- OML 11 Licence Not Revoked, NPDC Becomes Operator May 2
The licence of a joint venture partner in Oil Mining Lease 11 has not been revoked as speculated but stakeholders are concerned about the recent presidential directive on the operatorship of the oil block, OKECHUKWU NNODIM reports
The licence for Oil Mining Lease 11 has neither been revoked nor withdrawn from Shell Petroleum Development Company, rather the operatorship of the oil block was transferred from the SPDC to the Nigerian Petroleum Development Company.
Senior officials from the Federal Ministry of Petroleum Resources and others in the OML 11 joint venture explained that the directive from President Muhammadu Buhari to the Group Managing Director of the Nigerian National Petroleum Corporation, the parent firm of NPDC, was that the operatorship of the block should be taken over by NNPC.
Sources familiar with the issue told our correspondent in Abuja on Friday that aside from the fact that the process of getting back the licence for such oil block was tedious, the joint venture partners in OML 11 were not just NPDC and SPDC.
They stated that two other international oil companies, Total and Agip, were also partners in the oil block.
This came as stakeholders in the oil sector expressed concern over the presidential directive and urged the Federal Government to be more transparent in handling the matter.
The media reported on Wednesday that Buhari had ordered the NNPC to take over the operatorship of the entire OML 11 from the SPDC.
According to a letter from State House, Abuja to the Group Managing Director of NNPC, dated March 1, 2019, with reference number SH/COS/24/A/8540 and signed by the Chief of Staff to the President, Abba Kyari, the President’s directive was clearly stated that the entire operatorship of OML 11 should be taken over by the NNPC/NPDC not later than April 30, 2019.
The NPDC is the flagship oil exploration and production subsidiary of the NNPC and the liaison office of the company acknowledged the receipt of the letter on March 5, 2019.
The letter from the Presidency to the NNPC, which had its title as, ‘Operatorship of Entire Oil Mining Lease 11,’ read in part, “Kindly note that the President has directed NNPC/NPDC to take over the operatorship from Shell Petroleum Development Company of the entire OML 11 not later than 30 April 2019 and ensure smooth re-entry given the delicate situation in Ogoniland.”
It added that the President has “directed NNPC/NPDC to confirm by 2 May 2019 of the assumption of the operatorship.”
Following the presidential directive, it was widely speculated that the President had withdrawn the licence of Shell, but this was refuted by partners in the JV as well as informed officials at the FMPR.
“What the directive of the President is all about is operatorship. The letter is very clear that operatorship should be transferred from one party of the JV to another party. I’ve seen a copy of the letter and it did not talk about the licence. There is no mention of withdrawal or revocation of licence in that letter,” an official in one of the firms in the joint venture, who spoke to our correspondent in confidence, said.
An official at the FMPR also stated that “whoever says the letter mentioned withdrawal or revocation of licence is just being unnecessarily sensational about that letter because there was nowhere in the letter where such was mentioned. The letter is very clear that operatorship should be given to another party.
“How can you operate if you are revoking the licence? If you withdraw the licence, who will operate the field? This is because you have to go through another round of processes before you can get the licence. Shell and NPDC are not the only partners; Total and Agip are also involved.
“So the licence is held on behalf of the partners and as we speak, the holder of the licence on behalf of the partners now is NPDC, of course. If the licence was revoked, do you think the NPDC will continue to run the asset? People don’t understand the scope of OML 11. They think OML 11 is just Ogoniland. No, that’s just a small fraction.”
OML 11 lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. In terms of production, it is one of the most important blocks in Nigeria.
The terrain is swamp to the south with numerous rivers and creeks. Port Harcourt is located in the northwest of the block, while the major yard and logistics base at Onne is located by the Bonny River. The Bonny oil terminal – the largest in Nigeria – and Nigeria LNG are both located in Bonny.
When asked to comment on the issue, the Group General Manager, Group Public Affairs Division, Ndu Ughamadu, told our correspondent that he had not seen the document and had received no briefing on the matter and so would not comment.
“I’ve not sighted it, neither have I been briefed. Until I sight the authentic document and I’m briefed on it, that’s when I will comment on it,” Ughamadu said.
In their reaction, the Movement for the Survival of the Ogoni People faulted Buhari’s order to the NNPC to take over the operatorship of OML 11 in Ogoniland from SPDC.
MOSOP specifically said it had resisted attempts by anybody to resume oil production in Ogoniland without consulting the people of the area.
MOSOP President, Fegalo Nsuke, who made this remark, said it was wrong for Ogoni’s resources to be taken away and shared without involving Ogoni people.
Nsuke, who insisted that he was not a factional president of MOSOP, said, “It is unfair for us as Nigerians to live in a country and they (government) will take away our resources and share it amongst themselves. They take away our land and leave us with nothing; when we protest, they kill us.
“They (government) take a crucial decision without consulting with the Ogoni people, we disapprove of that and strongly kick against that. We have resisted the decision from the outset. We should be part of such a critical decision; we cannot live in a country where everything will be taken away from us and we will be left only to bear the consequences of oil production.”
Also, the Lagos Chamber of Commerce and Industry called on the Federal Government to be transparent on how it handled the matter.
The Director-General, LCCI, Muda Yusuf, told our correspondent that the government needed to make more facts about the matter public.
He said, “We need to have the facts about this matter. All the facts must be laid on the table concerning the movement of operatorship of OML 11 from Shell to NNPC. Now, did the government say it was taking it over because Shell couldn’t operate it? Of course, not.
“So I go back to my point that the government needs to explain further in the spirit of transparency that this government has been preaching. The reasons behind this decision need to be clearly stated and put in the public domain to avoid misinformation or to avoid people misconstruing the intention of the government.”
Yusuf observed that there had been concerns as to whether due process was followed in the transfer of operatorship of OML 11, adding that this was why the government needed to provide further explanations.
He added, “The reasons must be put on the table and it must also be established that due process has been followed. I am sure there must be some procedure in taking over the operatorship of such asset. So, was that procedure followed?
“We are a country that is guided by rules, regulations and standards through which we manage such very strategic assets. So, I think all the processes should be examined and, therefore, there is a need for proper disclosure and circumstances that have led to this decision.”
He, however, noted that the issue must not be politicised, adding that “for those who think this has to do with politics, my word to them is to ask for more information; we need to hear from government and Shell.”
On his part, the leader of Conscience of Ogoni People, Gani Topba, said although Buhari took the right decision, the NPDC must reverse all actions it had taken concerning the drilling of oil in Ogoniland.
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.
Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom
The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.
Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.
The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.
The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).
Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.
Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.
“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.
The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.
The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.
This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.
The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.
Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.
Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.
OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.
The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.
ICPC Says Nigeria Loses $10bn to Illicit Financial Flows
The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).
Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.
The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”
The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”
He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.
The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.
“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.
Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.
The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.
Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.
He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.
Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.
The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.
They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)
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