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NNPC Engages Original Builders to Revamp Refineries

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refineries
  • NNPC Engages Original Builders to Revamp Refineries

The Nigerian National Petroleum Corporation said it had engaged the original builders of the refineries in Port Harcourt, Warri and Kaduna, in a bid to return them to at least 90 per cent capacity utilisation before the end of 2019.

Nigeria has four refineries with an installed capacity of 445,000 barrels per day, but they have continued to operate far below the installed capacity for many years.

The corporation, in its quarterly publication for the fourth quarter of 2017, obtained by our correspondent, said it was working in tandem with the Ministry of Petroleum Resources and other stakeholders to implant a novel refining model and other strategies that would restore the refineries and expand existing capacities to record levels.

The reform, according to the NNPC, also seeks to entrench a self-sustaining financial model with near zero reliance on the Federal Government funds.

The publication noted that the Group Managing Director, NNPC, Dr. Maikanti Baru, recently inaugurated eight committees charged with the express directive to return the refineries to their nameplate capacities by 2019.

It said, “To encourage seamless work flow and underscore the crucial nature of the task ahead, the committees are headed by a steering committee, chaired by the GMD. Other committees are: rehabilitation, stakeholder management, financing, legal, procurement, pipeline and crude oil supply and security as well as staffing and succession planning.

“For a start, the corporation has gone back to the original refineries’ builders, which are the JGC Corporation of Japan for Port Harcourt Refinery, Italy-based Snamprogetti, for Warri Refinery and Japan-based Chyoda, for Kaduna Refinery.”

The Chief Operating Officer in charge of the refineries and petrochemicals autonomous business unit, NNPC, Mr. Anibor Kragha, was quoted as saying that the original builders had actually started conducting studies to determine the cost of fixing the plants and returning them to minimum capacity utilisation of 90 per cent.

He said once the final coating was achieved, the corporation would move in swiftly to perfect the proposed funding option and execute the upgrade of the plants within a 24-month window ahead of the 2019 deadline of the Federal Government for zero fuel import.

According to the corporation, already, about 30 would-be financiers have submitted expressions of interest after a widely publicised bid.

It said an inter-ministerial committee, including the NNPC, ministries of Finance and Petroleum Resources, the Department of Petroleum Resources and the Bureau of Public Enterprises, was currently working round the clock to evaluate the bidders.

“In principle, the new financing preference is engineered to feast on the funds provided by the financiers to upgrade the refineries and still make some money, no matter how marginal, which would be an improvement as the refineries are currently not making any,” the publication stated.

The Group Executive Director and Senior Technical Adviser to the Minister of State for Petroleum Resources on Refineries and Downstream Infrastructure, Mr. Rabiu Suleiman, said, “What the model seeks to achieve is to bring in investors who are ready to bring their money and get compensated in due course without government or the NNPC bringing its own resources.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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