Why We Shut Down Four Oil Refineries – NNPC

 

The Nigerian National Petroleum Corporation (NNPC) has revealed why it shut down four oil refineries across the country. 

According to the Group Managing Director of the NNPC, Mele Kyari, the four oil refineries in Port Harcourt, Warri, and Kaduna were shut down because they were functioning below capacity.

Kyari who was a guest on Channels Television’s Politics Today on Wednesday stated that having ascertained that the refineries were underperforming, it became necessary to stop them from operating altogether.

“All the four refineries in three locations are shut down and it was a deliberate decision for two reasons. One is that the delivery of crude oil to these refineries is completely challenged because the pipeline network has been completely compromised by vandals and all kinds of people that will not allow us to operate these pipelines.

“That means you are not able to deliver crude oil to these refineries effectively to their maximum capacity. Secondly, what you call rehabilitation is different from the turn around maintenance. Turnaround is routine which every refinery does but when you talk about rehabilitation, it is that colossal loss of capacity in the refinery and it means you haven’t done the turnaround maintenance properly.

“Typically, every refinery is expected to operate at 90 per cent of its installed capacity. With the best of effort, with all the turnaround maintenance that has taken place, it is impossible to run any of the refineries before the shutdown at that level. Our estimate was to run it at 60 per cent of capacity but if you do that, all you are doing is value destruction. You will take $100 crude into the refinery and bring out $70 product. It doesn’t make sense.”

Outburst Over Fuel Price Increase Understandable But Misplaced

Mr Kyari also weighed in on the recent increase in fuel price, dismissing the criticism that followed the recent hike.

“The outburst is very understandable but I also believe very strongly that it is misplaced because Nigerians are not aware of the opportunities lost,” he said during an interview on Channels Television’s Politics Today on Wednesday.

According to Kyari, the issue of subsidy has been a big issue in the country for many years but the government can no longer afford it because of the economic issues facing the country.

“And not only that, every corruption that you are aware of in the downstream industry is one way or the other connected to fuel subsidy,” the NNPC boss added.

Kyari is the latest government official to defend the decision to fully halt subsidy, a decision that saw the price of fuel surge from N48/litre to N60-61/litre drawing criticism from organised labour, the opposition and many Nigerians.

But the NNPC boss insists it is the right decision.

“It requires courage to make this decision, I can share this with you. Only a Buhari regime can make this decision,” he said, insisting the move would pay off in the long run.

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According to the NNPC boss, contrary to what most people believe, subsidy is something that is beneficial only to the rich, not the average man.

“The subsidy in itself, is by every means an elitist thing and I can share this with you. It is only the elite that will have three, four, five cars in their houses, fill their tanks and also feel comfortable doing this.

“The ordinary man is not the beneficiary. First, he loses in infrastructure, hospitals are not built, schools are not built and ultimately, the brunt of the corruption in the downstream sector will be transferred to the ordinary man. So, overall, you lose everything.

“It is very understandable for people to get angry that prices have gone up. Just like the prices of every commodity, when it goes up, there can be difficulties and challenges that people will naturally face but once prices go up, the other natural thing that must happen is that your income needs to increase so that you are able to procure the things that are now delivered at higher prices.

“You can’t do this anywhere in the world if there is no productivity.

“And there will be no productivity except there is growth in infrastructural development, industries are able to work, therefore, there is a connection between production and consumption. What subsidy does is to remove that connection.

“When people get angry, this is coming from people who, practically are not aware of this situation and they are not aware of the loss that they have and most importantly they are being engineered into making those statements, and we understand this perfectly.

“We are the national oil company, it’s our role to ensure energy security. But you can’t do this until you are able to deliver cost. And that cost is lost daily as prices of crude oil goes up and you are unable to do many things”.

NNPC Opens Bid For Crude Oil Sale And Purchase

Maikanti-BaruThe Group Managing Director of Nigeria National Petroleum Corporation, Dr Maikanti Baru, says only refiners, big traders and companies with substantial investment in the oil and gas sector, will scale through the bid for the 2016 to 2017 term contracts for Nigeria crude oil sale.

A total of 224 companies are bidding for the 12 month term contracts tender, for a number of slots the Group Managing Director says will be decided on actual production focus by February 2017.

Representatives from the 224 companies converged on the amphitheater of the NNPC for the opening of the bid.

