- Refineries: NNPC, Financiers Negotiate Abroad
Top management officials of the Nigerian National Petroleum Corporation have met with financiers abroad to further negotiate terms for the proposed rehabilitation of the nation’s refineries.
Nigeria has four refineries. The Port Harcourt Refining Company is made up of two refineries. The others are the Warri Refining and Petrochemical Company and Kaduna Refining and Petrochemical Company.
The four refineries have an installed capacity of 445,000 barrels per day but they have continued to operate far below the installed capacity for many years.
In fact, the refineries lost a total of N68.12 in the first half of this year due to their sub-optimal operations, according to the latest data from the NNPC.
The Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, told our correspondent that efforts were ongoing to revive the refineries, adding that top management staff of the corporation travelled abroad recently to negotiate with financiers.
He said, “Efforts are on. The financiers have been approved and discussions are ongoing with them. But the local refineries, Port Harcourt and others, are operational. When they don’t have the supply of crude oil, they won’t operate at a given level. But now the systems are in a good place.
“However, we are still negotiating with the financiers. If you have to put your money in an investment, there must be a series of discussions and negotiations because the financiers are bringing in the resources that we will use for the rehabilitation. That is the level we are in right now.”
He added, “Also, the top management of the corporation went abroad two weeks ago to further discuss with the financiers. The financiers have been chosen by the board, but I don’t have the details right now.”
On the names of the financiers, the GGM stated that negotiations were still ongoing between the NNPC and the investors.
He, however, assured our correspondent that the identities of the investors would be released in due course, adding that one of the major targets of the corporation was to revive the refineries.
The NNPC, in its quarterly publication for the fourth quarter of 2017, stated that about 30 would-be financiers had submitted expressions of interest after a widely publicised bid.
It said for a start, it had gone back to the original builders of the refineries, namely 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, Anibor Kragha, was quoted in the publication as saying that the original builders had actually started conducting studies to determine the cost of fixing the plants and returning them to the minimum capacity utilisation of 90 per cent.
Meanwhile, data obtained from the NNPC in its monthly reports for January to August 2018 showed that the average consolidated capacity utilisation of the refineries for the specified period was 11.93 per cent.
The August 2018 report is the most recent operational monthly performance report of the refineries released by the NNPC.
The consolidated capacity utilisation of the refineries in January was 10.89 per cent; February, 13.94 per cent; March, 14.41 per cent; April, seven per cent; May, 20.66 per cent; June, 20.66 per cent; July, 4.83 per cent; and August, 3.02 per cent.
Further analysis showed that in January, the combined capacity utilisation of WRPC, PHRC and KRPC was 10.89 per cent, while their individual capacities were zero per cent, 20.61 per cent and 4.7 per cent respectively.
This implies that the Warri refinery did not refine any quantity of crude oil in January this year, while Port Harcourt and Kaduna refineries processed 183,022 metric tonnes and 21,855MT respectively.
The combined capacity utilisation of the facilities moved up marginally to 13.94 per cent in February. This time, Kaduna refinery processed no crude, while Warri and Port Harcourt refined 39,448MT and 197,453MT respectively.
The individual capacity utilisation of Warri, Port Harcourt and Kaduna refineries in February was 8.26 per cent, 24.62 per cent and zero per cent respectively.
A cumulative performance of 14.41 per cent was recorded for the refineries in March despite the dormancy of both Port Harcourt and Kaduna during the month under review.
The Warri refinery was the only plant that processed crude oil in March, as it achieved a capacity utilisation of 51.32 per cent.
The combined performance of the refineries crashed severely in April, dropping to as low as seven per cent. Warri refinery was worse hit as its capacity utilisation plunged from the 51.32 per cent recorded in March to 3.36 per cent in April.
While Kaduna refinery stayed dormant in April, Port Harcourt moved up to 12.84 per cent.
The refineries recorded a consolidated capacity utilisation of 20.66 per cent in May, as WRPC, PHRC and KRPC posted 46.55 per cent, 14.93 per cent and zero per cent respectively.
In June, the facilities had a consolidated capacity utilisation of 20.66 per cent. Individually, their capacities were 27.04 per cent, 27.68 per cent and zero per cent for WRPC, PHRC and KRPC respectively.
In July, their consolidated performance dropped to 4.83 per cent, as both Port Harcourt and Kaduna refineries processed no crude and posted zero per cent capacities, while Warri recorded a capacity utilisation of 17.19 per cent.
In August, which is the month with the most recent update for the refineries, their combined capacity utilisation dropped further to 3.02 per cent.
Port Harcourt and Kaduna refineries maintained their dormancy in August, as only Warri refinery processed crude but its capacity utilisation plunged to 10.75 per cent.
However, the Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf, did not see any reason why the government, through the NNPC, would want to spend more funds on the refineries.
He said, “I think the government should just disengage from all this refinery business and any other business that is not a social activity. It should disengage completely, as these businesses are not functioning properly because of governance and corporate governance problems, political interference and more.
