Connect with us
nairametrics

Energy

NNPC says local operators must improve capacity to achieve low cost of oil production

The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.

Published

on

NNPC unveils covid-19 contacts tracing app, marketers to buy petroleum products online

The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.

This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.

According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.

Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.

Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.

GTBank 728 x 90

He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse.”

The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.

He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.

GTBank 728 x 90

The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.

The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.

The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.

Jaiz bank ads

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]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Energy

Petrol price to increase further, FG to add strategic reserves’ management cost

The pump price of petrol may be witnessing an increase as FG is set to add to it, strategic reserves’ financing cost.

Published

on

IPMAN, PPPRA, NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

There could be a further increase in the retail pump price of petroleum products like petrol, kerosene and diesel.

This is due to the Federal Government’s proposal of the addition of the cost of managing the national strategic stocks of petroleum products to the retail price of the commodities.

READ: Petrol supply drops by over 23% due to decline in consumption

According to a report from Vanguard, this proposal is contained in the 2020 Petroleum Industry Bill (PIB) which is currently before the National Assembly for passage.

This means that the passage and subsequent signing into law of the PIB, will lead to further increase in the pump price of petrol. Other things being equal, as the cost of managing the national strategic fuel stocks would, from then, form an integral component of the pricing template of petroleum products and would determine the pump price of the commodities.

GTBank 728 x 90

READ: Local refining; A panacea for Nigeria’s reliance on imported refined products

Other current components of the pricing template, apart from the landing cost include the National Transportation Average (NTA), the Nigeria Ports Authority (NPA) charges, marketers margin and transportation costs.

In the new PIB that is before the National Assembly, the new Nigerian Midstream and Downstream Petroleum Regulatory Authority that would emerge from the scrapping of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF), is to be saddled with the responsibility of setting up and managing the national strategic stocks of petroleum products.

GTBank 728 x 90

READ: #EndSARS: IPMAN warns of looming fuel scarcity across the country

The new agency would determine the amount to be charged as a levy for financing the strategic petroleum products’ reserves. Which would form part of the retail price of each of the petroleum products, and also mandate to work with security agencies in deciding areas of the country where the national strategic stocks would be maintained and distributed. The 2020 PIB partly reads;

  • The Authority shall: establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products in accordance with regulations issued by the Authority.
  • Determine and publish the amount to be charged as a levy for the financing of the national strategic stock, which shall form part of the retail price of each petroleum product, such levy to be determined as a percentage of the retail price and be deducted on a wholesale basis.
  • And designate, in consultation with the appropriate authorities and national security agencies, the strategic locations across the country where the national strategic stocks shall be distributed and maintained.”

READ: FG clamps down on filling stations, others for faulty measuring and weighing equipment

The PIB is also proposing that facilities and infrastructure which are to be specifically defined by the soon-to-be-established Nigerian Midstream and Downstream Petroleum Regulatory Authority for the storage of national strategic stocks would be exempted from the provisions of the law relating to open access.

The other functions of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in the new PIB include; regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria, and determining appropriate tariff methodology for processing of natural gas, transportation and transmission of natural gas, transportation of crude oil, and bulk storage of crude oil and natural gas.

Jaiz bank ads

READ: DAPPMAN highlights critical role of warehousing and logistics in growth of downstream sector

Fidelity ads

What this means:

This is going to add more financial burden to Nigerians who are already complaining of the high cost of petroleum products, which has negatively impacted on the price of goods and services.

It can be recalled that the Federal Government had some time ago proposed a new charge on petroleum products for road maintenance across the country. This was roundly condemned by Nigerians and some stakeholders before the idea was later suspended.

Continue Reading

Appointments

TCN MD, Sule Abdulaziz appointed Chairman of West Africa Power Pool

The acting Managing Director of TCN, Sule Abdulaziz, has been appointed the new Chairman of WAPP.

Published

on

TCN MD Abdulaziz, four other directors receive appointment letters

The acting Managing Director of Transmission Company of Nigeria (TCN), Sule Abdulaziz, has been appointed the new Chairman of the Executive Board of West African Power Pool (WAPP). Abdulaziz was nominated by the former Managing Director of Power Holding Company of Nigeria (PHCN), Joe Makoju, who is an honorary member of WAPP.