Dr Baru, who opened the bid after a test of transparency, said that the volume of crude put out for the contract bid is nearly 700,000 barrels of crude per day.

He added that the actual number of companies to emerge from the bidding would be decided in the first quarter of 2017.

The NNPC GMD also stated that Nigeria’s crude is not struggling for market, contrary to speculation but continues to earn premium, with major markets in Europe and Asia, with the United States recently added to the list.

No Plan To Increase Fuel Price, Says NNPC

DPR, Niger State, PetrolThe Nigerian National Petroleum Corporation (NNPC) on Monday said there were no immediate plans to increase fuel prices.

The Group Managing Director, NNPC, Mr Maikanti Baru, asked reporters if they “have seen any memo to that effect” insisting that there is “nothing like that in the offing.”

Reports say fuel marketers are pressing the government to remove the current gasoline price cap of 145 naira ($0.4394) per litre, as they say they are struggling to buy the fuel, which priced in dollars, and sell it in Nigeria in naira at a profit.

A press release over the weekend from former NNPC leaders called the current price cap “not congruent” given the foreign exchange rate and low crude oil prices.

“We don’t want any cap because of the fluctuations of the dollar rate in the country,” Chinedu Ukadike, Chief of Staff to the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told Reuters.

Removal of the cap would also allow the forces of supply and demand to determine the price of petroleum products, he said.

The naira plunged in value, hitting an all-time low of 420 to the dollar on the unofficial market late last month.

The Minister of State for Petroleum, Mr Ibe Kachikwu told Reuters that talks with militant groups were still ongoing, and that the country’s crude production stood at 1.6 million bpd despite force majeure declarations in place on four crude oil streams.

 

Shell Declares Force Majeure On Gas Supplies To Nigeria

Shell-petroleumShell Petroleum Development Company has declared force majeure (FM) on gas supplies to the Nigeria Liquefied Natural Gas (LNG) export facility on Bonny Island.

“The Shell Petroleum Development Company of Nigeria Ltd (SPDC) declared force majeure on gas supply to NLNG on 8 August 2016, following a leak on the Eastern Gas Gathering System (EGGS-1) pipeline through which it supplies the bulk of its gas to NLNG,” a spokesman told Reuters in an emailed statement.

SPDC, Royal Dutch Shell’s Nigerian unit, is a joint venture with state oil company Nigerian National Petroleum Corporation (NNPC). They supply gas to the LNG plant.

The declaration may impact exports from the facility, which is situated near Port Harcourt, Rivers State.

“The pipeline has been shut down for a joint investigation visit into the cause of the leak and repairs,” the spokesman said, adding that SPDC continues to supply gas to the facility through other pipelines.

NLNG, set up 16 years ago to export gas, is owned by NNPC, Shell, Total and Eni.

It has the capacity to produce 22 million tonnes of LNG a year and has long-term supply contracts with Italy’s Enel , Shell, France’s Engie SA and Portugal’s Galp, among others. It also sells on the spot market.

Down more than two-thirds from 2014 levels, spot LNG prices have been rising in recent months due to production outages in Angola and Australia.

The rally ran out of steam last week and prices declined sharply as Chevron’s Gorgon LNG project resumed production, but potentially lower output from Nigeria LNG may again tighten supply.

NEITI Audit: NNPC Failed To Remit Over $1 Billion In 2013

NEITI, NNPC, Federation AccountThe Nigeria Extractive Industries Transparency Initiative (NEITI) has accused the Nigerian National Petroleum Corporation (NNPC) of not remitting over $1 billion paid by the Nigeria Liquefied Natural Gas (NLNG) in 2013 into the Federation Account.

The Executive Secretary of NEITI, Mr Waziri Adio made the accusation at a meeting to discuss the audit reports of the nation’s extractive industries in Abuja.

According to Mr Adio, although the NNPC acknowledged remittances from the NLNG to the tune of $13 billion in the last 8 years, NNPC never remitted same to the Federation Account.

The Executive Secretary highlighted some of the key findings of the audit report and urged the Nigerians to peruse.

Some of the findings include the alleged over $1 billion remitted to the NNPC by NLNG in 2013, but was never paid into the federation account.

The report also showed that the Federal Government processed as subsidy to the NNPC N1.3 trillion in 2013, a figure that represents 26 percent of the 2013 national budget.

