NNPC Leadership Academy GM Lauds Aregbesola’s Intervention In Education


The Group General Manager, Nigerian National Petroleum Corporation (NNPC) Leadership Academy, Musa S. Gimba, has lauded Governor Rauf Aregbesola’s interventions in the education sector, describing it as a reference point in Nigeria.

Gimba who led a group of staff of the academy to Osun for a three-day visit, said he was impressed on the development and promotion of functional education in the state, just as he recommended the interventions of the Aregbesola’s administration in education sector to other states’ governors.

Giving the report of his observation on Monday, Gimba said the team was in the state to understudy ‘some of the state of the art and world class schools built by the Aregbesola’s government.

According to Gimba, the team also came to confirm the positive information and very high commendations of the model of management and organization in the Osun education sector.

At Anthony Udofia Government Elementary School, Osogbo, Gimba said the team observed the enthusiastic and confident pupils, enjoying their nutritious and tasty free meals (O-Meal) provided by the government after an interesting class session.

He said all members of the team were excited when they got to Osogbo Government High School, expressing delight that such excellent quality of schools is not only in Nigeria but are provided under the free education policy.

NNPC Increases Supply of Gas to Power Sector by 89%

The Nigerian National Petroleum Corporation, NNPC, has announced that it has increased the supply of gas to the power sector by 88.89 per cent.

According to the oil firm, the increase was recorded between January 2017 and January 2018.

The NNPC disclosed this in its monthly financial and operations report for January 2018, which was released in Abuja on Sunday.

The report stated that gas-to-power supply as of January 2018 stood at 731 million metric standard cubic feet per day as against 387mmscf/d in January 2017, representing 88.89 per cent increase.

“An average of 731mmscf/d of gas was sent to over 20 domestic thermal power plants in the month of January 2018, generating a thermal power output of 3,076 megawatts to the national grid, representing 76.7 per cent of the total national power generation”, the report stated.

The NNPC said an additional 365mmscf/d of gas was supplied to the industrial sector to power over 50 companies in the period under review.

It stated that the total gas production for the month was put at 8,169mmscf/d, out of which 14 per cent was supplied to the domestic market, 43 per cent for export, while 31 per cent was re-injected, and the balance flared.

The report gave the total crude processed by the Kaduna Refining and Petrochemical Company and Port Harcourt Refining Company for the month of January 2018 as 204,877 metric tonnes, with the KRPC accounting for 183,022MT, while a total of 21,855MT was processed by the KRPC.

It stated that production by the two refineries during the period translated into a combined yield efficiency of 89.97 per cent as against the 88.99 per cent in December 2017.

The report added that in the month under review, 1,463.66 million litres of PMS and 33.79 million litres of Dual Purpose Kerosene were supplied through the Direct Supply, Direct Purchase arrangement.

It noted that the corporation’s supply of Premium Motor Spirit into the country during the period was far above the normal daily supply of 35 million litres in order to ensure the product’s availability nationwide.

The report reiterated that the NNPC was inching closer to choosing financiers for its refineries with a view to achieving 90 per cent capacity utilisation per stream day before the end of 2019.

The NNPC monthly report, however, listed crude oil pipeline vandalism among the biggest challenges that plagued the downstream operations of the corporation in the month of January 2018, adding that the malaise put the corporation at a disadvantaged competitive position.

“NNPC Makes N250bn Profit”

The Group Executive Director, Finance and Accounts of the Nigerian National Petroleum Corporation, Mr. Isiaka Abdulrazak, said the corporation made a trading profit of N250bn in 2016.

Abdulrazak said this in a quarterly publication of the NNPC, a copy of which was obtained by the News Agency of Nigeria on Tuesday in Abuja.

According to him, his office inherited 65 unaudited financial statements between 2011 and 2014.

He said that though there were challenges that led to the backlog, a Project Steering Committee chaired by him was constituted to meet with auditors and all relevant stakeholders to identify and isolate key challenges and give them priority attention.

Giving an insight into how he was able to clear the corporation’s unaudited accounts from 2011 to 2016, Abdulrazak said this figure was up from a deficit of N123 billion in 2015.

“In August 2015, when the present management of the Finance and Accounts Directorate took over the mantle of leadership, we inherited a total of 65 unaudited financial statements for NNPC corporate and its subsidiaries covering 2011 to 2014.

“The major elements consist of a review of the Group Audited Financial Statements, particularly for 2016 reveals a positive shift to a trading profit of N250 billion from a trading deficit of N123 billion in 2015, indicating a 300 per cent improvement in trading performance.

