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Oil Industry: PIB Tops Stakeholders’ Concerns



  • Oil Industry: PIB Tops Stakeholders’ Concerns

The nation’s oil and gas industry could get back on its feet this year, according to industry experts, if the critical issues such as the passage of the Petroleum Industry Bill and the concerns in the Niger Delta are properly addressed, ’FEMI Asu reports.

With another year gone without the passage of the Petroleum Industry Bill, industry experts have expressed concern that the bill may suffer serious setback as electioneering kicks off ahead of the 2019 elections.

A key obstacle to the growth of the Nigerian oil and gas industry has been widely described as the regulatory uncertainty caused by the delay in the passage of the PIB.

The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.

Currently before the 8th National Assembly, it was split into four parts — Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill — to fast-track its passage into law.

The Senate on May 25, 2017 passed the PIGB, with its President, Dr. Bukola Saraki, saying in September that the upper chamber was working to ensure the passage of the other bills in the fourth quarter of last year.

The Chairman, National PIB Committee, Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers, Mr. Chika Onuegbu, stated that the Senate promised to pass the other aspects of the PIB in the first quarter of 2018.

He said, “It is our hope that they will deliver on that promise. Let them see what they can do to make sure that the public hearing on the remaining three bills are done to ensure the passage of the bills in Q1 2018, so that we will know that by Q2, the pressure will be on the President to assent to those bills.

“For Nigerians and those in the industry, we want to see the passage of a PIB that actually addresses the concerns of stakeholders and move the industry forward. We hope that the President and his team should fast-track the reform in the industry by ensuring that the PIB actually becomes law latest by the second quarter because thereafter, politics will take over every other thing that we will do as a country.”

Onuegbu said the outlook for the industry looked bright considering the recent rally in global oil prices.

“So, the next thing is about production, and that is where the issues around the Niger Delta come in; that is where the policies of the Federal Government come in, so that Nigeria will continue to benefit from the gradual recovery in oil prices,” he added.

An energy expert and associate professor, University of Lagos, Dr. Ayoade Adedayo, said, “The outlook does not look all that bright. Although last year, the minister (Kachikwu) was able to get through his policy documents — the national petroleum policy and national gas policy – the problem is that until we pass the PIB, we are still in the same rot, and while we remain in the rot, the industry will not recover; the transparency, governance and investment concerns will continue to haunt us.”

He decried the lack of investment in exploratory activities in the industry in recent years, saying, “If the rig count in a country is low, it shows the country is not healthy, and I think that the health of the sector should be a big concern to all the policymakers.”

“My concern is that because we are moving already into the territory of national elections, there is no way the National Assembly people will be focused enough to drive this legislation through,” Adedayo said.

The Vice President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, said the industry had gone through a lot in recent times, adding, “The key things we are looking forward to in 2018 are regulatory changes. We expect all the various bills that are at different stages to gain some traction.

“I think people are interested in marginal fields bid round but financing the acquisitions is going to be a challenge.”

The Chief Executive Officer, Gacmork Nigeria Limited and ex-Chevron executive, Mr. Alex Neyin, who stressed the need to create an enabling environment for investors, expressed concern about the management of the industry.

He said, “My major concern is that they don’t have the right people to manage the industry. As long as the government is focusing more on what it can get, they are going to be in trouble. It is very unfortunate that we find ourselves in this mess.

“When you don’t have a defined policy, investment in the industry will be difficult. People want to see clear, definite policies so that when they invest money, they know when they get return on their investment.”

According to an energy expert and Partner at Bloomfield Law Practice, Mr. Ayodele Oni, there is too much vested interest in the PIB.

He said oil production would likely remain high for most of the year with the government trying to impress ahead of the 2019 elections.

“Insurgency may commence in late 2018 in the Niger Delta in a bid to discredit the government ahead of the elections,” he added.

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


Electricity Consumers Get 611,231 Meters Under MAP Scheme



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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed



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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN



petrol Oil

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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