NNPC Shuts Warri Refinery

Nigerian National petroleum Corporation, NNPC, has shut down the Warri Refining and Petrochemical Company, WRPC. Group General Manager, Group Public Affairs Division of the Corporation, Mr. Ohi Alegbe confirmed in a telephone interview yesterday that the Warri based plant has also been closed.

NNPC had on Wednesday announced the shutdown of Port Harcourt and Kaduna refineries because of the vandalism of its crude oil pipelines. A statement by the Corporation had informed that the plants were shut simultaneously on Sunday after the Bonny – Okrika crude supply line to the Port Harcourt Refinery and the Escravos- Warri crude supply line to the Kaduna Refinery suffered breaches.

NNPC had maintained that the Warri refinery was still on stream and producing a little above 1.4 million liters of petrol per day. However, the plant was shut because of the same breaches.

Alegbe indicated that the Corporation would not embark on repair and maintenance of the vandalised pipelines without a comprehensive report from security agencies. He maintained that NNPC was awaiting the report of the agencies to determine the next line of action.

He said adequate plans for rehabilitation would be made once the report gets to the corporation. The shutdown of the Warri plant means all the nation’s four refineries, with capacity to process 445,000 bpd have been grounded. It also means that the nation would depend entirely on importation to meet domestic demand.

Executive Director, Spaces for Change, Mrs. Victoria Ohaeri called on stakeholders, especially the Federal Government and oil companies to rise to the challenge. She called on them to put in place mechanism to effectively monitor pipelines and other facilities.

National President of Oil and Gas Service Providers Association of Nigeria, Mr. Colman Obasi, maintained that the pipeline can also be buried deeper to prevent frequent attacks. “If the pipelines are buried much deeper, it will reduce or discourage vandals from attacking them. The government should also impose stiffer penalty on vandals,” he said.

Meanwhile, Senate yesterday condemned the resurgence of pipeline vandalism in the Niger Delta region. Chairman, Senate Committee, Petroleum Upstream, Tayo Alasoadura, while briefing newsmen in Abuja, called on vandals to desist from the dastardly act, which was capable of further retrogressing the economy.

He said the act, if not stopped, could affect the efforts of the present administration to tackle poverty in the land. “It has come to the notice of the Senate, the very unpatriotic act from vandals, who have decided to blow up pipelines at this time when the nation is facing dwindling price of oil. “The Port Harcourt and Kaduna refineries only started work few months ago, so I think the vandals should stop being a clog in the wheel of progress,” he said.

Alasoadura added that it was disheartening that at a time when all hands should be on deck to revive the economy, some people were further sabotaging the efforts of the present administration. He appealed for calm, adding that relevant authorities were working assiduously to ensure that normalcy returned to the area.

Senator Bassey Gershom, Deputy Chairman, Senate Committee on Petroleum Upstream, said there was no justification for blowing up pipelines. He stressed that those involved in the act could table their grievances in a more civilised manner rather than taking the law into their own hands.

He said: “I want to appeal to our brothers in the Nigeria Delta to give peace a chance. If there is no revenue and no security, how can government govern? “So, we need the cooperation of every Nigerian, including those that are aggrieved. Let us give the Federal Government an opportunity to govern. “No matter what our grievances are, I do not think that blowing up pipelines is the solution to the problem.” In another development, the Senate Committee on Gas Resources in a bid to proffer solution to dwindling oil revenue, met with the management of the Nigerian Liquefied Natural Gas, NLNG, and other stakeholders.

Chairman of the Committee, Bassey Akpan, charged NLNG on the need to generate more revenue for government, as well as provide employment opportunities for Nigerians. Akpan further urged stakeholders in the gas sector to make known to the committee any challenge that may hinder their bid to generate more revenue and create more jobs for Nigerians.


Probing NNPC’s Crude Oil Swap Not A Witch Hunt – @SpeakerDogara

…says FG can’t afford to fail Nigerians

The Speaker of the House of Representatives, Rt. Hon Yakubu Dogara, has stated that the ‎House of Representatives investigation of the Oil Swap Agreement contract of the NNPC‎ is not aimed at witch-hunting any person but aimed at reviewing and repositioning the oil sector to make it more productive.

Speaking while declaring a public hearing by‎ the House Ad-Hoc Committee investigating the Oil Swap Agreement contract of the NNPC open at the National Assembly, Dogara said it has become imperative, with the free fall of price of crude oil in the international market, to improve on the available resources‎ and utilise the oil to drive the economy in order to stimulate development in the country.