READ: NNPC signs gas development and commercialization deal with SEEPCO

This disclosure was made by TCN’s General Manager, Public Affairs, Mrs Ndidi Mbah, through a public statement in Abuja on Thursday, October 22, 2020.

In her statement, Mbah revealed that the West African Power Pool was created by Decision A/DEC.5/12/99 of the 22nd Summit of the ECOWAS Authority of Heads of State and Government, and adopted during the 29th Summit of the ECOWAS Authority of Heads of State and Government held in Niamey, Niger.

READ: Indian firm, Ramco signs partnership deal with Nigerian airline

GTBank 728 x 90

The appointment was made during the 46th meeting of the WAPP Executive Board which was chaired by the Secretary-General of ECOWAS, Ki Sengui, and held through video conference on October 21.

The statement from Mba partly reads, “While making the nomination, Makoju noted that Abdulaziz is an expert in engineering with vast experience in the electricity sector and therefore will perform creditably as the new WAPP Executive Board Chairman.

READ: Continental Reinsurance Plc acquires 100% ownership of its Botswana subsidiary

GTBank 728 x 90

“His proposal was endorsed by MDs and Director Generals and other members of the board,” she said.

According to the statement, Abdulaziz in his acceptance speech thanked the board members and the honourary members for his nomination as the Chairman of the board and assured them of his total commitment to the overall objective of the regional electricity body.

READ: A bitter family feud has continued to hamper this company’s growth

He also expressed the need to move the pool to the next level of operational efficiency and solicited the support of member utilities, especially members of the executive board in this regard.

Explore Data on the Nairametrics Research Website 

Jaiz bank ads

He urged members to ensure prompt payment of their contributions to the pool and also continue to collaborate actively with the secretariat to ensure effective and efficient coordination and implementation of all WAPP programmes.

Fidelity ads

Continue Reading

ENDSARS

#EndSARS: IPMAN warns of looming fuel scarcity across the country

Published

on

#EndSARS: IPMAN warns of looming fuel scarcity across the country, Update: Fuel scarcity looms as NUPENG directs Tanker drivers to withdraw services in Lagos

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned of a looming petroleum scarcity in the country, following attacks on fuel tankers and the disruption of depot operations across the country by hoodlums who had hijacked the #EndSARS protests.

READ: #EndSARS: Access Bank announces N50 billion interest-free facility for businesses

This disclosure was made by the Chairman of IPMAN in Rivers State, Dr. Joseph Obele, while speaking on a live radio program in Port Harcourt on Friday, October 23, 2020.

Obele disclosed that about 10 petroleum tankers belonging to its members were attacked and destroyed across the country by these hoodlums during the protests, although he noted that there had been no fatalities.

READ: DPR cautions IPMAN against PMS diversion  

GTBank 728 x 90

He said the scarcity of petroleum products could be inevitable if the situation failed to improve before filling stations exhausted their stocks.

Obele said, “About 10 of our trucks have been attacked nationwide by protesting youths, although there have not been casualties.

READ: #EndSARS: Feminist Coalition raise Cryptos worth $126,000

GTBank 728 x 90

“Supply and distribution of petroleum products haven’t really been smooth, reason arising from the fact that 90% of our supply came from Lagos and there has been a skeletal supply schedule in Lagos for the past one week.

“Thursday’s case was worse, [as] all the depots in Nigeria were shut down. We don’t produce these products; we buy from depots and tank farms, and if these depots do not give us products, we fear that when we run out of stock, petroleum scarcity will happen.”

READ: #EndSARS: Coca-Cola donates N20 million to cover medical bills of victims

Backstory

Recall that the #EndSARS protest against police brutality and extra-judicial killings, which started peacefully about 2 weeks ago, was taken over by hoodlums who meted out violence with the looting and destruction of public and private properties across the country. This has also led to the loss of lives and disruption to socio-economic activities.

Jaiz bank ads

Explore Data on the Nairametrics Research Website 

Fidelity ads

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
Stallion ads
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement