement of some of the company’s management staff with less than 15 months to quit the employ of the company.

The company made this known on Tuesday on its official X handle formerly known as Twitter.

According to the NNPCL,the move is in a bid to pursue effective organisational renewal to support the delivery of its strategic business objectives, as it has become imperative to rejuvenate its workforce.

The statement posted on the company’s X page reads “Consequently, in addition to the recent exit of three Executive Vice Presidents, other management staff with less than fifteen (15) months to statutory retirement will be exiting the company effective Sept. 19, 2023.

“This is in line with our commitment to scale up NNPCL’s capabilities through targeted talent management and equal opportunity for all Nigerians,” it said.

With the price of crude oil in the international market heading for $100 or more,there is no better time to carry out the overhauling of the overloaded and sadly redundant
manpower/ workforce of NNPCL,Kunle Olubiyo,Nigeria Consumer Protection Network President and Power Sector Perspectives Coordinator, told Premium News on Tuesday.

He said it was not right to make workers of the company redundant for too long at the expense of the country’s economy.

He implored the company to pay up the affected workers with a view to enabling them
use their productive years to engage in other activities or businesses.

Dr.Muda Yussuf,Chief Executive Officer,Centre for the Promotion of Private Enterprise,CPPE,also told Premium News that the action was in order as the NNPC needs workable mechanism to enable it work at par with its contemporaries in other countries.

NNPC/SNEPCo Supports Special Need Pupils In Five-Year Deal With Irede Foundation

Mohammed Shosanya

A partnership between the Nigerian National Petroleum Company Limited, Shell Nigeria Exploration Company Limited (NNPC/SNEPCo) and an NGO, The Irede Foundation has been supporting pupils living with disabilities with prosthetic limbs and training to enable them to acquire education and lead productive lives.

Among other achievements, the partnership which has gone on for five years, provided prosthetic limbs to 25 child amputees who have since returned to school and upgraded The Irede Foundation Prosthetic Limb Centre for conducive limb production, fitting, and rehabilitation process. To date, the centre has catered to more than 150 child amputees.

Four prosthetic limbs were handed out at a ceremony in Lagos on Tuesday in the latest outreach under the partnership.

“Every year, it brings us even more joy to have new friends join us and we are so proud of the progress our old friends are making in their personal lives after receiving their artificial limbs,” SNEPCo Managing Director, Elohor Aiboni said,

She added:“At Shell, powering progress means powering lives and livelihoods through our products and activities, and by supporting an inclusive society which the limb support initiative aims to promote. As we continue to work for the socio -economic development of our country and its people we constantly recognise that the future of any nation lies in its children.”

In an address, the Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS,) Mr. Bala Wunti said: “Our mission is not just to provide physical support, but to empower these children to reach for the stars. With these prosthetics, we are giving them the wings to fly, the legs to run, and the confidence to embrace life’s challenges head-on.”

Wunti,who was represented by NUIMS External Relations Deputy Manager, Mrs. Bunmi Lawson, said: NNPC Limited would continuously champion the implementation of Sustainable projects and programmes that would positively impact the lives of Nigerian citizens.

Executive Director, The Irede Foundation, Mrs Crystal Chigbu, described the partnership with NNPC/SNEPCo as a “transformative collaboration.” She said: “Five years ago, we embarked on a journey filled with hope, purpose, and a shared commitment to make a difference in the lives of children. Today, as we reflect on our collective efforts, we can proudly say that we have made a profound impact.”

The impact of the partnership has stretched beyond young lives. It has promoted inclusion in a public outreach christened “Out on A Limb Walk” and equipped secondary school students with the information and skills to support fellow students living with limb disabilities. In addition, the partnership has educated nearly 5,000 pupils about disability through discussions and distribution of a comic book created by The Irede Foundation to drive advocacy for children living with disabilities.

Supporting pupils living with disabilities is just one aspect of the social investment portfolio of NNPC/SNEPCo which includes provision of educational and healthcare services and facilities across Nigeria.

