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NNPC extends crude oil swap contracts by 6 months

The swap deal with these companies supplies a huge portion of Nigeria’s petroleum products.

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NNPC, Domestic Crude Allocation, Why NNPC’s Duke Oil is quitting London operations for Dubai , NNPC divests stake in four oil wells to NPDC , How NNPC discovered oil, gas deposits in the North , Nigeria to leverage on condensate refineries to be petrol net exporter, How NNPC saved $3 billion from arbitration , NNPC, IPPG donate medical supplies to South West state governments, NNPC discloses bases for employment and managerial progression in the oil firm, NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

The Nigerian National Petroleum Corporation (NNPC) has announced a 6-months extension of its contracts with private oil firms to swap crude oil for fuel.

According to a media report from Reuters, the affected oil companies renegotiated the price agreement due to changes that were made in the prices of petrol in the country.

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The initial 1-year oil swap contracts to exchange over 300,000 barrels of crude oil per day with 15 company groupings were due to expire in October 2020. The swap deal with these companies supplies a huge portion of Nigeria’s petroleum products which include fuel, diesel and jet fuel, as it has not been profitable for private oil companies to import fuel into the country.

As a result of this, the state oil giant, NNPC, has been the sole importer of fuel for quite a while.

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READ: Fidelity Bank to raise N50 billion in bonds in Q4 to refinance existing debts

Nairametrics, over a year ago reported that NNPC had contracted about 34 companies under a total of 15 groupings to carry out a swap deal for the supply of refined fuel in exchange of crude oil. This scheme was introduced in 2016 to replace the programme at that time which gulped trillions of naira in subsidy payments to importers and supplied about 90% of the fuel import requirements.

READ: FG directs 9,000 filling stations to install gas facilities

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The Federal Government recently started the implementation of its deregulation policy with its stoppage of fixing prices and allowing market forces to determine the price of petrol. This decision will eliminate the subsidy payment by the Federal Government and allow private oil companies to invest in the downstream oil sector and restart the importation of fuel again.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

FG to begin online registration, monitoring of petrol stations, depots

The DPR has stated that it will commence the remote monitoring, registration, and accreditation of all petroleum products depots.

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The Department of Petroleum Resources (DPR) has revealed that it plans to automate and begin remote monitoring, registration, and accreditation of petroleum products depots, retail outlets, and the entire downstream oil and gas industry, with the launch of the newly established Downstream Remote Monitoring Systems (DRMS).

While disclosing a statement in Abuja, the Head, Public Affairs of the DPR, Paul Osu, pointed out that the newly established Downstream Remote Monitoring Systems is expected to take off on December 1, 2020, after the launch in Abuja.

According to a report by Vanguard, Osu explained that the DRMS is a web-based solution designed to provide intelligent regulatory and inventory management system for petroleum products supply and distribution from depot to retail outlets and also as a regulatory tool to monitor retail outlets and depot activities.

He said, “Other features of the application include retail outlets accreditation and re-registration, nationwide automated product inventory management, retail outlets coordinate recording for mapping purposes and transactions management and report generation of dealers nationwide.

“The establishment of DRMS is another strategic initiative of DPR to continue to create opportunities and enable business in the oil and gas industry in Nigeria.”

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It can be recalled that the DPR had a few months ago, launched the National Production Monitoring System (NPMS), another online platform to assist the oil and gas regulator accurately monitor national crude oil production and exports, through the provision of a system for direct and independent acquisition of production data from oil and gas facilities in Nigeria

This is to ensure timely and accurate reporting of production figures and export data. This is also expected to guard against the crude oil theft that is prevalent in Nigeria’s upstream oil sector or reported cases of crude oil that is sold but unaccounted for.

The NPMS is an initiative that is developed as a replacement for the current paper-based report and ensures ready production reporting to the Federal Inland Revenue Service (FIRS) and the Nigeria Extractive Industries Transparency Initiative (NEITI) and other agencies.

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Energy

DPR approves new Liquefied Petroleum Gas guidelines for investors, operators

DPR has announced the introduction of new guidelines to accommodate more LPG investors and operators across the country.

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FG directs 9,000 filling stations to install gas facilities, FG discloses when Nigeria will start exporting petroleum products, DPR closes seven gas firms in Lagos, plans to close more

The Department of Petroleum Resources (DPR) has announced the introduction of new guidelines to accommodate more Liquefied Petroleum Gas (LPG) investors and operators across the country as part of its policy on gas.

