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Economy & Politics

NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

The Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.  

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To cushion against the volatility in the global crude market and strengthen profitability, the Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.

This is one of several measures the corporation is taking to sustain revenue generation for Nigeria, and cope with the boom and bust cycles which are gradually becoming a feature of the global crude oil market.

NAN reports that this was contained in a statement from the Corporation Chief Operating Officer, Ventures and Business Development, Mr. Roland Ewubare, and signed by NNPC Spokesman, Kennie Obateru.

According to Ewubare, the NNPC will establish Independent Power Plants using the Ajaokuta-Kaduna-Kano (AKK) pipeline network, and consolidate its presence in the power sector.

(READ MORE: COVID-19: Nigerians react as CBN partners NNPC to feed, accommodate Nigerian returnees)

The statement reads in part; “NNPC is creating an energy company that would have portfolios in renewable energy; we have initiatives on solar that is ongoing.

“We have got biofuels agreements with some state governments that would soon be activated. We do have a lot of non-core businesses that are aggregated under the Ventures and Business Development Autonomous Business Unit of the NNPC. 

“This would be expanded through effective collaboration and partnership with the private sectors,” 

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NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

Lower costs, more profits

As part of moves to improve profitability, the NNPC also announced plans to drive crude oil production cost down to 10 dollar per barrel by Q4 2021,

This according to the statement would be done by systematically and gradually beating down logistics costs.

The Corporation’s revenue took a major hit in 2020 due to the slump in global oil prices, and this in turn affected the Nigerian budget given that oil proceeds account for a significant fraction of her income.

“When you have a low commodity price regime, as the case now, the only way we are able to squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the GMD’s aspiration to push for a 10 dollar per barrel cost of production,” Ebuware said.

Stanbic 728 x 90

(READ MORE: NNPC pipeline vandalism up by 50% in January, may suspend crude oil production)

There is also an ongoing collaboration with selected partners to commercialise flared gas in order to preserve the flora and fauna of the country.

This would be done by converting it to Compressed Natural Gas (CNG) and Liquefied Natural Gas, for sale to consumers.

The NNPC is partnering with private developers to reduce the housing deficit in the country and also partnering with medical centres to provide innovative healthcare for Nigeria.

 

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Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career.As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

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    Business News

    Financial Autonomy: Governors, State Speakers reach agreement

    The Governor also said that the final document of the agreement should be ready for implementation by May 2021.

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    The Governors’ Forum, Conference of Speakers of State Legislature and other governance stakeholders announced that they reached a resolution over the implementation of financial autonomy for State Legislature and Judiciary.

    This was disclosed by the Ekiti State Governor and Chairman Nigeria Governors’ Forum, Kayode Fayemi, after the meeting, which was held in Abuja on Monday, and presided by the Chief of Staff to the President, Prof. Ibrahim Gambari.

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    “We are here for legislative and judicial autonomy and Governors; Speakers of State Assemblies and the Judges of the States are on the same page as far as this issue is concerned,” he said.

    We just emerged from a meeting with the Solicitor General of the Federation, the representatives of the judiciary and those of the Conference of Speakers and we are all in force; an agreement has been reached.

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    The issue is about implementation. There has been no objection from governors on judicial and legislative autonomy.

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    The Governor also said that the final document of the agreement should be ready for implementation by May 2021 and urged striking workers  to return  to offices “because as far as this has gone, we have met with all the parties concerned and the President, through his Chief of Staff, has been monitoring what has been happening.”

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    Nairametrics reported earlier this month that members of the Judiciary Staff Union of Nigeria (JUSUN) went on strike with the closure of Federal High Courts in different states across the nation. The union said the purpose of the strike was to draw attention to the financial autonomy of Nigeria’s Judiciary.

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    The Minister of Finance, Zainab Ahmed, has called on Governments on all levels in Nigeria to control spending amid decreasing revenues and urged for prudent government spending. The Minister also denied claims that the Federal Government printed N60 billion as top-up for March FAAC numbers.

    The Minister disclosed this in an interview on Monday and warned that the FG was not generating enough revenue to align with its spending habit.

    READ: UK to return £4.2million seized from Ibori to Nigeria

    Zainab Ahmed added that the FG would maintain its stance from January 2021 to end total fuel subsidies in Nigeria, and confirmed talks with organised labour on subsidy removal.

    “As a nation, the Federal, State and Local governments must review expenditure patterns. We are spending too much and we are not generating enough,” she said.

    READ: Resolving the global debt and liquidity crises, issues and possible solutions

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    Nairametrics reported last month that the Debt Management Office had announced that Nigeria’s public debt at end of 2020 was N32.915 trillion. The DMO said the sum of the debt included the Debt Stock of the Federal and State Governments, as well as the Federal Capital Territory.

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