“This is despite the decline in the average price of crude oil to as low as 345 dollars per barrel in 2016, compared to 51 dollars in 2015, and 110 dollars in 2014,’’ he said.

He said it was also critical to point out that the 2016 result was a reflection of management’s philosophy to enhance profitability by forcing down costs and improving revenue generation.

“For example, we have discontinued sub-commercial business arrangements such as offshore processing arrangements, disadvantaged crude for product exchange swap and poorly-managed strategic alliances.

“To improve revenues, there have been a number of new initiatives such as the introduction of Direct Sale Direct Purchase, a 20-25 per cent cut on all commercial contracts among others.

“Also, revenue analysis shows a 10 per cent increase from N2 trillion to N2.3 trillion between 2015 and 2016.

“Further analysis shows a 75 per cent increase in petroleum product sales from N820 billion to N1.4 trillion, attributable to the partial deregulation of petrol price,’’ he said.

According to him, the statement of financial position has been riddled with persistent losses over time and this had eroded shareholders’ equity.

“You will recall that I mentioned that the Group trading performance improved to N250 billion trading surplus in 2016 compared to a trading deficit of N123 billion in 2015.

“However, the Group ended with a net loss position mainly due to NPDC revenues shut-in as a result of the security situation in the Niger Delta in 2016, and exchange rate losses among others.

“The Group results would have been positive without these factors,’’ he said.

He said the directorate under his watch had recorded successes in areas like managing foreign exchange intervention pool for importation of petroleum products and savings on insurance premiums.

“This has so far led to more than 340 million dollars year-on-year savings in premiums payable over the period of 2015 to 2018 (about 45 per cent) effective reduction in year-on-year premiums.

“Other successes include reducing the unwieldy number of accounts managed by the corporation from more than 2,000 to a little fewer than 200. All the old accounts under commercial banks have been fully reconciled and closed.

“Another is the settlement of the cash call arrears and self-funding mechanism for joint venture operations, successfully negotiating an agreement 6.8 billion dollars to 5.1 billion dollars, a 25 per cent drop and the implementation of the self-funding mechanism for upstream joint venture operations for the federation.

“This has resulted in higher government take in royalties and taxes, sustained reserves development and production, restoring investors’ confidence, thereby creating windows for financing opportunities.’’

He said the outlook for the next strategic business period would be to focus on partnering with the corporate services directorate to optimise the utilisation of enterprise resource planning, infrastructure and architecture to provide an end to integration of NNPC business processes.

“Secondly, we are also focusing on delivering on the blueprint of making the corporation initial public offer ready.

“This will involve principally cleansing our legacy financial data and balance sheet restructuring as well as profitability.

“Thirdly, we shall continue to build on successes achieved with the open publication of monthly operations and financial reporting and rendition of audited financial statements in line with the provision of the NNPC Act and other relevant laws of the land.’’

He said in recognition of the achievement, the NNPC board had further mandated management to clear the remaining outstanding reports for the period 2013 to 2016.


Osun, NNPC Move To Estabish Standard Retail Station In Osun

  • As Governor Aregbesola, NNPC GMD Strategize To Actualize Dream

The State Government of Osun and the Nigerian National Petroleum Corporation, NNPC are perfecting plans to put in place a state-of-the-art retail filling station that would improve the supply and distribution of petroleum products in the State and the environs.

This was the core of discussions between the Group Managing Director of the corporation, Dr. Maikanti Baru, when he received Governor Rauf Aregbesola at the NNPC Towers in Abuja on Thursday.

Baru reiterated the NNPC’s resolve to ensure that Nigerians enjoy the benefits of steady supply and distribution of petroleum products as well as working assiduously to expand its network of retail stations nationwide.

According to the GMD, Osun State government has completed a modern 26 nozzle retail station and is planning to lease it out to the corporation.

Baru added: “Our strategy for the NNPC Retail is to capture as much of the downstream retail market in the country as possible. A state like Osun is very central to our expansion drive. Having looked at the possibilities, we are committed to taking the discussions further.”

“We have reached an advanced stage in our discussions. Next week, we are expected to further discussions on commercial terms of offer with the state Government’s team,” Baru added.

He explained that the partnership would not only expand the downstream fuel distribution and retail in the state, it would also ensure adequate products availability as well as improve commercial return on investment.

