Two Modular Refineries for Inauguration in December – FG

The Federal Government has said that two of the 38 modular refineries granted licences to operate in the Niger Delta region will be completed and ready for inauguration by December this year.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated these on Wednesday when he led a joint team from the ministry, office of the Vice President and the Department of Petroleum Resources to inspect a modular refinery being constructed by Omsa Pillar Astex Company Limited in Kwale, Delta State.

Kachikwu, represented by his Senior Technical Adviser (Refineries and Downstream Infrastructure), Mr. Rabiu Suleiman, said the two modular refineries to be inaugurated by the end of the year were located in Rivers and Delta states.

The minister’s representative, who was conducted round the site by the Chief Engineer of OPAC Modular Refinery, Elberd Bilanich, expressed joy at the pace of construction work, adding that upon completion, the two refineries would process 7,000 barrels of crude oil daily.

Kachikwu stated, “We are here to provide support as a government and also to evaluate what this company is doing, which is in alignment with the vision of this government, and how we as a government can encourage local production of petroleum products, and to see to the establishment of many modular refineries as indicated by the government, and to provide such support.

“If you recall, sometime last year, the Vice President visited the Niger Delta and made a policy statement to encourage the establishment of modular refineries. We are happy that we are here today. This is one of the first few that have kept to that promise to deliver on what they have promised to do; and today, we are happy to see the installation of the 7,000-barrel capacity modular refinery. As you can see, Russian technology is being installed here.

“The commitment we hear is that within six months from now, the refinery will be completed and we are looking forward to seeing that. In my side talks with the chairman of the company, he is expecting another 45 tonnage of materials to arrive on site and that is a significant portion.

“If that arrives in the next few weeks and construction continues and the weather being a good friend, six months will be made and that is going to be a promise fulfilled. By that, we can say by the end of the year, we will be coming to witness the inauguration of yet another refinery in Nigeria.”

He explained that the planned inauguration of the two modular refineries would send the right signal to other investors who had been sceptical of the Federal Government’s commitment to promote the construction of more modular refineries.

“A total of 38 licences have been issued, ranging from high-scale refineries of 50,000 to 100,000 barrels per day. Out of these, about 10 of the modular refineries have advanced and they have all secured what we call permit to construct, just as it is here. So, with the licence to construct the LTA, it means that 10 as of today are ready to go. This is just one of the 10.”
It noted that the President Muhammadu Buhari administration’s resolve to establish modular refineries was part of the long-term plan to end importation of petroleum products and to discourage illegal oil bunkering activities in the region.

Nigeria Has Lost The U.S Oil Export Market-Kachikwu

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said Nigeria has forever lost the United States as a significant crude export market.

“That’s gone,” Kachikwu was quoted by Platts to have said during a news conference at CERAWeek in Houston, Texas, United States.

Light sweet Nigerian crude is very similar to the light oil produced in US shale. As US shale production has increased, the appetite for Nigerian crude in the US has dropped dramatically.

US imports of Nigerian crude climbed as high as 1.31 million barrels per day in February 2006, according to the US Energy Information Administration. But as the shale revolution began and output of light tight oil rose, Nigerian imports fell. In July and August of 2014 and June of 2015 the US did not import any Nigerian oil.

US imports of Nigerian crude averaged 296,000 bpd in December last year, according to EIA data, the highest monthly import level since 2011. But Kachikwu called any significant increase in Nigerian shipments to the US “very unlikely.”

Nigeria’s oil output averaged 1.93 million bpd in January, up 30,000 bpd from December, according to the latest S&P Global Platts survey.

Reuters quoted Kachikwu as saying that oil majors operating in both shale fields and in members of the Organisation of Petroleum Exporting Countries should bear some responsibility for prices.

“We need to begin to look at companies that are very active in these areas and begin to get them to take some responsibilities in terms of stability of oil prices,” Kachikwu told Reuters on the sidelines of the conference, though he did not name any specific companies.

“Some of the same companies that are working in shale are the same companies working in OPEC (member countries),” he added.

The price of oil rose steadily throughout 2017 in the wake an agreement between OPEC and non-members, including Russia, to cut production by 1.8 million bpd beginning last year.

That surge in prices, however, boosted US production sharply, which hit a record in November 2017 at more than 10 million bpd and is expected to surpass 11 million bpd later this year.

Kachikwu said that the rapid growth in shale supply is “not just a problem for OPEC, it’s a problem for the entire oil industry.”

“I don’t think it requires pressure. I think the oil companies would be the first to tell you that stability in the oil price is important to them,” he added.