However, the Minister of Solid Minerals, who was represented by a Director in the Ministry of Solid Minerals, Mr Lawan Lantewa, urged the National Assembly to pass the Petroleum Industry Bill, which will address some of the recurring issues in the sector.

Meanwhile, Mr Adio maintained that there is a need for stronger synergy among government agencies to checkmate each other’s operations.

IPMAN To Partner NNPC In Ending Fuel Scarcity

petrolThe Independent Petroleum Marketers Association of Nigeria (IPMAN) has promised to work with the Nigerian National Petroleum Corporation (NNPC) and other agencies of government to help address the prevailing fuel scarcity being experienced by Nigerians.

Speaking in Abuja, the National Secretary of IPMAN, Danladi Pasali said the intervention of the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, in the lingering crisis in the association will go a long way in helping to ease the distribution challenges confronting the country.

The association said its members will be directed to operate a 24-hour service and also ensure that petrol products are sold at the government approved price.

Alleged N32 Billion Fraud: Dasuki’s Absence Stalls Trial

Sambo-Dasuki-trial-2016The trial of former National Security Adviser, Clo. Sambo Dasuki (Rtd) was on Wednesday stalled due to the inability of the prosecutors to produce him in court.

The erstwhile security chief was alleged to have refused to appear in court.

At the resumed hearing, the prosecuting counsel, Rotimi Jacobs, told Justice Baba Yusuf that Mr. Dasuki refused to be in court on the grounds that his lawyers, Joseph Daudu and Ahmed Raji, would not be in court.

He also added that he tried to convince the defendant to come to court and see how the proceedings would be conducted, but he (Dasuki) refused.

Mr Jacobs, therefore urged the court to commence trial in the absence of the defendant.

However, defence counsel, Mr Wale Balogun, urged Justice Baba Yusuf to disregard the claim of the prosecution, maintaining that as of Wednesday, Mr. Dasuki was still denied access to his lawyers.

Mr. Balogun described Mr Jacob’s claim, allegedly obtained from a third party, that Mr Dasuki’s lawyers never attempted to see him as “baseless and unwarranted”

Mr. Dasuki’s lawyer said on the contrary it was the SSS and the prosecution that scuttled the trial by their deliberate refusal to produce the defendant who has been in their custody since last year in court.

The presiding judge, in his remarks, said the case cannot commence without the defendant.

Justice Yusuf therefore adjourned the case to April 6 for the prosecution to produce the defendant in court.

‎The anti-graft agency had in the charge it filed before an Abuja High Court sitting at Maitama, alleged that Dasuki connived with the erstwhile Director of Finance in the Office of the NSA, Mr. Shuaibu Salisu and a former Executive Director of the Nigerian National Petroleum Corporation (NNPC), ‎Aminu Baba-Kusa‎, and diverted public funds to the tune of N32billion.

Two companies, Acacia Holding Limited and Reliance Referal Hospital Limited, which allegedly served as conduit pipes through which the fund was allegedly siphoned from accounts the office of the NSA operated with both the Central Bank of Nigeria and other financial institutions, were also joined as defendants to the charge.

Oil Workers Shut Down NNPC Operations Over Unbundling

nnpcOil workers have shut down the operations of the Nigerian National Petroleum Corporation (NNPC) nationwide until further notice following the unbundling of the corporation.

This decision was reached at a meeting of the Group Executive Councils of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which held on on Tuesday, March 8.

After “extensively discussing the pronouncement”, they “observed that the GMD/HMSP totally disregarded due process and failed to engage stakeholders.

“Hence, from midnight today (Tuesday, March 8), all NNPC locations will be shut down completely until further notice. Further directives will be communicated accordingly”.

Speaking in a telephone interview with Channels Television, President of NUPENG, Mr Igwe Achese, said the unbundling process was not transparent.

The Federal Government had approved the creation of seven operational units in the Nigerian National Petroleum Corporation (NNPC).

The Minister of State for Petroleum Resources, Ibe Kachikwu said that five of the seven operational units would be strictly business-driven in line with global best practices.

The new units include those for Upstream, Downstream, Gas and Power, Refineries, Ventures, Corporate Planning and Services, and Finance and Accounts.

He said each of the units would be headed by Chief Executive Officers; namely Bello Rabiu for Upstream; Henry Ikem-Onih for Downstream; Anibor Kragha (Refineries); Saudu Mohammed (Gas and Power), while Babatunde Adeniran takes charge of Ventures.