Last year, NNPC/SNEPCo constructed and renovated two primary healthcare centres for Internally Displaced Persons (IDPs) in Borno and Yobe states. These provide Water, Sanitation and Hygiene (WASH) facilities, medical infrastructure and training for 252 healthcare workers.

Agencies, Oil Firms Fail To Remit $9.85bn- NEITI

Mohammed Shosanya

The Nigeria Extractive Industries Transparency Initiative (NEITI),says total unremitted revenues to the Federation by some relevant government agencies and companies in the oil and gas sector in the year 2021 have risen to over $9.85bn.

The figure and other vital pieces of information and data about Nigeria’s petroleum sector is contained in the 2021 Oil and Gas Industry Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).

Presenting the highlights of the report,Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orjii, stated that the information and data contained in the NEITI latest reports paid special attention to helping the government at all levels to shore up revenue, support national development and poverty reduction through resource mobilisation.

The report provided update on the financial liabilities of the NNPCL and some companies to the federation.

He lamented that despite the concerted efforts made last year to recover some of the revenues through the Ad Hoc Committee that was set up by the National Assembly, the 2021 figures showed an increase.

A compilation of the outstanding financial liabilities due to the Federation by the report indicated that a total of $13.591mn revenues was payable to the Federal Inland Revenue Service (FIRS) as of July 31, 2023, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had outstanding tax collectible revenues of $8.251bn as at December 31, 2022. Over 80% of these outstanding financial liabilities are owed by NNPCL

The Secretary to the Government of the Federation, Senator George Akume represented by the Permanent Secretary, Political and Economic Affairs Mrs. Esuabana Nko while unveiling the report reaffirmed the federal government’s commitment to support and deepen the implementation of the EITI in Nigeria.

According to the SGF, “President Bola Tinubu’s administration is fully committed to the fight against corruption in the extractive industry in particular and in other sectors of the economy. As an Administration, we are convinced that the revival of our economy and the 8-point agenda that we recently unfolded cannot yield the desired result if we do not support and strengthen anti-corruption and reform oriented Agencies like NEITI”.

She added that:“The NEITI 2021 Industry Reports being unveiled is quite timely, coming when the present administration is fully committed to shoring up revenues through priority attention to attracting investments to the key sectors of our economy, the oil and gas sector being one of them”.

Chairman,Senate Committee on Oil and Gas Host Communities, Sen. Benson Agadaga, reaffirmed government’s commitment to implement the recommendations of the NEITI oil and gas report. “Be assured that the Federal Government will carefully study this important report and adopt it as a valuable working document as part of our overall reform programme for the oil and gas sector”, Sen. Agadaga stated.

The Chairman Senate Committee on Petroleum Upstream Sen. Eteng Williams commended the vital role NEITI is playing and urged NEITI to continue to ensure revenue mobilization for the country now that subsidy is gone.

The Chairman, House Committee on Petroleum Resources, (Downstream) Hon. Ikeagwuonu Ugochinyere (Ikenga Imo) pledged the support of his Committee to lay the report on the floor of the House and debate it extensively to ensure the implementation of the recommendations made therein, as enshrined in Sections 3 and 4 of the NEITI Act.

“Working together, we will ensure the realization of government’s desire to diversify the economy for the attainment of alternative source(s) of revenue and clean energy, that will bring about the realization of the projected one trillion-dollar revenue for Nigeria in the next 8 years.”.

The Minister of Budget and National Economic Planning Sen. Abubakar Atiku Bagudu represented by the Permanent Secretary, Nebeolisa Anako stated that the data generated by NEITI will help the ministry in its planning mandate for the country.

“The budget outlay for the country for the current national development plan for five years is N348trillion. Majority of this inflow is going to be from the private sector and the oil and gas sector is key to the realization of this goal”.

The NEITI 2021 Oil and Gas report published this Monday in Abuja with the theme: “NEITI Oil & Gas Industry Report 2021: Relevance built on revenue growth and impact” also made several vital disclosures in line with the NEITI Act 2007 and the EITI 2019 Standard.

The report showed that Nigeria earned a total revenue of $23.046bn from the sector in 2021. The sum is about 13 percent higher than the corresponding total of $20.43bn realized in 2020.

