Court Orders NNPC Fund To Pay Retirees N500 Million

The National Industrial Court on Monday ordered the Nigerian National Petroleum Pension Fund Limited to pay N500 million to the Nigerian National Petroleum Corporation (NNPC) pensioners who retired prior to 2004.

Presiding Judge, Justice Maureen Esowe gave the order while delivering judgment in a case filed by one Moshe Amaechi and three others on behalf of the pre-2004 retirees of the NNPC.

They had filed the suit in December 2011 to challenge the non-payment of their reviewed pension arrears, approved by the NNPC Board in 2009.

The claimants had also urged the court to declare that the N500 million was meant for the retirees who retired on or before December 31, 2004, of which the claimants are part.

During the hearing of the case, the defendant had submitted that the claimants did not represent the interest of all the affected retirees.

The NNPC had urged the court to dismiss the suit on the grounds that the claimants had no common interests and grievances. The commission also urged the court to hold that the claims were not beneficial to all the retirees.

The claimants’, however, submitted that the money was meant for the pensioners, who retired prior to 2004 and not for all the pensioners as alleged by the defendant.

They also argued that the defendant had no constitutional right to tamper with the pension, as approved by the relevant authority.

In her judgment, the judge held that the claimants had legal standing to institute the action since they were affected by the action of the defendant and that they were entitled to the N500 million.

The judge ordered that the N500 million approved and released by the board of the NNPC be distributed among the pensioners who retired on or before December 31, 2004.

We Have Plans To Curb Pipeline Vandalism – Madueke

The Minister of Petroleum Resources, Diezini Allison-Madueke

The Minister of Petroleum Resources, Mrs. Deziani Allison Madueke has announced plans of collaboration with relevant security agencies in tackling issues of pipeline vandalism and oil theft in the country.

Mrs. Allison, who spoke with newsmen after a meeting with the Chief of Naval Staff, the Minister of Transport, Director General of the Nigeria Maritime Safety Administration and representatives from the Nigeria Police Force described crude oil theft and pipeline vandalism as a menace which must be tackled head on.

Recently, the Managing Director of the Pipelines and Products Marketing Company, Mr Haruna Momoh gave assurance that the agency is set to bring to an end the incessant vandalism of petroleum products’ pipeline.

Diezani Denies Manipulating PIB To Empower Self

The Minister of Petroleum Resources, Deziani Alison-Madueke has disputed the position being put forward by some lawmakers that the proposed Petroleum Industry Bill (PIB) gives too much power to her office.

The minister stated her position while speaking with journalists after a meeting with senate members which was said to be a technical briefing on the Petroleum Industry Bill to clear areas of doubt.

The petroleum minister in her presentation said in line with the deregulation drive of the PIB, the Nigerian National Petroleum Corporation (NNPC) will be unbundled to create a world-class National Oil Company (NOC) fashioned against the globally recognised models as Petrobras and Petronas.

She also said the section of the PIB which grants a 10 per cent equity advantage to oil-bearing communities from the net profit of oil companies operating in the areas is not new and have been captured in past bills which failed to become law.

Pipeline Vandalism: Suspects Ask Court To Grant Them Bail

Suspects charged to court over the alleged vandalism of the Arepo pipeline and the murder of three NNPC officials have asked the Federal High Court sitting in Lagos to grant them bail.

Trials commenced on Friday, 25th January at the Federal High Court in Lagos.

The 6 accused persons on the 5th of September, 2012 at about 6:00 p.m., at Arepo,  allegedly conspired to vandalise an Nigerian National Petroleum Corporation (NNPC), oil pipeline located in the vicinity and in the process murdered three employees of the NNPC.

They were subsequently arraigned on the 29th of November, 2012, where they all pleaded not guilty to a seven count charge preferred against them by the police.

Four of six suspects charged with the offence have asked Justice Mohammed Idris to grant them bail pending the determination of their case.

The suspects are facing a seven count charge which also includes the murder of three engineers of the NNPC.

Defence counsel argued that Some of the accused persons are in poor health and would need to seek treatment.

Prosecuting counsel has however told the court that even the first son of one of the accused was killed in the recent Arepo pipeline explosion.

He argues that the offences carry capital punishments and urged the court to refuse to grant bail and instead use the case to send out a message that offences of this nature should not be treated lightly.

After listening to the arguments of both lawyers, justice Idris has adjourned ruling till the 11th of Feb.