Baru said, over the years, NNPC enjoyed tremendous support from Osun State as a neighboring state that hosts the corporation’s System 2B pipeline segments connecting Mosimi Depot with Ibadan, Ore and Ilorin depots.

“I am happy to inform you that over the years, we hardly record any incident of pipeline vandalism or security breach along our System 2B pipeline network that cuts across Osun State. This is attributable to the efforts of the State Government and the law-abiding people of the state,” he added.

He commended the Governor for his patriotic support during the recent fuel challenges where he constituted a Special State Taskforce to monitor fuel distribution within and across the state, a move that cushioned the effects of the hiccups on Nigerians.

Responding, Governor Aregbesola said he was in the NNPC to commend the corporation for its interest in driving development in Osun State.

“We are here to discuss collaboration on fuel distribution and possible opportunities where NNPC can invest in my state. We are progressing with the talks on the mega station and we are satisfied with the discussions so far,” Governor Aregbesola stated.

He said in order to assist the NNPC to ensure smooth distribution of petroleum products across the state, he has set up a taskforce on fuel distribution, working with the NNPC Depot in Ibadan and the marketers in the state.

“We have mandated them to do everything possible to assist the NNPC achieve its aim of ensuring smooth distribution of petroleum products across the state” he added.

While commending the corporation for getting around the recent fuel situation, Aregbesola said he was aware of the challenges faced by the corporation in its quest to ensure availability of petroleum products nationwide.

“We thank NNPC for its efforts. I am aware that you face lots of challenges. I hope the corporation will overcome those challenges, block all the leakages and ensure Nigerians don’t undergo any stress before they get products,” he concluded.

Subsidy On Petrol Reaches N1.4tn Per Year, Says FG

A total of N1.4tn is now being spent annually by the Nigerian National Petroleum Corporation as subsidy on Premium Motor Spirit, popularly known as petrol, the Federal Government has said.

Although it described the amount as under-recovery, the government stated that the national oil firm had been carrion the whole financial burden, because the NNPC is the country’s supplier of last resort when it comes to the provision of petroleum products.

The Minister of State for Petroleum Resources, Ibe Kachikwu, who opened this up while speaking at a Liquefied Petroleum Gas workshop organised by the Federal Ministry of Petroleum Resources in Abuja on Thursday, also said that the ministry planned to reveal an infrastructure rebirth map for the oil and gas sector in two months.

On March 5, 2018, the NNPC announced that it was spending N774m daily (about N23.99bn monthly) as subsidy on the 50 million litres of PMS consumed across the country.

The oil firm stated that the huge under-recovery was due to the proliferation of filling stations in communities with international land and coastal borders across the country.

On Thursday, Kachikwu echoed the fact that the NNPC was spending enormous resources subsidising petrol, as he told guests at the programme that about N1.4tn had been declared as under-recovery by the national oil firm

When asked if the N1.4tn, which he earlier mentioned in his address to participants at the workshop, was the current figure being spent by the NNPC, the minister replied, “Yes, it’s current.”

Probed further to state what the government was doing to handle the under-recovery, Kachikwu said, “Let me focus on gas. That (under-recovery) is being addressed at very high levels.”

The Group Managing Director, NNPC, Maikanti Baru, explained that the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.

Baru stated that a detailed study conducted by the NNPC indicated strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.

He said the activities of the smugglers led to the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day, which was in sharp contrast to the established national consumption pattern.

Providing a detailed presentation of the findings, the NNPC boss noted that 16 states, having among them 61 local government areas with border communities, accounted for 2,201 registered fuel stations.

He stated that the tanks of the stations had a combined capacity of 144,998,700 litres of petrol, adding that in the same vein, eight states with coastal border communities spread across 24 LGAs accounted for 866 registered fuel outlets, with combined petrol tank capacity of 73,443,086 litres.

Baru explained that because of the obvious differential in petrol prices between Nigeria and other neighbouring countries, it had become lucrative for smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the borders.

This, he said, had resulted in a thriving market for Nigerian petrol in Niger Republic, Benin Republic, Cameroon, Chad and Togo, as well as Ghana, which has no direct borders with Nigeria.

“The NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fixed retail price of N145 per litre despite the increase in PMS open market price above N171 per litre,” Baru stated.

Kachikwu had earlier told journalists that the petroleum resources ministry was planning to unveil an infrastructure rebirth map for the country’s oil and gas sector.

He said the map, which President Muhammadu Buhari is expected to unveil in the next two months, would open up the sector to investments in critical areas.