He explained, “Our goal here is not to witch-hunt, no! It is essentially a diagnostic review with the aim of repositioning the oil sector to perform its role as a major primer of the nation’s development. ‎The issue of transparency in the management of the oil sector considering its significance to the economy of Nigeria is at the very heart of our nation’s development challenge, especially at this time of dwindling revenue resulting from the continued drop in oil prices. As at yesterday, oil, I understand, was trading at $28 dollar from about $114 it traded as at September, 2014. You don’t have to be an economist to observe that if we do not improve on the management of available resources and effective utilsation of oil/petroleum resources to drive the economy, our developmental aspirations will continue to emaciate. It is in recognition of this pivotal role which the oil sector plays in aiding development that the present House of Representatives decided to place enormous emphasis on the improvement of the sector especially, and to insist on the transparent, professional, and efficient management of all resources. This is the only way the Change Agenda of this administration can be actualise.”

‎He further explained that the essence of the investigation is to expose abuses and losses to the Nigerian nation with a view to revitalise the sector to make it more efficient and transparency driven, against the backdrop that public investment that has been made in the oil sector and the returns Nigerians have enjoyed from the sector between 2010 to date do not tally and other issues surrounding the nation’s oil management company, the Nigeria National Petroleum Corporation (NNPC).

‎”It is hard to put in words the level of frustration Nigerians have had to face with the NNPC and indeed the oil industry; the impact of this on the wider economy and the level of inefficiency in the entire energy value chain. We have an opportunity now to right the wrongs of the past. It starts from our doing a thorough job of this assignment.

“If we could pause to imagine for one moment what the effect of a vibrant oil sector driven by efficiency and innovation, would mean to the Nigeria energy sector, power, textile industry, rice mills, the manufacturing start-ups, assembly plants, manufacturing, agribusiness development in general, aviation, communication, cost of doing business, insecurity, service delivery, technology adoption, life expectancy of Nigerians both in the rural and urban areas, SMEs and unemployment, etc. The implications and ramifications are immense, indeed they are enormous. Therefore, we cannot afford to fail, Nigerians will not afford half measures.”

Attack On Escravos Gas Pipeline: Fashola Recount Losses

Multiple losses running into N470 million has been incurred over attack by militants on Nigeria’s Gas Company pipeline connected to Chevron Nigeria Limited’s facility in Escravos, Delta state.

This was revealed by Nigeria’s minister for Power, Works and Housing, Mr. Babatunde Raji Fashola who recounted the losses to the nation’s power and gas sectors in a statement signed by his Special Adviser on Communications Mr. Hakeem Bello.

Mr. Fashola stated that the 600MW Olorunsogo NIPP and other Power Plants were affected in the attack as the sabotaged gas pipeline which contributes to the Escravos Lagos Pipeline System (ELPS) has led to a loss of 160mmsfcd of gas daily.

“At a cost of $2.50 per thousand scf, this loss means about $400,000 loss to the country on a daily basis (N78,800,000 daily) in gas volume. This is in addition to losses to be incurred daily from affected Power generation ($1,988,223 or N391,680,000 daily). The total daily loss to the country is therefore estimated at N470,479,931. Repairs of the damaged pipeline is estimated as costing ($609,137 or N120,000.000).”

“The real sector of the economy has also been counting its losses as some cement companies around Olorunsogo like Ewekoro and Ibese are also affected.”

“The latest incident has occurred just as the Federal Government through the Ministry of Power, Works and Housing and the Ministry of Petroleum Resources along with allied agencies has been making concerted efforts to improve gas supplies to the Power Plants. Such efforts led to previously offline plants like Ihovbor and Sapele coming back online and the subsequent output  making up for the loss in power. The pipelines are being actively monitored for further attacks or other unforeseen impacts.” The statement reads.

Available records show that six incidences of vandalism from December 2014 to February 2015 which affected the Trans Forcados Pipeline (at Oben, Sapele, Oredo ) and Escravos Lagos Pipeline System (CNL) led to a loss of 1,100 MMScfd. According to industry experts, a loss of 200 MMscd is equivalent to a Power reduction of 700MW.

While the industry is currently generating about 4120Mwh/h on average (as at 17/01/2016), it is without doubt that performance would have been better without the additional setback caused by the weekend’s incident.

Osun Defender recalls that during the monthly meeting of the Minister of Power, Works and Housing, Mr Babatunde Fashola SAN with operators in the Power Sector last week the  Nigeria Gas Company (NGC), the Nigerian National Petroleum Corporation (NNPC) and the GACN led by the Minister of State of Petroleum, Dr Ibe Kachikwu shared information on significant gas projects that will improve gas supply which are scheduled for completion in Q2 of 2016 and also highlighted some of the challenges especially related  to security affecting delivery of gas to the power sector.

In response to this, NNPC is forming a committee NNPC, Police, JTF (which includes Army, Airfoce and Navy) and also community vigilante groups, who have been tasked with the responsibility of securing these pipelines.