NNPC fails to remit N726bn To Federation Account in 3 years

The Financial Audit Report of the Oil and Gas sector by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the Nigerian National Petroleum Corporation (NNPC) failed to remit the sum of $4.84 billion (N726 billion) to the Federation Account between 2009 to 2011.

The amount is made up of dividends and loan repayments from the NLNG export business in the stated period. This is in addition to a further $3.99 billion in NLNG funds from previous years going back to 1999, the audit report said.

The report also disclosed that the Nigerian National Petroleum Corporation (NNPC) had claimed a total of N1.40 trillion as subsidy payments directly from proceeds of domestic crude sales before remittance between 2009 and 2011.

NEITI said it would further investigate NNPC’s rapidly escalating fuel import subsidy bill, which the audit showed rose from N198 billion in 2009 to N786 billion in 2011.

The report further stated that the subsidy payments claimed by the NNPC increased by 110 per cent. It rose from N198 billion in 2009 to N416 billion in 2010.

The Audit report also revealed that the NNPC owes the federation account N1.305 trillion from crude oil sales in the three-year period as at December 2011.

The state-oil firm receives 445,000 bpd of crude oil to refine locally but only uses 20 percent of it because Nigerian refineries are in disrepair. The rest it sells, the audit said.

NEITI said NNPC then removes subsidy from the money it earns from the crude oil sales before sending the balance to government accounts, a practice the auditor said the government should change because it left “gaps in the process”.

The report further revealed that Nigeria is owed around $5.85 billion in underpaid taxes and royalties from oil and gas producers but did not name specific companies because some firms are seeking legal action on the alleged debts.

NEITI is a government agency that operates as part of a global EITI scheme to investigate and monitor the extractive industry.

The also revealed that a total of $143.5 billion (about N21.5trillion) was earned by Nigeria as revenue from the sector between 2009 and 2011. The sum amounts to about five times the nation’s budget for the year 2013.

The monies were earned from sales of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, Petroleum Profit Tax and companies’ income tax.

Other areas that contributed include earnings from Pay As You Earn (PAYE), Value Added Tax (VAT), dividends and repayment of loan by the Nigeria Liquefied Natural Gas (NLNG), contributions to the Niger Delta Development Commission (NDDC) and the Education Tax Fund (ETF).

At the formal presentation of the independent audit report on Thursday, the Chairman of the National Stakeholders Working Group of NEITI, Mr. Ledum Mitee said the report was commissioned in line with Section 16 of the NEITI Act.



Arepo Pipeline Has Been Repaired- NNPC GMD

 The Group Managing Director of  the Nigerian National Petroleum Corporation (NNPC), Mr Andrew Yakubu, has visited the site where a renewed attack on the System 2B Pipeline at Arepo occurred barely a month after it was fixed following a fire caused by products thieves who had ruptured the pipeline in August 2012.

The Acting Group General Manager Group Public Affairs of the Corporation, Ms Tumini Green, in a statement made available to journalists disclosed that product thieves hacked at the pipeline again yesterday causing fire that reportedly killed 3 persons.

Mr Yakubu says “The Corporation is appalled by the repeated attacks on the pipeline at the same spot in Arepo in Ogun State, barely months after a similar attack last year, causing the corporation a hard time effecting repairs as a result of security issues”.

“The ripple effect was the hardship in product distribution which was responsible for the emergence of long queues at fuel stations across the country in the last quarter of 2012”.

He however says repairs have been affected and supply will resume immediately through the line.


FG to retrieve N1.3 trillion from NNPC, multi-national companies

The National Extractive Industries Transparency Initiative (NEITI) has revealed the plan to recover the sum of N1.3 trillion from the Nigerian National Petroleum Corporation (NNPC) and other multi-national companies.

Chairman of NEITI Board, Ledum Mitee.

The Federal Government’s bid to recover its debt owed by the NNPC was contained in a statement issued at the end of the NEITI retreat in Abuja.

The statement quoted the President as pledging that an inter-ministerial task team would be charged with the responsibility of ensuring the full implementation of NEITI audit report findings.

President Jonathan stated that the task team would comprise high-ranking government officials as well as government agencies that are saddled with either the responsibility of collecting or managing Nigeria’s oil and gas revenue.

Jonathan described NEITI as an important anti-corruption agency in the oil and gas sector whose report, findings and recommendations should be implemented to set the tone for the oil and gas sector.

The President again re-assured the nation that his administration has no intention to “cover up any ascertained misdeeds revealed by various fact-finding panels and probes in the extractive industry.”

