- Refineries Perform Below 20% as Losses Persist
The consolidated performance of three of Nigeria’s refineries in Warri, Kaduna and Port Harcourt is below 20 per cent, the latest financial and operations report of the Nigerian National Petroleum Corporation has shown.
Similarly, the loss in revenue by each of the facilities has continued to drag despite the steady amount of crude oil they are taken it.
An analysis of the latest ring-fenced refineries performance in August 2016 as released by the NNPC showed that the precise consolidated capacity utilisation of the three refineries was 19.9 per cent.
The three refineries are the Warri Refining and Petrochemical Company, the Kaduna Refining and Petrochemical Company, and the Port Harcourt Refining Company.
The report further stated that the consolidated revenue losses of the three facilities dropped from the 5.13 per cent in July to 3.23 per cent in August.
On the individual performance of the refineries in August, the NNPC said the capacity utilisation of the WRPC was 14.28 per cent of crude oil plant capacity of 125,000 barrels per day.
The capacity utilisation of the KRPC and the PHRC was put at 18.78 per cent and 19.52 per cent, while their plant capacity was 210,000bpd and 110,000bpd, respectively.
The report stated, “The total crude produced by the three local refineries for the month of August was 359,081 metric tonnes (2.63 million barrels), compared to crude processed in July of 126,756MT (929,275 barrels).
“For the month of August, the three refineries produced 328,314MT of finished petroleum products out of 356,081MT of crude processed.”
The NNPC, however, explained that the improved capacity utilisation of the facilities was due to the success achieved by the domestic refineries.
It said, “For the first time in several months, the three refineries operated concurrently despite crude pipeline vandalism in the Niger Delta region. However, the three refineries continue to operate at minimal capacity.”
Some stakeholders in the oil and gas sector have called for the sale of the country’s refineries, while others urge the government to desist from providing incentives to the facilities.
For instance, while speaking during the Second Presidential Economic Communication Workshop in Abuja on Thursday, the Chief Executive, Economics Associates, Dr. Ayo Teriba, stated that instead of providing incentives to refineries, the government should partner private investors in joint ventures to revamp the facilities.
He said, “There shouldn’t be incentives for refineries. If incentives could not help out in the Nigeria Liquefied Natural Gas, why do you think it will work out in refineries? Government can go into joint venture with investors on refineries. It opened up the space in the telecoms sector and we know how that sector has grown. It should do so for refineries.”
In the road map for the oil and gas sector tagged Seven Big Wins unveiled recently by President Muhammadu Buhari, the Federal Government stated that it would spend between $1.4bn and $1.8bn to rehabilitate the country’s refineries within two years in a bid to reposition the industry.
It stated that the rehabilitation would be carried out with the participation of the private sector as the road map represented the short and medium-term priorities to grow the Nigeria’s oil and gas industry from 2015 to 2019.
Part of the implementation strategy of the road map is for the government to ensure integrity assessment of all existing refineries and formulate investment plans to refurbish the facilities and improve their capacities.
The government, in the report, said the short-term objective within two years would be the execution of a comprehensive rehabilitation programme under private sector participation to improve operations and increase capacity utilisation.
Nigeria, Morocco sign MOUs on Hydrocarbons, Others
The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.
Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.
The statement said Nigeria would also produce ammonia and export to Morocco.
“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.
The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.
Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.
He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.
He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.
“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.
According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.
Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.
The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.
The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.
Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.
He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.
“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.
Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021
Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.
The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.
Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.
This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.
“Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.
“That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.”
Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.
“If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.
UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?
Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.
Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.
“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.
“He is raising taxes under the radar.
“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”
Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”
Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.
Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.
“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses. This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”
He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”
The deVere CEO concludes: “The Chancellor had to perform a tough juggling act. But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”
News3 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin2 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
News1 week ago
U.S. COVID-19 Deaths Hit 500,000
Economy2 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
Economy3 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Bitcoin1 week ago
Bitcoin Rebounds To $50,881 Per Coin on Wednesday
Cryptocurrency4 weeks ago
Why CBN Bans Banks from Facilitating Cryptocurrency Exchanges
Banking Sector2 weeks ago
Banks Turning Female Marketers to Sexual Slaves – Senator