Prof. Yinka Omorogbe, President, NAEE, has called for clarity on 30% NNPC Limited transfer of oil and gas profit to frontier exploration fund
By Edith Ike-Eboh
Prof. Yinka Omorogbe, President, Nigerian Association of Energy Economics (NAEE), has called for clarity on the 30 per cent NNPC Limited transfer of oil and gas profit to frontier exploration fund as recommended in the recently passed Petroleum Industry Bill (PIB).
Omorogbe made the call at the 14th Annual conference of the Nigerian Association of Energy Economics in Abuja on Monday.
The News Agency of Nigeria (NAN) reports that the National Assembly on July 1 passed the PIB which had raised a lot of controversy on issues of Host Community and revenue remittances.
She commended the National Assembly for the passage of the bill as it was needed for the growth of the sector.
According to her, those that have the actual figures should release them for clarity as will help to reduce the controversy related to percentages.
`”In this season of change, we cannot be left behind. We cannot be the country that remains frozen in debilitating discussions on whether or not a Bill that will provide a new legal framework for the petroleum industry must pass or not because of controversial clauses that can be amended.
“As the nation debates the Bill, it is necessary to focus on its actual contents and not on interpretations that are not always supported by fact.
“ It is important for those who can, to come out with actual numbers and eschew the present discussions on percentages, based on the perception that they refer to the same thing when in fact they do not.
“ Daily we hear about three per cent as against 30 per cent. three per cent of what? ,’’ she said
It will be recalled that according to Section 9(4) of the House draft of the PIB, the Frontier Exploration Fund shall be 10 per cent of rents on petroleum prospecting licences and 10 per cent rent on petroleum mining leases; and 30 per cent of NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing and Risk service contracts.
The fund shall be applied to all Basins and undertaken, simultaneously.
It also read in Section 9(5) NNPC Limited shall transfer the 30 per cent of profit oil and profit gas to the frontier exploration fund escrow account dedicated for the development of frontier acreages only.
Omorogbe queried how 10 per cent became 30 per cent and urged stakeholders and those involved to offer more explanation for the people to understand.
Commenting on the impact of COVID-19 on global economies, she said that the global poor were the worse hit with the pandemic
“The global coronavirus pandemic which has continued to ravage the world since early 2020 has become the world’s greatest challenge, exacerbating global poverty but serving to emphasise that there was now the need for radical change.
“An estimated 689 million people, comprising approximately roughly nine per cent of the global population, were estimated to live in extreme poverty in 2020.
“ Seventy per cent of these persons are in Africa and a hundred million of these are in Nigeria.
“ It has recently taken over from India as the poverty capital of the world, with the unenviable position of being the country with about 90 million people living in extreme poverty.
This is particularly tragic when one considers that India has over one billion people and Nigeria has 200 million,’’ she said
According to her, this appears to signify that the virus and its various mutations could be around for a while.
She called for strategic solution from participants and all stakeholders to help in creating avenue for new approach to solve the challenges as it relate the oil and gas sector.
In his welcome address. The Executive Secretary, Petroleum Technology Development Fund (PTDF), Dr Bello Gusua, said the pandemic significantly affected African countries collectively and individually.
He said that the effect was characterized by a decrease in the Gross Domestic Product (GDP) and its growth, loss of employment, increase in poverty, inflation among others.
“Although the present economic indices show a gradual stability, especially in the price of crude oil compared to last year, when the pandemic had reached its peak.
“It is clear that before we can return to the same or higher levels of GDP subsisting before the crisis, the oil and gas industry will need to evolve and adapt pertinent strategic response,’’ he said .
He added that African countries that were members of OPEC must have strategic plans to develop the sector for growth of the economies.
He assured that the PTDF intervention would continue to be available for the development of the sector.
“Today’s meeting is to explore the strategic responses to energy sector to COVID-19 and the impact on African Economies, in this wake of this new framework and thrust to normalize the road to economic stability, it is certain that capacity building will play a major role in this upward transition.
“On that note, PTDF intervention will always be available to support the industry,’’ he said (NAN)
Senate To Probe CBN’s Anchor Borrowers, Ways And Means
The Senate on Tuesday, resolved to further investigate N10trn Anchor Borrowers’ Programme by the Central Bank of Nigeria (CBN), as well as accountability in the Ways and Means loans by the Apex Bank.
The Red Chamber said the move was to plug loopholes in future development finance activities of the CBN.
The Senate resolved to set up an ad hoc committee to investigate the details of the Ways and Means, including the various intervention programmes such as the Anchor Borrowers’ Programme, monies given to state governments, manufacturers, aviation, banks, excess funding in the power sector, amongst others which raised the current debt profile of the country.
This was part of resolutions of the Senate after a debate over the report of the National Assembly Joint Committees on Banking, Insurance and other Financial Institutions (BIOFI), Finance, National Planning, Agriculture and Appropriation on the state of the economy.
