The Nigerian National Petroleum Corporation (NNPC), has given condition for the relocation of some tank farms and petroleum products depots from their present location.
The state oil giant specifically advised against a swift relocation of tank farms from their current locations along Ijegun, Kirikiri areas in Lagos and other parts of the country in order to avoid disruption in the supply and distribution chain of petroleum products across the country.
This was disclosed during NNPC’s submission during a hearing by the House of Representatives’ Ad-hoc Committee on Relocation of Tank Farms in Residential Areas of Ijegun and Kirikiri are made available to the public through a press release by the NNPC Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru.
In the statement, Obateru quoted the Group Managing Director of NNPC, Mallam Mele Kyari, as saying that NNPC was not averse to the relocation of the petroleum products tank farms and depots sited in residential areas but would advise that some time be allowed to achieve the full rehabilitation of the refineries and the completion of the Dangote Refinery to enable the nation move away from fuel importation before their relocation.
It would be recalled that in August last year, the residents of Satellite town, Amuwo Odofin Local Government Area, had during their protest to the Governor of Lagos State, Babajide Sanwo-Olu, demanded the immediate relocation of the tank farms in the residential area.
During the protest which lasted for hours, the residents which include retired civil servants, septuagenarians asked for the relocation of the tank farms and even the container terminals so as to prevent further loss of lives and property within the area which was designed as a residential area by the Federal Government.
The tank farms have disrupted the drainage system, damaged the roads within the community and even converting roads to parking lot by tankers.
The GMD who was represented by the corporation’s Chief Financial Officer, Mr. Umar Ajiya, told the committee that the tank farms and depots were a major artery for receiving and distributing imported petroleum products to all parts of the country and that their abrupt relocation could trigger a crisis not only in the Downstream Sector but also in the nation’s economy in general.
Kyari in his submission said, “We are not opposed to the yearnings of the communities or the relocation of the tank farms and depots, but we want it to be done in phases because of the huge financial commitments by the stakeholders. If they are relocated abruptly, even the banking sector would be affected because of the loans they granted for the establishment of the depots.’’
Speaking earlier while inaugurating the Committee, the Speaker of the House of Representatives, Hon. Femi Gbajiabiamila, said the Ad-hoc Committee was set up to investigate the concerns expressed by the residents in order to have a fair assessment of the situation.
Hon. Gbajiabiamila who was represented by the House Deputy Minority Leader, Hon. Tobi Okechukwu, acknowledged that tank farms and depots were a critical component of the Downstream Petroleum Sector and assured that the House would look at the issue holistically and take appropriate decision in the public interest.
The speaker expressed his disappointment at the inability of NNPC to distribute petroleum products through the pipelines due to incessant vandalism which has made product distribution by tankers over long distances a hazard to other road users and the society at large.
The committee which is Chaired by Hon Segun Ogun, was set up following petitions by the residents of Ijegun, Kirikiri and other areas in Lagos State on the dangers posed by the operations of depots and tank farms to their respective communities which are strictly residential areas.
Nigerian firm set to raise $1.2 billion to purchase electricity meters
MAPCo plans to raise N480 billion to purchase electricity meters and to help the DISCOs plug revenue gaps in their operations.
A Nigerian firm, Meter Assets Finance and Management Company (MAPCo), has concluded plans to raise N480 billion ($1.2 billion) over the next 3 years, to purchase electricity meters and help the electricity distribution companies (DISCOs) plug revenue gaps in their operations.
This is also in line with the Federal Government’s initiative to ensure that all electricity consumers are metered, which will put an end to estimated billing by the DISCOs.
According to a report from PricewaterhouseCoopers, less than one-tenth of Nigeria’s 41 million households have their electricity consumption metered, and half of those are faulty. As a result, distribution companies have to estimate bills, resulting in constant conflict with the consumers that delay payments.
The Chief Executive Officer of New Hampshire Capital, Onion Omonforma, said the Meter Assets Finance and Management Co. hopes to end the practice of estimated billings by raising funds to purchase and supply meters to consumers.
New Hampshire Capital, FBNQuest and Kairos Investments Africa are helping to package and structure the venture, known as MAPCo, for investors to either buy equity or inject debt into the company.
What they are saying
Omonformaa said, “The electricity distribution firms will then have the money to go back and buy more meters and the cycle continues, paving the way to close the metering gap. MAPCo will collect the cost of the meters from consumers at a premium over the next 10 years. The meters will be handed over to the power-distribution companies once paid off.’’
While disclosing that MAPCo plans to issue a N100 billion bond in the next year, Omonforma also pointed out that roadshows have been planned for the U.S. and Europe, and will include local institutional investors.