President Jonathan also disclosed that he had given necessary directives to all Ministries, Agencies and Departments of government and all companies covered by NEITI activities that NEITI should be given “open and unrestricted support” to carry out its statutory functions in view of the strategic importance of the role of NEITI to the transformation agenda.”

Also speaking at the workshop, the Executive Secretary of NEITI, Mrs. Zainab Ahmed disclosed that NEITI’s latest industry audit reports in the oil and gas sector that covered the period 2009 to 2011 and the first NEITI audit report in the solid minerals, which covered 2007 to 2010 would be released to the public simultaneously before the end of the year.

Chairman of NEITI Board, Ledum Mitee, said NEITI would henceforth fully exercise its power under Section 3(f) of the NEITI Act that requires it to monitor and ensure that all payments due to the Federal Government from all extractive industry companies, including taxes, royalties, dividends, bonuses, penalties, levies and such like, are duly made.

He added: “For example, previous NEITI audit reports have identified potential revenue loss due to under-assessments/underpayments by covered entities amounting to over $9.8 billion or N1.3 trillion by the existing exchange rate.

“NEITI can no longer sit down and watch and allow these recoverable funds in the hands of the companies at a time the Federal Government is searching for funds to finance the deficits in the annual budgets.”

He read the riot act to defaulters, saying no entity would be spared the full weight of the law in case of defaults.

He said that the body would  “invoke relevant sanctions under Section 16 of the NEITI against any company found to have rendered false information or failed to provide statements of accounts as at and when due to NEITI Industry Auditors especially in the reported cases where this resulted in under-payments and under-assessments and huge revenue loss to the Federation Account.”

Mitee stated that the relevant statutory sanctions should be invoked against relevant government agencies identified to have willingly frustrated the implementation of remedial issues in NEITI audit reports over the years.

Mitee sought the collaboration of anti-corruption agencies in the renewed bid at ensuring complying with the provisions of the law and enthronement of accountability and transparency in the nation’s oil and gas sector.

Nigeria lost N28.73 billion in oil cut prices- Ribadu committee

A total of $183m (N28.73bn) in signature bonuses paid by oil companies to the federation is missing, according to a confidential report seen by Reuters.

A team headed by the former Chairman, Economic and Financial Crimes Commission, Mallam Nuhu Ribadu, produced the 146-page study based on the Ministry of Petroleum Resources’ request. It covers the year 2002 to 2012.

The report said that Ministers of Petroleum Resources between 2008 and 2011 handed out seven discretionary oil licences, but that $183m in signature bonuses was missing from the deals.

Three of the oil licences were awarded since the current minister, Mrs. Diezani Alison-Madueke, took up her position in 2010, according to the report.

“I have not given any discretionary awards during this administration,” Alison-Madueke told Reuters, although she added that the President had the right to do so instead of using bids if he saw fit.

“That is entirely up to him,” she said.

Alison-Madueke, told Reuters on Tuesday that she received the report last month but that it was a draft and the government was still supposed to give input.

The one seen by Reuters was labelled “Final Report.”

The report concluded that oil majors, Shell, Total and Eni, made bumper profits from cut-price gas, while oil ministers handed out licences at their own discretion. This, while not illegal, did not follow best practice of using open bids.

Hundreds of millions of dollars in signature bonuses on those deals were also missing, it said.

“We have not seen this report and are, therefore, unable to comment on the content, but we will study it if and when it is published,” a Shell spokesman said.

The report alleges international oil traders sometimes buy crude without any formal contracts, and the state oil firm, the Nigerian National Petroleum Corporation, had short-changed the Nigerian treasury billions over the last 10 years by selling crude oil and gas to itself below market rates.

There was no suggestion that the oil majors or traders had done anything illegal, but the report highlighted a lack of transparency in their dealings in a nation rife with graft.

“It is a draft,” Alison-Madueke said. “There will be some areas where the government … may have a slightly different opinion … (and) will put its point of view to the committee.”

She said she expected the final report to be with President Goodluck Jonathan within two weeks.

Ribadu’s probe was among several set up following a week of nationwide strikes against a rise in fuel prices in January, which morphed into a campaign against oil corruption.

Billions of dollars of revenue was missing in unpaid debts from signature bonuses and royalties, the report found.

Nigeria LNG, a company jointly owned by the NNPC, Shell, Total and Eni, had paid the country for gas at cut-down prices before exporting it to international markets, the report said.

Total and Eni declined to comment because they invest in but do not operate Nigeria LNG, the role played by Shell.