“And for as long as these businesses remain within the domain of the public sector, they can’t function well. If they function at all, they can’t function efficiently. So the best thing is for the government to just let go and sell them to the private sector.”
Yusuf added, “So, the advice is that the government should encourage private sector players to take over the downstream segment of the petroleum business. The government should only play a regulatory and not an operational role.
“Government has no business refining petroleum products, retailing or distributing fuel. It should desist from such because there are more important things to do that have a social impact. Look at our educational system, health sector, roads and rail, those are areas the government should channel its attention to.”
US Senate Passes $1.9 Trillion Stimulus Package
US Senate Passes $1.9 Trillion Stimulus Package
President Biden’s $1.9 trillion economic stimulus plan would have far-reaching effects on society as the country tries to turn the corner on a pandemic that has killed more than half a million people in the United States.
The mammoth bill approved by the Senate on Saturday would provide direct payments to Americans, extend jobless benefits and provide a huge financial infusion to states and local governments as well as to schools to help them reopen. It provides funding for priorities like coronavirus testing and vaccine distribution. And it amounts to an ambitious antipoverty program, offering significant benefits for low-income people.
Here’s a guide to what’s included in the plan, which is scheduled to go before the House for final approval on Tuesday and then would head to Mr. Biden for his signature.
The bill would give out $1,400 stimulus checks.
Individuals making under $75,000 and married couples making under $150,000 would receive direct payments of $1,400 per person. The bill would also provide $1,400 per dependent.
The payments would gradually decrease above those income levels and disappear entirely above an income cap: $80,000 for individuals and $160,000 for married couples.
Those caps were lowered from the thresholds in the House’s version of the stimulus plan, which set the cutoffs at $100,000 for individuals and $200,000 for married couples.
The current $300-per-week boost to unemployment benefits would continue.
The Senate bill extends unemployment programs through early September, including the $300-per-week federal supplement provided in the last stimulus plan passed in December.
Mr. Biden had proposed bumping up that supplemental benefit to $400 per week, which the House agreed to, but the Senate kept it at $300 weekly.
The Senate bill also includes a provision intended to avert surprise tax bills for people who lost jobs, waiving federal income taxes for the first $10,200 of unemployment benefits received in 2020 for households earning under $150,000.
The child tax credit would become more generous, among other benefits.
For 2021, the bill would temporarily expand the child tax credit, which is currently worth up to $2,000 per child under 17. Under the legislation, the tax credit would be as much as $3,600 for children up to age 5 and as much as $3,000 for children 6 to 17.
The bill would make the full value of the credit available to low-income people who are currently ineligible or receive only a portion. And for the second half of this year, it would have the federal government send advance payments of the credit to Americans in periodic installments, akin to a guaranteed income for families with children.
The legislation would also expand the child and dependent care tax credit for 2021, and it would expand the earned-income tax credit for workers without children for this year as well. Through 2025, it would exempt student loan forgiveness from income taxes.
Money would go to fight the pandemic and to help states, local governments and schools.
The bill would provide funding for vaccine distribution as well as coronavirus testing, contact tracing and genomic sequencing. It would give money to the Federal Emergency Management Agency as well.
It would provide $350 billion for states, local governments, territories and tribal governments, and it contains about $130 billion for schools. It also includes funding for colleges and universities, transit agencies, housing aid, child care providers and food assistance.
In addition, the bill contains funding to help businesses, including restaurants and live venues, and it includes a bailout for multiemployer pension plans that are financially troubled.
The Affordable Care Act would get a boost.
The bill would temporarily increase subsidies for people purchasing health insurance through the Affordable Care Act’s marketplaces. It includes billions of dollars for public health programs and veterans’ health care.
It also seeks to help those who have lost jobs keep the health insurance coverage they had through their employer, covering the full cost of premiums through a federal program called COBRA through September.
One thing missing: a minimum wage hike.
As part of the stimulus plan, Mr. Biden wanted to raise the federal minimum wage, which is now $7.25 per hour, to $15 per hour.
The stimulus bill passed by the House would increase the wage to $15 per hour by 2025, but the Senate parliamentarian said the provision violated the strict rules that Senate Democrats had to follow to pass the bill through a special process that shielded it from a filibuster and allowed for its approval with only Democratic support. A vote in the Senate on Friday to add the wage increase back to the bill failed.
The Senate bill also dropped funding for a rail project in Silicon Valley in Northern California and a bridge between upstate New York and Canada, two provisions that were included in the House bill and drew criticism from Republicans.
Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020
Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.
In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.
Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.
This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).
Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.
Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.
The energy company made another payment of US$17.935 million in fee for 2020.
While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.
Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.
Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.
FIRS Sets N5.9 Trillion Revenue Target for 2021
FIRS to Generate N5.9 Trillion Revenue in 2021
Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.
Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.
According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.
However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.
He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.”
Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.
“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.
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