This initiative by the oil and gas regulator is part of the measures aimed at enhancing the availability of LPG, also known as cooking gas in Nigeria, in addition to meeting the current administration’s target of 5 million metric tonnes of domestic, commercial and industrial LPG utilization in the next 10 years.

READ: Credit to Nigerian economy falls to N38.67 trillion

According to a report by ThisDay, the disclosure was made by the Zonal Operations Controller of DPR, Ayorinde Cardoso, while speaking with journalists during a public sensitization exercise on safe usage of LPG.

Cardoso stated that the federal government through the National Gas Expansion Programme was committed to making gas accessible and affordable for Nigerians.

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He said, “We have a lot of people coming into the sector to invest and DPR is on ground to ensure that they follow the regulatory requirements. We have brought out new guidelines to encourage investors and anybody that wants to operate in the sector to follow the guidelines.

“DPR is also collaborating with the Lagos state government and other stakeholders to improve safety in gas storage, sales and distribution.”

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READ: DPR releases guidelines for establishment and operations of downstream gas facilities

What you should know

Nairametrics had earlier reported that as part of its new policy on gas, DPR had moved against illegal operators of gas facilities with the shutdown of 85 LPG plants in Lagos in the last 10 months. It stated that the plants were shut down for not complying with international safety standards and operating without approval or license from the DPR.

The Federal Government had encouraged stakeholders and investors to invest in the LPG sector to accelerate the development of the domestic gas market.

READ: How to access CBN’s N250 billion intervention fund for gas sector

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It can be recalled that the FG through the Central Bank of Nigeria had set up a N250 billion intervention facility for the national gas expansion programme, with the specific target at making Compressed Natural Gas (CNG) the fuel of choice for transportation as against petrol and LPG for domestic cooking, captive power, and small industrial complexes.

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Energy

Nigeria’s 5,000 BPD refinery will produce 271 million liters of petrol every year

The operator of the newly commissioned refinery has disclosed that the facility will produce 271 million liters of petroleum products annually.

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Nigeria’s 5,000 BPD refinery will produce 271 million liters of petrol every year

Mr. Chikezie Nwosu, Chief Executive Officer of WalterSmith Petroman Oil Limited, the operator of the new refinery, has disclosed that the newly commissioned 5,000 BPD Refinery will produce 271 million liters of petroleum product annually.

This information was disclosed by Nwosu in his address during the commissioning ceremony of the 5,000 BPD Modular Refinery, in the Ibigwe Field, Imo State.

Mr. Nwosu disclosed that the refinery will refine 5,000 barrels per day of crude oil, and produce 271 million liters of petroleum product annually.

He added that since it commenced the evacuation of products in November 2020, it has already delivered 5 million liters of product into the Nigerian market.

(READ MORE: FIRS clarifies stamp duty charges, lists eligible transactions)

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While speaking at the ceremony, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote explained that the next phase of the project will be a 45,000 BPD Refinery, with a completion timeline of 24-30months. When completed, the Refinery will utilize 16 million barrels of crude oil annually.

He stressed that this is an impressive and avid step towards the board’s mandates of developing in-country capacities/capabilities to add value to Nigeria’s hydrocarbon resources.

The ES of NCDMB disclosed that the Federal Government’s target is that at least 10% of Nigeria’s crude and condensate production should be refined through modular refineries.

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What you should know

The refinery is one of the government’s investments in the oil industry, as FG’s investments in ongoing modular refinery projects so far amount to 80,000 BPD of combined modular refining capacity.

(READ MORE: Debt Management Office resumes FGN savings bond offer on August 10)

WalterSmith Petroman Oil Limited owns 70% of the Refinery being commissioned today, while the Nigerian Content Development and Monitoring Board on behalf of the Federal Government of Nigeria hold 30% equity of the refinery.

However, it is important to note that the Federal Government of Nigeria signed a Memorandum of Understanding (MoU) with the Niger Republic on the transportation and storage of petroleum products.

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Why this matters

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The refinery is a giant step towards the development of capacities and capabilities in the oil industry, especially in terms of local production of refined petroleum products.

The Refinery will strengthen local and indigenous investment in the oil industry and boost the production capacity of refined crude products in the country.

According to OPEC, Nigeria’s petroleum products import of $58.75 billion, outstrips the country’s crude oil export of $45.12 billion, at the end of 2019. This development is expected to reduce the importation of petroleum products in Nigeria.

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