On the compliance and transparency of economic actions, the Senate equally resolved that the CBN ensured compliance with the provisions of the Act in respect of Ways and Means and accountability through timely submission of its budget, financial statements and report of its activities to the President and National Assembly as stipulated in the Act.
In an extensive debate, Senator Adamu Aliero argued that some state governors, including some retired ones in the Senate, were beneficiaries of N18bn as shock absorbers under the Ways and Means since 2015.
Some lawmakers suggested that a special committee be set up to scrutinize the N30trn intervention disbursements (some of which were grants) and ways to mop them up.
Deputy Senate President Barau Jibrin also explained that the intervention monies were expended outside appropriation without the knowledge of the parliament and noted that lawmakers have a right to interrogate the expenditure.
Senator Victor Umeh, however, deferred, as he enquired to know how the money was spent before approval by the Senate. The issue of whether or not to investigate the matter raised another furore in the Red Chamber.
Senate President Godswill Akpabio thereafter maintained that owing to the current economic situation, it has become expedient to thoroughly examine the Ways and Means funds.
Oil marketers get approval to sell Dangote fuel
The seven major oil marketers in Nigeria have registered with the Dangote Petroleum Refinery for the lifting and distribution of refined petroleum products produced by the $20bn plant.
Dealers under the aegis of the Major Oil Marketers Association of Nigeria confirmed on Sunday that with the registration, they would commence the distribution of fuel produced from the facility once the commercial terms are sorted.
This came as the Independent Petroleum Marketers Association of Nigeria also revealed that they would meet with the management of the Dangote refinery this week to discuss terms of product loading.
Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria stated that PETROAN had been engaging the management of the multi-billion dollar refinery for the supply of products from the facility.
As IPMAN and PETROAN engage the refinery, major marketers who are members of MOMAN have already registered with the plant and are set to start buying products.
The seven major marketers include 11 Plc, Conoil Plc, Ardova Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited, Total Nigeria Plc and NNPC Retail.
Last Friday, the Dangote Petroleum Refinery announced the commencement of production of Automotive Gas Oil, also known as diesel, and JetA1 or aviation fuel.
The President of the Dangote Group, Aliko Dangote, had in a statement issued by the firm, thanked President Bola Tinubu for his support, encouragement, and thoughtful advice towards the actualisation of the project.
He also thanked the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, and Nigerians for their support and belief in the historic project.
“We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals. This is a big day for Nigeria. We are delighted to have reached this significant milestone.
“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects. This is a game changer for our country, and I am very fulfilled with the actualisation of this project,” Dangote stated.
The refinery, located in Lagos, has so far received six million barrels of crude oil at its two SPMs located 25km from the shore. The first crude delivery was done on December 12, 2023, and the 6th cargo was delivered on January 8, 2024.
The refinery can load 2,900 trucks a day at its truck-loading gantries. The products from the refinery will conform to Euro V specifications, according to the firm.
“The refinery design complies with the World Bank, US EPA, European emission norms, and Department of Petroleum Resources emission/effluent norms, employing state-of-the-art technology,” the company stated.
The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria.
The Dangote Petroleum Refinery is an industrial plant that transforms crude oil into various usable petroleum products such as diesel, gasoline, jet fuel, and kerosene.
Dangote Petroleum Refinery with a capacity to refine 650,000 barrels of crude oil per day covers an area of approximately 2,635 hectares in the Lekki Free Trade Zone in Lagos.
When contacted and asked whether major oil marketers would be involved in the lifting of refined products from the Dangote refinery, or whether the facility would distribute the fuel itself, the Executive Secretary/Chief Executive Officer, MOMAN, Clement Isong, replied, “I confirm that we (major marketers) have met with him (Dangote).
According to Isong, all MOMAN members have registered with Dangote Petroleum Refinery to become marketers of its products
Senate Gives Kyari, NUPRC Boss 24 Hours To Appear For Budget Defense
The Chairman of the Senate Appropriation Committee, Senator Adeola Olamilekan, on Wednesday, directed the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, to appear before the committee in 24 hours.
Olamilekan, who asked Kyari to appear in company of the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), warned that failure to appear undermines the legislature and sabotages the process.
They are required to present the list of all individual companies operating with OML licenses in Nigeria as well as total production output approved on a daily basis.
The lawmaker expressed concerns that some of the revenues required to drive the 2024 budget was attributed to the NNPCL, which according to him, was owned by the Federal Government and responsible to it, and by extension the three arms of government.
The NNPCL, had earlier shunned for a second time, summons by the Senate to appear before its committee probing over N11trn expenditure on turn around maintenance of refineries in the country between 2010 and 2023.
The absence of Kyari, whose entity is at the centre of the investigation, stalled efforts by the Senate panel to make progress on the matter.
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