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NNPC Gets $2bn Discount on Re-negotiated Contract

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NNPC
  • NNPC Gets $2bn Discount on Re-negotiated Contract

The Nigerian National Petroleum Corporation has secured a $2bn discount from re-negotiated upstream contracts being executed by its various service providers in the last one year.

The Group Managing Director of the corporation, Dr Maikanti Baru, made this known in a message to mark one year of his headship of the organisation.

In a statement by Mr Ndu Ughamadu, NNPC Group General Manager, Group Public Affairs Division, quoted Baru saying that the discount was got in the quest to continually drive down the high cost of production in the oil industry.

He said that the corporation had successfully reduced the cost of producing a barrel of crude from $27 per barrel to $22 per barrel.

In the upstream segment of the sector, he said, that cost reduction and efficiency were key features that the corporation would focus attention on.

Baru said that there had been a significant increase in crude oil reserves and production, averaging national daily production of 1.83 million barrels of oil and condensate.

He disclosed that currently, “the year-to-date 2017 average production hovers around 1.88 million barrels’’.

He said that with improvement in security and resumption of production on Forcados Oil Terminal (FOT) and Qua Iboe Terminal pipelines, average national production was expected to increase.

According to him, it will surpass 2017 target of 2.2 million barrels of oil and condensate per day.

“In October last year, the Owowo Field, located close to the producing ExxonMobil-operated Usan Field was found, and the Field’s location could allow for early production through a tie-back to the Usan Floating Production Storage and Offloading.

“The Field added current estimated reserves of one billion barrels to the national crude oil reserves.

“The corporation has grown the production of the Nigerian Petroleum Development Company (NPDC), NNPC’s flagship Upstream Company, from 15,000 barrels of oil per day to the current peak-operated volume of 210,000 barrels per day in June, 2017.

“The ownership of Oil Mining Licence, OML13, has been restored to NPDC following a presidential intervention, with first oil from the well expected before the end of the year.

“The confidence of the NNPC Joint Venture (JV) partners to pursue new projects has been rekindled following the repayment agreements for JV cash call arrears.

“The arrears were negotiated and executed for outstanding up to end 2015 by all the International Oil Company Partners,” Baru said.

He also said that gas supply to power plants and industries in the country had significantly increased.

Baru listed NNPC’s accomplishments during the period as completion of repairs of vandalised 20” Escravos-Lagos Pipeline System `A’ in August 2016 which ramped up Chevron Escravos Gas Plant supply from nil to 259 million standard cubic feet per day (mmscfd).

Another, according to him, is the completion of repairs of the vandalised Chevron offshore gas pipeline in February 2017 which took the company’s gas supply to 430mmscfd.

He said that others were the completion of repairs on vandalised 48” FOT export gas pipeline in June 2017 and inauguration of NPDC’s Utorogu NAG2 and Oredo EPF 2 gas plants.

The GMD explained that the FOT export pipeline had reactivated shutdown gas plants, including Oredo Gas Plant, Sapele Gas Plant, Ovade Gas Plant, Oben and NGC Gas Compressors.

He said that the concomitant effect of the attainments was a significant growth in domestic gas supply in the last few months.

He added that during the period, domestic gas supply increased from average of 700mmscf in July 2016 to an average of 1,220mmscfd currently, with about 75 per cent of the volume supplied to thermal power plants.

“A lot of Generation Companies, as a result, are rejecting gas due to the inability of Transmission Company of Nigeria to wheel-out the power generated”, Baru said.

He also said that since he resumed office, resources had been deployed to the Benue Trough, with exploration efforts commencing there in earnest.

”Seismic data acquisition is ongoing in the frontier region using the services of Integrated Data Services Limited (IDSL) and her partners to pursue government’s aspiration to grow the reserves base of the country.

”Drilling activities are expected to commence in Benue Trough in the fourth quarter of this year.

”We are working with the security agencies for an early return to the Chad Basin.

”Drilling activities will be a priority on resumption while continuing with seismic data acquisition with improved parameters,” he projected.

In the downstream sector, Baru explained that NNPC had stabilised the market with sufficient products available across the country through modest local refining efforts as well as Direct Supply Direct Purchase (DSDP) scheme.

According to him, the scheme has saved the nation about N40 billion in 2017.

“We have also commenced the resuscitation of our products transportation pipelines network, thus enabling us to move products to depots at faster rate and cheaper distribution costs to consumers.

“The Aba, Mosimi, Atlas-Cove and Kano depots have all been re-commissioned and are currently receiving products, thereby enhancing products availability across the country,” he said.

Baru said that under him, NNPC had improved capacity utilization of the refineries with the projection that they would attain supply of 50 per cent of non-gasoline white products, including diesel and kerosene, to the nation.

”After more than seven years of dormancy, the Asphalt Blowing Unit of the Kaduna Refining and Petrochemical Company (KRPC) was resuscitated to meet road construction needs in the country.

”Efforts are ongoing to secure third party financing to revamp the refineries to their full operational capacities,” he said.

He commended the corporation’s staff and industry’s in-house unions – Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) for their support.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).

The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.

However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.

It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Economy

Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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Economy

France, Nigeria to Build New Partnership

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France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

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