‘Petrol Queues, Power Failure’ll Persist Without Adequate Pricing’

The Federal Government on Tuesday declared that it was necessary for the country to address issues around the pricing of petroleum products and gas if Nigeria overcome the problems  in the supply of petrol, power and gas.

It also stated that in trying to regulate the price for petrol and other commodity in the oil and gas sector, care has to be taken inorder to prevent citizens from suffering unnecessarily.

The Minister of State for Petroleum Resources, Ibe Kachikwu, who said  this at the ongoing Nigeria International Petroleum Summit in Abuja, said until the country  faced the pricing issue in the sector, repairing  the existing refineries and encouraging private investors to construct new ones, the problems would not be solved.

The minister stated, “Ultimately, the greater challenge that this country would have and still has is that of pricing. Everybody wants power, available gas and freely delivered fuel with no queues, but people are not willing to make the sacrifices that are essential for these things to happen.

“Sometimes, it is a pricing issue. We have got to get to a point where we’ve got to deal with some of these issues in a manner that doesn’t hurt our people but at the same time create the level of efficiency as to remove arbitrages and patronages that are inbuilt in them.”

Kachikwu told international guests at the event that Nigeria’s refineries should be ready within 18 months, but stated that without adequate pricing, the plants would not solve the country’s petrol supply challenges.

“Refineries and local production are key. We expect a 12 to 18-month corridor of construction and hopefully, at that point, we will get our refineries back. However, if we get the refineries back by 2019, does that solve the problem? No, it doesn’t. You still have to deal with the pricing issues, because nobody is going to build a refinery and sell products at a loss,” he added.

The minister stated that the Federal Government would be setting parameters and incentives for building of refineries.

This, according to him, will ensure that a typical producer, especially the small level producers, are able to see enough incentives to be able to get some of their products refined in-county as well as being exported.

“That is the major policy directive. There are going to be incentives for those who are doing the major practical investments in the refineries, for example. There are not dearth of opportunities in this country. I do not know of any country with the vast opportunities that Nigeria possesses,” Kachikwu said.

The minister continued his argument that there was no reason why oil companies would do their business in Nigeria and take 100 per cent of the crude oil produced out of Nigeria.

He stated, “What are they doing with it? They are going to take it to refineries; they are going to crack them somewhere. If there are incentives for them to crack them here, they will do so. Ultimately, Nigeria must aim to be the refining corridor for the whole of Africa. That is becoming very critical.

“If we do all that concerning the planned investments in refineries, my position is that the business has got to change. It has got to change to taking your crude oil and being able to refine. It has got to change to be a major player in the power sector. It is got to change from oil to gas and to clean energy. We have got to look into moving incentives away from oil, back into gas and back into cleaner energy.”

Kachikwu Laments Nigeria’s Loss To Oil Production Contracts

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Tuesday said the country had lost a lot of money to Production Sharing Contracts entered into with oil companies in the past.

Kachikwu said the conditions of the agreement would change to help the Federal Government to get more from oil production in the country.

The minister, who stated this in Lagos during a visit to the Egina Floating Production, Storage and Offloading vessel at the LADOL Free Zone, applauded Total Upstream Nigeria Limited for going on with the project despite the slump in global oil prices.

“For companies that invested and took the risk, like Total did, and continued investing during that period, this is the time to hopefully reap from that,” he stated.

Kachikwu noted that the country would begin to look at its priorities differently, adding, “We are going to begin to look at what is the net value for the country in this huge project. We are not as a country very impressed with a lot of the PSCs that we have put together. We lose a lot of money in the process.

“We would like to see a lot of movement in those areas and in an era where we are going to be quite frankly rationing production. And as we begin to ration those numbers, we are going to begin to place emphasis on where we make more money.”

He told the oil majors present at the event that “as you look at your numbers and the terms under which you want to develop these fields, please spend a good amount of time checking the bottom line and what goes into the Federation Account.”

He said looking at one field, he felt very pained that no single royalty was paid for one reason or the other.

The minister stated, “Those kinds of things will not happen anymore. So the terms will change; the basis upon which we proceed will change. But Nigeria will continue to be a prolific economic return model for any country in the world in terms of oil production.

Kachikwu’s Whistle By Ray Ekpu

The Minister of State for Petroleum Resources is Dr. Ibe Kachikwu. The Minister of Petroleum Resources is Alhaji Muhammadu Buhari. Buhari is also the President of Nigeria, while Kachikwu doubles as chairman of the Nigerian National Petroleum Corporation’s (NNPC) Board of Directors. NNPC manages Nigeria’s oil business. It collects all the money from the oil industry and brings to the table for sharing. The money it controls – in dollars – and the powers it wields – in political capital – are awesome. Whoever is the Minister of Petroleum Resources is the god of cash. Two of our Presidents, Olusegun Obasanjo and Muhammadu Buhari decided, as civilian presidents, that since the oil portfolio is very strategic they would run the ministry by themselves as the substantive minister. Whether or not that is the best decision for the country is not the subject of this piece. But I suspect that part of the reason that informed the decision may have been to ensure that decisions can be taken promptly when emergencies occur in this volatile industry that is warehoused in a volatile region, the Niger Delta region.

On August 30 this year the Minister of State, Kachikwu, wrote a letter to his direct boss and substantive Minister of Petroleum Resources and President of Nigeria, Buhari. He complained about the Group Managing Director of the NNPC, Dr. Maikanti Baru. He complained of Baru’s alleged insubordination to, the humiliation of him, breach of due process in the award of contracts totalling about $24 billion. He listed some of the contracts allegedly awarded without due process as (a) crude term contracts $10 billion (b) DSP contracts $5 billion (c) AKK pipeline contract $3 billion (d) various financing allocation funding contracts worth over $3 billion (e) NPDC production service contracts valued at between $3 billion and $4 billion. Kachikwu stated that the “legal and procedural requirements are that all contracts above $20 million would need to be reviewed and approved by the Board of NNPC. Over one year of Dr Baru’s tenure, no contract has been run through the Board.”

Dr. Baru has not yet responded to these allegations so at this point they remain mere allegations. The views expressed here are therefore tentative and on an iffy basis. By iffy basis, I mean that if Kachikwu’s allegations are correct and uncontradicted what are the implications? To begin with, if the contract limit available to Baru is $20 million why did he not do it the Nigerian way by slicing the contracts if they were sliceable? They could have come in small bits of $5 million, $10 million, $15 million, a series of $17 million, $19 million until he gets to $24 billion. It would have taken a little more paperwork, a little more time but in due time he would have reached the magic figure of $24 billion and the wahala of having to do the explaining that he has to do now would have been avoided.

Some questions need to be answered. Did Kachikwu’s letter dated August 30, 2017, get to the President? Or was it blocked from reaching him? Was the letter sent by courier, by the Ministry’s mail service or by a messenger and was it signed for as is the practice in most properly organised set-ups? When exactly did the content of the letter reach the President’s eyes? Was it five weeks or so ago when it was written or a week ago when it was patriotically leaked, in the spirit of whistleblowing and the public’s right to know. Who prevented Kachikwu from seeing the President who is his direct boss to whom he should ordinarily have a substantially unimpeded access because of the nature of that portfolio and the operating terrain? Who does Baru report to: Buhari or Kachikwu? Or Buhari through Kachikwu? Or is he a lone ranger? Or an independent republic like Nnamdi Kanu’s Biafra republic?

The matter is gathering steam now. Kachikwu has met the President. No one blocked him this time. Baru has met with the Vice President, Professor Yemi Osinbajo. No communiqué has been issued from these two meetings by the two dramatis personae with the top two dramatis personae of our Republic. However, the Senate has set up a committee that is assigned to sink its teeth into the matter. So hopefully we will have the chance of hearing the full story of Nigeria’s troubled and troublesome NNPC. We hope there will be full disclosure and nothing will be swept under the red carpet of the Red Chambers.


NNPC is like a school for scandal. Scandals are never far away from the corporation understandably because it is the manager of the cash cow, the oil industry. As Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, had written a letter to President Goodluck Jonathan on September 25, 2013, complaining of the corporation’s failure to remit to the Federation Account the sum of $49.8 billion. He complained of other irregularities. The Jonathan government took no positive action. It suspended Sanusi from office in a mafia-like operation while Sanusi was out of the country on official duty. That ended the matter temporarily. But the worms are crawling out of the can now. From the tales we are reading about the then Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, a lot of elephants, not just camels did pass through the needle’s eye if these stories are true. As we were busy absorbing her massive, avaricious acquisition stories we were regaled with the appointments scandal at NNPC. Out of 55 top appointments announced, the North, a non-oil producer got 10; the South West an oil producer three, the South-South, another oil producer two while the South East, an oil producer got zero. This is a contravention of the federal character principle. This is the ugly face of sectionalism. The NNPC responded by saying that the appointments announced did not represent the total figure. It did not give the remaining figures. If it did not have anything to hide it would have, as a public corporation, published the entire information. I do not know if the figures have now been adjusted. And as that controversy was gradually abating, this one involving Baru reared its horrid head.