Kachikwu stated, “There is a lot more private sector investment in upstream than there is in downstream in terms of actual infrastructure, and that is why the government is more focused in upstream. We are also hoping to launch an infrastructure rebirth map for the oil sector over the next two months. And I hope the President will launch it.

“And the effect of that will be to open up tariff, create policy positions that will enable people to go in and invest in critical infrastructure that is needed. Because everywhere you look, whether it is distribution of petroleum products, it is done massively through trucks rather than through pipelines.

“Now, whether it is to take crude to refineries or whether it is being able to distribute gas all over the country, infrastructure is so key. There is a lot of stranded gas everywhere, lots of stranded power everywhere; distribution is key, infrastructure is key. We need to find a way or find enough incentives that will enable the private sector to go in very bullishly and put the money where it is supposed to be.”

NNPC Vows To Revive Nigeria’s Refineries

The Nigerian National Petroleum Corporation (NNPC) has vowed to get the nation’s four refineries back to their optimal, working capacities.

Group Managing Director of the corporation, Dr. Maikanti Baru made the promise at the weekend, shortly after receiving the Man of the Year Award from a Lagos-based daily.

According to a statement signed on Monday by the NNPC’s General Manager Public Affairs Division, Ndu Ughamadu, Baru said the corporation had been holding far-reaching discussions with some consortia to get the best funding options towards the refineries’ overhaul.

He added that the corporation, under his watch, had recorded remarkable progress in resuscitating some of the nation’s critical downstream infrastructure, a development which had ensured a seamless supply of products Nationwide, until the recent past hiccups which are now under control.

“Since coming on board, we have made the revamp of our abandoned assets and critical downstream infrastructure a key component of our corporate vision of 12 Business Focus Areas (BUFA),” he stated.

Dr. Baru said over the last few months, several crude oil, petroleum products and natural gas pipelines were resuscitated while more than half of the nation’s 21 strategic depots were also upgraded.

He, however, decried acts of pipeline vandalism, crude oil theft and sabotage which he noted had resulted in huge loss of revenue, lives and property as well as damage to the environment.

The NNPC boss, therefore, called on the security agencies and other stakeholders nationwide to collaborate with the corporation in its on-going campaign against act of sabotage on the nation’s oil and gas facilities.

While attributing the recent fuel challenges faced in parts of the country to the nefarious acts of hoarders, diverters, profiteers and smugglers, Dr. Baru stressed that the corporation was working with relevant stakeholders to ensure the sufficiency currently witnessed nationwide is sustained.

NNPC Seeking Funding  Alternatives For Refineries’ Overhaul – Baru

The Group Managing Director, Nigerian National Petroleum Corporation, Maikanti Baru, has said that the oil firm is currently in search of the best financing  options to adopt for the overhaul of the nation’s refineries.

He said the NNPC would get tired to in the search to get the refineries back to their optimal nameplate capacities.

Baru said this after receiving this year’s ‘Man of the Year Award’ from the Nigerian NewsDirect, a Lagos-based daily publication, according to a statement issued on Sunday in Abuja by the Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu.

The GMD added that as part of the ongoing reforms, the corporation had been holding far-reaching discussions with some consortia to get the best funding options towards the refineries’ overhaul.

He said the corporation had recorded progress in resuscitating some of the nation’s critical downstream infrastructure, a development that had ensured the adequate supply of products nationwide.

The NNPC boss was quoted as saying, “Since coming on board, we have made the revamp of our abandoned assets and critical downstream infrastructure a key component of our corporate vision of 12 Business Focus Areas.”

Baru noted that over the last few months, many crude oil, petroleum products and natural gas pipelines were resuscitated; more than half of the nation’s 21 strategic depots were also upgraded.

He decried acts of pipeline vandalism, crude oil theft and sabotage, which he noted had resulted in huge loss of revenue, lives and property as well as damage to the environment.

Baru called on security agencies and other stakeholders nationwide to collaborate with the corporation in its ongoing campaign against act of sabotage on oil and gas facilities.

He attributed the recent fuel challenges faced in parts of the country to the nefarious acts of hoarders, product diverters, profiteers and smugglers, and stressed that the corporation was working with relevant stakeholders to ensure the sufficiency currently being witnessed was sustained.

Nigeria Losing Revenue To IOCs Over Delayed PSC Review   

International oil companies, which entered into Production Sharing Contracts with the Federal Government more than two decades ago, are still blissing in the generous terms they got as talks of re-negotiation over the past few years have yet to materialise, ’FEMI ASU writes

The delay of the much-talked about re-negotiation of the terms of the 1993 Production Sharing Contracts between the Federal Government and international oil companies is not only stopping the government of additional oil revenue, but also creating inbalance in the nation’s oil and gas industry, our correspondent has learnt.

Industry operators and experts, who spoke with our correspondent in separate interviews, noted that the contracts were long overdue for a revisit.

The nation’s oil and gas production structure is mainly split between joint ventures, with the Nigerian National Petroleum Corporation onshore and in shallow water, and the PSCs in deep-water offshore.

Under the PSCs, the NNPC is the oil licence holder but engages oil firms as contractors that bear all risks and recover costs through a share of production at a tax rate of 50 per cent.

In September 2015, the then Group Managing Director of the NNPC, Dr. Ibe Kachikwu, who was the Vice Chairman and General Counsel of ExxonMobil Nigeria, one of the IOCs, said the corporation was set to revisit the fiscal terms of the existing PSCs entered into by the corporation with some IOCs with a view to seeking favourable benefits for Nigeria based on prevailing realities in the industry.

He said in the weeks and months ahead, the corporation would be re-negotiating the contracts as it “is allowed to make use of the window, which creates space for re-negotiation.”

“We intend to begin the process of the re-negotiation of the PSCs to see what value chain and improvements we can have from these contracts. Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,” he added.

But more than two years after, the contracts have yet to be re-negotiated.

Last week, the International Monetary Fund said it supported the authorities’ objective to ensure that the government’s take from oil exploration is appropriate.

“To that end, it welcomes the minimum royalty payment on all oil and gas production but notes that the proposed combination of price-based and production-based royalties is overly complicated and risks posing an unnecessary barrier to investment,” it stated.

Prior to the President Muhammadu Buhari administration, a former Minister of Petroleum and Presidential Chief Economic Adviser, Philip Asiodu, noted that the PSCs executed in 1993 had three re-opener conditions for re-negotiating the fiscal terms.

Highlighting the conditions, he said, “If the price of oil rose to $20 per barrel, this became a reality by 2000. If discoveries of reserves above 500 million barrels were made, this was achieved within seven years by a few consortia. In any case, after 10 years, this date was reached in 2003.”

Asiodu stated that he could see no rational explanation for not negotiating within the existing contracts to optimise the nation’s revenue up to the targets hoped for in the Petroleum Industry Bill, while waiting for it to become a law.

In 1993, the PSC was widely introduced to address some of the issues faced by the Joint Operating Agreement and to provide a suitable agreement structure for encouraging foreign investments in offshore acreage.

The Chief Executive Officer, Gacmork Nigeria Limited and ex-Chevron executive, Mr. Alex Neyin, said the contracts were lopsided in favour of the oil majors and “allow them to carry away more money.”

He said, “So, if they allow the re-negotiation to happen now, they will lose money. So why don’t you bribe and keep pushing it forward? That’s what is going on. It’s corruption. The previous PSCs were really bad agreements. I don’t know who agreed to such things.

“The bottom line is corruption. They know what is right. Everybody in the system knows what is right. But what is happening is that there is money moving under the table. So, on the basis of that, that creates inaction or delay for more money to be made by them. There is nowhere you have the sort of contracts. This is a corrupt package they call the PSCs.”

A petroleum expert, Mr. Bala Zakka, said Nigeria needed to appreciate the few oil majors that ventured to take the risk of exploring the nation’s deep-water.

He noted, “There is nothing wrong in re-negotiating the contracts but the government should not strangulate the IOCs by charging them so high. All the government needs to do is to see if there will be a little adjustment because at the end of the day, it is going to be a win-win situation.

“Over the years, some of us have noticed that some of the leaders we have, who are running the oil and gas industry, have not been consistent. They will make pronouncements about licensing round for oil fields, nothing will happen. They will say something about the turnaround maintenance of refineries, nothing will happen.”

An energy law expert and Partner, Bloomfied Law Practice, Mr. Ayodele Oni, added, “Anything that has to do with petroleum, because that is the mainstay ofthe Nigerian economy, is usually very controversial and is always filled with vested interests.

“In amending such statutory contracts, you need to carry along all stakeholders, and I am sure that’s part of the reason it is being delayed.”

He said the drop in oil prices had also been a challenge, and that the government should be careful not to scare away the oil majors.

A former Chairman, Society of Petroleum Engineers, Nigeria Council, Dr. Saka Matemilola, said there had been a lot of discussions between the IOCs and the government on the matter.