House Moves To Prevent Unbundling Of NNPC Without Legislative Approval

2016 budget-HouseThe House of Representatives has mandated a joint committee of the House to prevent the Minister of State for Petroleum from usurping the powers of the legislature by attempting to unbundle the Nigerian National Petroleum Corporation (NNPC) without legislative approval.

The motion, sponsored by Rep. Agom Jarigbe, advised President Muhammadu Buhari to send an executive bill to the National Assembly if he intends to unbundle the NNPC or carry out any fundamental reforms in the oil and gas sector.

The House also condemned the declaration by the minister describing it as the executive legislation.

Earlier, oil workers shut down the operations of the NNPC nationwide until further notice following the unbundling of the corporation.

This decision was reached at a meeting of the Group Executive Councils of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which held on on Tuesday, March 8.

After “extensively discussing the pronouncement”, they “observed that the GMD/HMSP totally disregarded due process and failed to engage stakeholders.

“Hence, from midnight today (Tuesday, March 8), all NNPC locations will be shut down completely until further notice. Further directives will be communicated accordingly”.

Speaking in a telephone interview with Channels Television, President of NUPENG, Mr Igwe Achese, said the unbundling process was not transparent.

Oil Workers Shut Down Kaduna Refinery

Refinery-KadunaOil workers have shut down the Kaduna refinery over the unbundling of the Nigerian National Petroleum Corporation (NNPC).

Our correspondent in Kaduna State said the workers have locked up the refinery gate, preventing management staff and others from entering into the refinery.

The oil workers want government to reverse the decision.

The Group Executive Councils of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), had in a meeting on Tuesday directed its members to truncate NNPC operations nationwide .

After “extensively discussing the pronouncement”, they “observed that the GMD/HMSP totally disregarded due process and failed to engage stakeholders.

“Hence, from midnight today (Tuesday, March 8), all NNPC locations will be shut down completely until further notice. Further directives will be communicated accordingly”, a statement jointly signed by the Unions said.

‘Drastic Drop’ In Activities At Depots Responsible For Scarcity – NUPENG

NUPENGThe Lagos Zonal Chairman of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr Tokunbo Korodo, on Monday attributed the return of fuel scarcity to the ‘drastic drop’ in the loading activities in the loading depot.

He noted that most of the depots have been loading well for the past one week adding that “some are even rationing”.

Speaking via a telephone on Sunrise Daily, Mr Korodo, said that when the depots run by the Nigerian National Petroleum Corporation (NNPC) are not loading well, “it gives room to the independent marketers we have at Apapa to be selling above the pump price

Mr Korodo said the unavailability of the Premium Motor Spirit is responsible for the rationing by depots across the country.

“The PPMC headquarters is supposed to pump to Ejigbo and also to Ibadan and other axis of Region 2B but they are not pumping because they don’t have enough stock.

“And if they don’t have enough stock, there depots will also be operating at a dormant capacity”, he added.

He further noted that only the PPMC can tell Nigerians what is responsible for the shortage of the product, adding that “with the way things are going, we need urgency to curtail this spread.”

“The problem is the marketers, dealers are now coming to Lagos to pick and they are ready to buy (the product) above the pump price”, he said.

No Need To Panic

The Pipelines and Products Marketing Company has asked the Nigerian populace to calm down as petroleum products will be available in the fuel stations soon.

The MD of PPMC, Esther Nnamdi-Ogbue, said that about four vessels containing 30,000 tonnes of PMS arrived in the country on Sunday and the agency is doing all it can to ensure that the product is distributed efficiently.

Queues returned to the fuel stations in the last week and many motorists have been complaining about the seeming worsening situation in fuel supply.

Reps To Investigate Alleged NAPIMS $260 Million Oil Contract

2016 budgetThe House of Representatives has mandated its Committees on Petroleum (Upstream ) and Public Procurement to investigate an alleged $260 million oil contract approved by the National Petroleum Investment Management Services (NAPIMS).

This resolution followed a debate on a motion sponsored by Rep. Gabriel Kolawole (Ondo State – APC) .

The joint committees of the House have been given a period of 4 weeks to investigate the matter and report back to the House.

NAPIMS is  a subsidiary of the Nigerian National Petroleum Corporation (NNPC).