Even the composition of the board of the NNPC showed an utmost lack of sensitivity. It is dominated by the non-oil producing states which make Kachikwu simply a figurehead chairman of that board because on every issue he can be outvoted. But if Kachikwu is correct, even that board is treated contemptuously as if it does not exist. If the board did not approve the various contracts listed by Kachikwu did Buhari approve them? The PDP claims that Buhari must have approved them to build a war chest for his second term. That statement must be regarded, unless proven, as partisan political propaganda. The President, I am sure, is a believer in due process. Anything to the contrary would severely damage his political capital.

Buhari must show that his war against corruption is not dead or dying. I have written close to a dozen articles supporting that fight because it is a fight for the soul of Nigeria. Buhari told us that about $150 billion have been squirreled out of the country. That must be how much the government has been able to locate. It is probably higher than that. But even what we have found is difficult to retrieve from the keepers of these stolen assets. They are now telling us that we must give them guarantees that, if returned, the money will not be stolen. Can you imagine the insult to a sovereign country? You can’t blame them. We put ourselves in that situation.


As this Kachikwu – Baru tango is brewing we can ask what Buhari has done about two of the outstanding cases of alleged corruption or impropriety. The cases of Mr. Ayodele Oke, director general of the National Intelligence Agency, (NIA) and Mr. David Babachir Lawal aka Mr. Balderdash. The two cases broke out in December. The case of Oke involved a huge sum (about $43 million) belonging to the government stacked in a private apartment in Osborne Towers, Ikoyi. No satisfactory explanation was made by Oke. Lawal allegedly awarded contracts valued at more than N200 million to his company for grass cutting which was irrelevant to the problems of the internally displaced persons in the North East. A Senate Committee headed by Senator Shehu Sani investigated the matter and found Lawal guilty. The Presidency peremptorily dismissed the Senate’s decision on the ground of lack of fair hearing. President Buhari directed the Vice President to investigate both matters. The report was submitted to Buhari on August 23, 2017 with fair hearing observed. Six weeks later, there is no decision. This decision is important for the restoration of public confidence in the anti-corruption fight.

The Baru episode is coming at a time that the guns have fallen silent in the Niger Delta since the President sent out the Vice President on trouble-shooting missions in the region. It is also happening at a time that we need renewed confidence in the investment possibilities in the country. It is a period when we have to convince the keepers of our stolen assets that we have turned a new leaf, that we do not tolerate corrupt activities, that we respect due process.

On all of these scandalous issues, Buhari has to assure the nation that he is capable of being fair and firm without minding whose ox is gored. It is a challenge we must meet head-on if he wants to retain the confidence of believers in his anti-corruption campaign and put some polish on his legacy.

Issues Arising From Dr. Ibe Kachikwu’s Leaked Letter By Femi Falana

The people of Nigeria were surprised last week to read the embarrassing petition of the minister of state in the Ministry of Petroleum Resources, Dr. Ibe Kachikwu, addressed to President Buhari pertaining to his inability to consult with the president and substantive minister of Petroleum Resources, and the unilateral award of $25 billion contracts by Mr. Maikanti Baru, the group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC). Although it was reported that Dr. Kachikwu has since been given access to the president, the details of the discussions between the duo have not been made public. However, apart from sanctioning the officers responsible for creating the wide gulf between Dr. Kachukwu and the president, the allegation of the unilateral award of contracts worth $25 billion by Dr. Baru ought to be investigated in line with the anti corruption policy of the Buhari administration.

In order to conduct a thorough investigation into the grave allegations of the reckless contravention of the provisions of the Public Procurement Act, Mr. Baru should be placed on indefinite suspension while the Presidency should refer the case to the Economic and Financial Crimes Commission. And once it is confirmed that the said $25 billion contracts were awarded without the approval of the NNPC Board they should be revoked while the recent appointment of the heads of the parastatals in the oil and gas industry should be reviewed in line with the Constitution and the Federal Character Commission Act.

Curiously, the Presidency has demanded for the minutes of the meetings of the NNPC Board. This demand has confirmed that the meetings of the Board, which are statutory required to be chaired by the minister of Petroleum Resources have not been held as and when due. More importantly, the demand has corroborated that aspect of Dr. Kachikwu’s petition alleging that the powers of the Board have been usurped by Dr. Baru. Therefore, the petition should provide an opportunity for the president to reorganise the NNPC with a view to ensuring that it is publicly owned in a manner that the Board is constituted by accredited representatives of the oil producing commnunities and credible civil society groups, including the trade unions in the oil and gas industry.

Having regard to the enormous responsibilities of the office of the Minister of Petroleum Resources and chairman of the NNPC Board, President Buhari is advised to relinquish the ministerial position in view of his busy schedule and appoint another Nigerian of proven integrity and competence to superintend the affairs of the Ministry. If this advice is accepted in good faith and acted upon without any delay, it would remove undue pressure on the health of the president and allow him to attend to other urgent matters of State.