Breakdown of the earnings showed that about $8.67bn, or 37.6 percent of the revenue was realized from the sale of crude oil and gas; $13.37bn, or 58.02 percent, from taxes and other specific revenue flows, and $1.01bn, or 4.38 percent, went into payments to sub-national entities.

An analysis of the total revenue realized, the report stated, showed unremitted revenues and quasi-fiscal expenditure by the NNPCL of $1.95bn (8.47%) and $6.93bn (30.08%) respectively. Transfers to the Federation amounted to $13.2bn (57.27%), while Sub-national payments totaled $963.63mn or 4.18%.

Available revenue for sharing by the federating units after the deductions and in accordance with the revenue allocation formula was US$13.2billion which represented 57.27% of the total revenue collected. This is lower than the 71.7% shared in 2020.

The quasi-fiscal expenditure of $6.931billion (equivalent of N2.651trillion) were deducted from the Federation’s revenue before remittance without appropriation by the National Assembly.

A breakdown of the $6.93bn deductions showed payments of $3.52bn or 15% for Joint Venture Cost Recovery and $3.031bn (about N1.16 trillion) or 13.15 percent for products subsidy/value loss. Other deductions are $258.43mn for government priority projects; $75.51mn for pipeline maintenance and holding cost and $42.40mn for crude oil and products losses.

The NEITI report also observed that none of the refineries was operational in 2021 despite spending about N200billion between 2020 and 2021 on refinery rehabilitation which was deducted from the Federation sales proceeds.

These deductions the report reiterated, remains a heavy cost to Federation Revenue remittances.

In addition, the report said about $1.95bn, or 8.47% of the total revenue was not transferred to the Federation Account by the NNPCL during the year under review.

Breakdown of the withheld revenue included, $722.6million for NLNG dividend; $871.15mn from domestic crude sales, $859,583 miscellaneous revenue and $286.42mn from export crude sales. $24.332million and $45.76million were withheld from transportation revenue and domestic gas proceeds.

A ten – year trend analysis of financial flows from the oil and gas sector from 2012 to 2021 showed earnings of $348.63Billion.

On crude oil production and exports, the NEITI report indicated that total metered crude oil production was 634.60 million barrels, out of which the nation lost 68.47 million barrels to production adjustment, measurement error, theft and sabotage. The figure showed a 13% reduction from the production volumes of 2020.

The report said,of a total 29 companies suffered crude losses from theft and sabotage amounting to 37.57 million barrels. The decline in crude oil losses due to theft and sabotage from 39.08million barrels in 2020 to 37.57million barrels in 2021 was generally due to the decline in crude oil production during this period.

On gas production and utilization, the NEITI report said a total of 2.74million standard cubic feet of gas was produced during the year, with the volume about 8.96 percent lower than the 3,013,634mmscf produced in 2020.

Total gas utilized in 2021 stood at 98%, while 2% could not accounted for by the companies based on the templates submitted.

With the nation’s gross domestic products put at about $434.17bn, the report said the oil and gas sector contributed about 7.24% to the GDP and $ 36.55 billion (N14.40 trillion Naira) to total exports of $ 47.31 Billion (N18.91 trillion).

This represented 76.22 % of the total exports in 2021, 0.8% higher figure than in 2020. 19,171 employees were said to be working in the sector in 2021.

Similarly, the total government revenue generated in 2021 was 10.75 trillion Naira to which the oil and gas sector contributed 4.358 trillion Naira.

This represents about 40.55% of the total revenue compared to 51% in 2020. The higher export value in 2021 compared to 2020 was due to the increase in crude oil price in 2021 from $41.65 per barrel to $66.97 per barrel, the NEITI report disclosed.

NEITI also reported on the 2020/2021 marginal fields awards. It observed that NUPRC regulation expected all successful applicants whose names were in the Notice of Preferred Bidder Status to make payments for signature bonus prior to award.

However, the report observed that the list of awardees contained names of companies that had not paid signature bonuses, with four companies whose names were not on the list of awardees making payment of signature bonuses.