He said, “We envisage that a lot of people who are looking for a long-term instrument will key into it,”
It can be recalled that apart from repealing the estimated billing methodology in determining tariffs for electricity consumers; the Federal Government had insisted that all consumers must be metered, as part of the condition for a tariff increase.
Also, as part of the agreement reached with the organized labor in respect of the tariff increase; the Federal Government disclosed that the National Mass Metering Programme will be accelerated, with the distribution of 6 million meters to Nigerians for free.
What this means
A huge number of electricity consumers across the 36 states and the FCT are still unmetered by their respective DISCOs. This initiative by MAPCo will help bridge the existing gap, with more electricity consumers acquiring a prepaid meter and doing away with the controversial estimated billing.
N1.5trillion accumulated losses of NNPC, a serious going-concern risk – PWC, SIAO Partners
The auditors of NNPC have raised doubts over the inability of the Corporation to continue as a going concern following rising and humongous losses.
According to the recently published 2019 Audited Financial Statements, the Nigerian National Petroleum Corporation (NNPC) Group and Corporation had an accumulated loss of N1.9 trillion and N474 billion respectively. The Auditors of NNPC, made up of Pricewaterhouse Coopers, SIAO Partners, and Muhtari Dangana & Co. have raised serious doubts over the inability of NNPC to continue as a going concern following rising and humongous losses, resulting in the negative capital base.
In their report, the auditors disclosed that there is an existing material uncertainty that casts significant doubts on the ability of the NNPC to escape bankruptcy – as there are serious impairments on the company’s ability to generating sufficient revenues to meet its immediate obligations as at when due.
What you should know
- In its joint report to the stakeholders, the auditors gave an unmodified opinion and drew attention to the fact that the NNPC Group and Corporation recorded net losses of N1.8 billion and N107.8 billion respectively in 2019, compared to N803.1 billion and N254 billion in 2018 respectively. While its current liabilities exceed its current assets by N4.4 trillion and N1.1 trillion for the Group and Corporation respectively, compared to N3.3 trillion and N968.7 billion in 2018 respectively.
- NNPC Group and Corporation’s current assets, according to the financial statements, stood at N5.3 trillion and N4.5 trillion in 2019, while total current liabilities stood at N9.7 trillion and N5.6 trillion respectively.
- In 2018, NNPC Group and Corporation’s total current assets stood at N5.4 trillion and N4.8 trillion respectively, while total current liabilities stood at N8.7 trillion and N5.7 trillion respectively.
- The accumulated losses according to the financial statement are approximately N1.5 trillion and N474 billion, compared to N1.6 trillion and N490.7 billion for the Group and Corporation in 2018 respectively.
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What to expect
- The Management of the corporation is currently executing robust mitigation procedures, as it is receiving the requisite support from the Federal Government to ensure that the Group and Corporation have adequate resources to continue in operational existence for the foreseeable future.
- To make the Group and Corporation commercially viable, the Federal Government had commenced the elimination of cost drivers responsible for the accumulation of the shortfalls in settling Domestic Crude Obligation; and the introduction of the Price Modulator mechanism in the Petroleum Products Pricing Regulatory Agency (PPPRA) template, designed to eliminate the major cause of the losses.
- The Federal Government is also minimizing breaches to the country’s pipeline networks; pursuing the passage of the Petroleum Industry Bill, PIB, and its implementation, which would restructure the petroleum industry, improve transparency and governance, and also give the NNPC the autonomy to operate profitably.
- The NNPC Management further revealed the plans to recapitalize the NNPC with steps to resolving all the outstanding related party payables and receivables and enable a clean slate start prior to recapitalization.
FG to inject over N198 billion on capital projects in power sector in 2021
The Federal Government plans to inject N198.27 billion on various capital projects in the power sector across Nigeria in 2021.
The Federal Government plans to inject N198.27billion on various capital projects in the power sector across Nigeria in 2021.
This was disclosed in the 2021 Appropriation Bill, which President Muhammadu Buhari presented to the National Assembly recently.
* National rural electrification, managed by the Rural Electrification Agency, will invest a total of N17.86billion on power infrastructure development in rural communities.
* The Nigerian Electricity Regulatory Commission plans to invest N294.1million on capital projects, while capital projects to be handled by the Nigerian Electricity Management Services Agency will gulp N441.1million.
* The allocation for capital projects to be handled by the Transmission Company of Nigeria, as contained in the proposed budget, is N4.69billion.
* The capital outlay projected for 2021 by the Nigeria Electricity Liability Management Limited is N914.87million, while the National Power Training Institute targets to invest N294.1million.
* The total overhead for the entire ministry and its agencies was N1.16billion.
* The amount budgeted for personnel in the power ministry and its agencies is N4.9billion.