“We also need to realise that because of the uncertainty around this issue, there has been a lot of investments that have been put on hold for about 15 years now. If you look at the number of final investment decisions taken in the upstream over the last 15 years, it has been very few,” he added.

An energy expert and associate professor, University of Lagos, Dr. Ayoade Adedayo, said the government gave the IOCs generous terms to entice them to go into the deep-water space.

He noted that the re-negotiation should have been done when crude oil prices were very high.

Adedayo stated, “The government does not seem to have the political will to re-negotiate the contracts. When oil price was quite high, you refused to force them to the negotiation table. Is it now that the prices are just trying to recover that you now want to do this?

“When you say you want to re-negotiate and you don’t and nothing happens for years, you create uncertainty. It is better not to say you want to re-negotiate than to say you want to re-negotiate and fail to do it. If you want to re-negotiate and you announce it, what’s stopping you from re-negotiating?”

Last month, the Minister of State for Petroleum Resources, Kachikwu, lamented that the country had lost a lot of money to many PSCs.

Kachikwu, who stated this in Lagos during a visit to the Egina Floating Production, Storage and Offloading vessel at LADOL Free Zone, said, “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.”

“This kind of thing 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,” the minister added.

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.







Subsidy: Deregulation’ll Stop Smuggling.

Against the backdrop of the declaration by the Nigerian National Petroleum Corporation that petrol consumption had risen to 50 million litres daily, the Federal Government has been adviced  to fully deregulate the downstream sector to reduce the smuggling of Premium Motor Spirit (petrol) to neighbouring countries.

The NNPC made the announcement on Sunday that it was spending N774m daily (about N23.99bn monthly) as subsidy on the 50 million litres of PMS consumed all over the country.

The Group Managing Director, NNPC, Dr. Maikanti Baru, said the abundanc of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.

However, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, told our correspondent in a telephone interview on Monday, “You know they (NNPC) are the one bringing in the product, and they are the one that know what they are bringing. So, I think we should give them that benefit of the doubt that they know what they are saying.

“Whether 50 million is our normal consumption level or not is a different matter. But we are not in normal times; when you are coming out of scarcity, what you do is to send more to the market.”The permanent solution is to deregulate because the price in Nigeria is cheaper, he said.

“Some weeks ago, I was in Ghana and a litre of petrol was sold for 4.49 cedi, which translates to about $1.04. That’s almost N380 per litre. So, there is the attraction to smuggle. In Cotonou, it goes for about N225 per litre, which is the closest neighbour to Nigeria. So, the farther away you go from Nigeria, the higher will be the price and the incentive to smuggle,” he added.

Olawore described the nation’s borders as porous, adding that it was not easy to police the large expanse of land at the borders.

“It boils down to fear of the unknown and fear of reaction of labour and civil society groups; I think legislators are ready to support deregulation but the executive is not too keen because of perceived fear of high prices coming up later on, even if it is wrongly placed,” he noted.

The MOMAN scribe said that without deregulation, the country would continue to spend its scarce foreign exchange on importation of petroleum products and smuggling would continue.

“It also means that you are using your own foreign exchange to subsidise other countries’ consumption,” Olawore added.

Meanwhile, the Depot and Petroleum Products Marketers Association of Nigeria said it had suspended its threat to sack workers as a result of the delay in the payment of the subsidy debt owed its members by the Federal Government.

“Following the 14-day ultimatum to commence staff disengagement given to the Federal Government by the DAPPMAN in the light of over N650bn owed by Federal Government to petroleum marketers, a series of constructive engagements and meetings were held with the NNPC, Ministry of Labour, the Presidency and DAPPMAN/MOMAN,” DAPPMAN said in a statement on Monday.

The marketers said they had been reassured of the government’s commitment to make payment as evidenced by the request for approval for appropriation of same to the National Assembly.

The statement signed by the association’s Chairman, Mr. Dapo Abiodun, and the Executive Secretary, Mr. Olufemi Adewole, said, “It is our hope that this approval will be given promptly and these long overdue payments made subsequently.

“Consequently, DAPPMAN/MOMAN hereby suspend the issued 14-day ultimatum and use this medium to plead with all our staff under the various umbrella unions: NARTO, PENGASSAN, NUPENG/PTD to please bear with us while this approval for appropriation by the National Assembly is being deliberated on and processed, which we believe will not exceed two weeks in view of the adverse implications of any delays.”