NEITI in the 2021 report also observed that majority of the oil and gas companies in Nigeria exhibit complex structures that shield the real identities of their owners, thereby limiting the impacts of efforts at beneficial ownership disclosures.

It called on the NUPRC to implement fully the relevant sections of the PIA on Beneficial Ownership reporting.

Other recommendations made by NEITI in its 2021 report are that NNPC should transparently disclose details of the subsidy and the beneficiaries of the payments, render accounts on project eagle loans transaction and review and investigate all pre-export financing arrangements and other loan arrangements done in exchange for the nation’s crude oil and gas.

NEITI also recommended that Government should commission a comprehensive audit of the PMS subsidy-related financial transactions between NNPC and the Federation, determine all liabilities and ensure accurate and verified data.

The agency noted the discrepancies in records by some relevant government agencies on transactions in the sector which it says raises concerns about the integrity and accuracy of the data and pieces of information disclosed by these agencies.

It called on the concerned agency to improve its data management processes and establish controls that would prevent future discrepancies and maintain data integrity.

NEITI also drew attention to the practice of computing 13% derivation on the balance of revenue after deductions from the total collections which it advised should be discontinued. Rather, the 13% derivation should be based on total collections for the relevant period in accordance with Section 162(2) of the constitution of the Federal Republic of Nigeria.

It stressed the urgent need to strengthen the remediation mechanisms and involve independent third parties to conduct detailed investigations where necessary, especially with the PIA now in place for effective monitoring of the implementation process.

The report which was reconciled on behalf of NEITI by an Independent Administrator, Messrs Taju Audu & Co., had a total of 69 companies and 13 government agencies, the NNPCL, the Nigeria LNG and Nigeria Sao Tome Joint Development Authority with 23 revenue streams covered.

One company, Lekoil Limited did not submit any information for reconciliation, but was captured to have paid over $7.76million.

Dr. Orji urged policy makers to take seriously the findings and recommendations of the NEITI oil and gas report and use the data for economic planning and reforms of the sector.

NNPCL,Indorama Ink Agreement On Improved Gas Use

Mohammed Shosanya

The Nigerian National Petroleum Company Limited and Indorama Eleme Petrochemicals Limited have signed a Memorandum of Understanding (MOU) to explore and develop suitable opportunities within the remits of both parties’ interests across the hydrocarbon value chain in Nigeria.

The new agreement was conveyed in a statement by Garba Deen Muhammad, the Chief Corporate Communications Officer, NNPC Limited,who also noted that the move is a development that NNPC Ltd.’s GCEO, Mele Kyari, summarized thus: “NNPC Limited is on the threshold of making value out of gas beyond any imagination.”

The statement said,one of NNPC Ltd.’s roles as enshrined in article 64(i) of the Petroleum Industry Act (PIA) is to promote the use of natural gas through the development and operation of large-scale gas utilisation industries.

It explained that this role is in alignment with Nigeria’s Nigasification strategy which is a consolidation of critical programs embarked upon by the company to utilise natural gas and its associated liquids to be the energy source of choice, spur economic growth, free up crude oil for exports, and ultimately enable job creation.

According to NNPC Ltd.’s GCEO, with this project, “we are seeing an annual contribution of $3bn to the nation’s GDP and a lifetime contribution of $18bn to government revenue.”

As part of the company’s vision of operating the largest Petrochemical Hub in Africa, Indorama which owns the world’s largest single-train Urea Plant located in Port Harcourt, Nigeria, is currently working on expansion plans within the next 6 years, in the gas-based heavy manufacturing industries including fertilizer, methanol, and petrochemicals.

Speaking,the MD/CEO, Africa Indorama Energy, Manish Mundra, stated that “This is a strategic collaboration to unlock Nigeria’s upstream sector, but more importantly, to partner downstream, in order to share the value chain.” He said that “Nigeria’s gas reserves should position the country as one of the largest producers of urea in the western hemisphere.”

The statement quoted that key benefits of the opportunities include the monetization of over 1.7 TCF of gas and 100 million barrels of oil reserves, generation of upstream lifecycle revenue of over $18bn, downstream production of about 4.8 Million Tonnes Per Annum (MTPA) of products including methanol, urea, and fertilizer to boost national food security.

Other benefits include the creation of about 55,000 direct and indirect employment opportunities, the development of a condensate refinery to boost petroleum product supply and reduce product importation, annual GDP contribution of over $3.8bn, and attraction of over $7bn of foreign direct investment into the country.

According to the statement,the NNPC Limited’s agreement with Indorama follows Nigeria’s President Bola Ahmed Tinubu’s commitment in India a few weeks ago, to strengthen business relations between both countries.

Oil Producing Host Communities Deserve Economic, Social Justice, NEITI Insists

Mohammed Shosanya

The Nigeria Extractive Industries Transparency Initiative (NEITI) has renewed call for economic, environmental and social justice for oil, gas and mining host communities in Nigeria.

Mrs. Obiageli Onuorah, the Deputy Director/Head, Communications and Stakeholders’ Management, in a statement, noted that the Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji ,disclosed this in Owerri, Imo State at the opening ceremony of the National Extractives Dialogue organised by a civil society organisation- Spaces for Change in collaboration with NEITI and the Ford Foundation.

Dr. Orji stated that a special multi-stakeholder’s approach was required to draw national and international attention to the specific responsibilities of extractive companies, the government, the civil society organisations, development partners and the host communities to address development issues of access to education, health care, job opportunities, environmental challenges and social infrastructure deficit in oil, gas and mining host communities.

He advised leaders of host Communities drawn from the South-South and South East geo-political zones to change their advocacy approach and work with NEITI to push their complaints through peaceful consultations driven by knowledge, information and data sharing, constructive engagements and dialogue.

He explained that the rationale behind the focus of this year’s annual dialogue series focusing on Host Community Development Trusts to serve as the Catalyst for Equitable Benefit-Sharing and Sustainable Prosperity for all in host communities was to serve as a new platform for discussions and constructive debates on how citizens-centered- policy engagements will drive the implementation of Host Community Development Trusts established by the Petroleum Industry Act (PIA).

He added:“There is the need to examine how the Host Community Development Trust as enshrined in the Petroleum Industry Act is being implemented. What is the governance structure? How inclusive, participatory and transparent is the process of nominating members of the Board of Trustees, Management Committees and Advisory Committees”.

He that NEITI’s legitimate interest in working with Spaces for Change a leading civil society organisation is in furtherance of the agency’s partnership and collaboration with civil society organisations to deepen the implementation of the Extractive Industries Transparency Initiative (EITI) at the sub national levels.

He appealed to host communities in Nigeria to build trust and confidence in managing the relationship between host communities, government and the companies operating in the sector.

The Deputy Chairman, Committee on Host Communities in the House of Representatives, Abdulkarim Hussaini Ahmed called for inclusion of public education, conflict prevention, management and resolution mechanism in the implementation of Host Communities Development Trust Fund and pledged the support of the National Assembly.

The Governor of Imo state represented by the Commissioner for Petroleum Resources, Prof. Eugene Opara, expressed satisfaction at the tone and direction of the dialogue and pledged the support of the state government.

The Commissioner welcomed the clarification given on what constitutes the 3% operating cost of the oil and gas companies has been laid to rest some of the doubts and unanswered questions.

He implored relevant government agencies in the sector involved in implementation to invest on public education and enlightenment of host communities.

The host and Executive Director of Spaces for Change, Mrs Vicotria Ohaeri, called on the host communities to organise themselves and take full ownership of the process adding that the provisions of the new legislation have moved host communities away from the era of charitable developmental assistance to a new era of entitlements and human rights”.

Mrs Ohaeri remarked:” Host communities under the PIA provisions now have the right to benefit from natural resources and these benefits are no longer acts of corporate benevolence, but an entitlement to partake in the design, content and structure of their own development, and most importantly, participate in the governance and administration of the extractive resources.”

The Dialogue was attended by government agencies in oil and gas industry, civil society organisations, representatives of state governments, the media and development partners.

The Dialogue examined the structure of the fund, the need for inclusiveness in designing the governance structure, definition of roles of state governments, companies, traditional rulers,host communities and the civil society.