“The estimated cumulative of the deficit between value obtainable on the international market and what is currently being obtained from NLNG, over the 10-year period, amounts to approximately $29bn,” the report said.

It also said foreign oil firms had outstanding debts.

Addax, now a unit of China’s state-owned Sinopec, owes Nigeria $1.5bn in unpaid royalties, part of a $3bn black hole of unpaid bonuses and royalties owed by oil firms.

Addax did not respond to requests for comment, but the report noted it disputed owing the signature bonuses.

Shell owes the Federal Government N137.57bn for gas sold from its Bonga deep offshore field, the report said, while oil majors owed $58m between them for gas flaring penalties. They were also not adhering to newer higher fines.

The probe also said Nigeria was the only nation to sell all its crude through international oil traders rather than directly to refineries, adding that such trades were often opaque.

It said some international oil traders who were not “on the approved master list of customers” had been sold crude oil “without a formal contract” so little could be obtained about the details of these deals, which could be worth hundreds of millions of dollars.

“This logically will serve to reduce margins obtainable on sale of crude oil,” the report said.

But Alison-Madueke disputed this, saying there were no informal contracts and there was “an official tender put out every year,” which could be seen by the public in newspapers.

The state oil firm gets an allocation of 445,000 barrels per day of crude oil to refine locally, but it has been selling itself this oil at cut-down prices, a practice which cost Nigeria $5bn in potential revenue between 2002 and 2011, the report said.

“NNPC buys at international rates,” Alison-Madueke retorted.

The report said the NNPC made N86.6bn over the 10-year period by using overly generous exchange rates in its declarations to the government. There was no sign of the money.

Among the report’s recommendations were that parts of NNPC be reorganised or scrapped, an independent review of the use of traders be set up and a transparency law be passed requiring oil companies to disclose all payments made to Nigeria.

United States regulators put new rules in place in August that will require US-listed oil and gas companies to disclose payments they make to foreign governments like Nigeria.


Shell declares force majeure on Nigeria gas supply

Royal Dutch Shell’s Nigerian joint venture Shell Petroleum Development Company of Nigeria (SPDC) on Friday declared force majeure on its gas supply after an attempt to steal crude oil from a pipeline led to a fire, the company said in statement.

SPDC supplies natural gas to Nigeria Liquefied Natural Gas (NLNG) for exports overseas as well as to domestic power plants.

The stakeholders in Nigeria LNG are state-run energy firm NNPC with 49 percent, Shell (25.6 percent), Total (15 percent), and Eni (10.4 percent).

SPDC, a 100 percent-owned subsidiary of Shell, operates a joint venture in which the Nigerian National Petroleum Corporation (NNPC) holds 55 percent, Shell 30 percent, Elf Petroleum Nigeria Ltd (EPNL) 10 percent, and Italy’s Agip 5 percent.

NNPC blames fuel scarcity in Lagos on vandalised Arepo pipeline

The Nigerian National Petroleum Corporation (NNPC) is blaming the current fuel scarcity in the country on the vandalisation of the pipeline at Arepo village.

Manager Public Affair, Omar Farouk Ibrahim, said “the pipeline at Arepo carries between 10 million and 11 million litres of fuel per day to Lagos and its environs and some part of the states in the North.”

He said that since the vandalisation, supply has been disrupted.

He pointed out that because of security reasons, NNPC is not prepared to go back and effect repairs on the pipeline.

It will be recalled that officials of the NNPC were attacked and killed during a visit to control the spill on the damaged pipeline in Arepo.

The Acting Group General Manager, Group Public Affairs of the NNPC, Fidel Pepple, told journalists that Corporation has bridged the supplies from Atlas-cove and Apapa axis as well as between Apapa and Ilorin to ensure that the scarcity is minimised.

According to the NNPC spokesman, the bridging at this point is to ensure that there are no shortages in Lagos and Ilorin environs as there have been fears that the government wants to increase the pump price of the product but NNPC officials dismissed such fears saying government has not made such intention known to marketers.

“I want to assure Nigerians that NNPC has stepped up fuel supply to marketers and distributors for effective and efficient supply of fuel to Nigerians. As I speak, we have raised the daily supply of fuel from Folawiyo tank farm from 150 tankers to 250 tankers, MRS from 100 to 200 tankers, Capital Oil to 300 tankers, NIPCO to 70 tankers and AITEO to 100 tankers,” Mr. Pepple said.

Barely weeks after a looming fuel crisis was averted following a truce between the Federal Government and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) vehicular queues surfaced in some fuel stations in Lagos, Abeokuta and the Federal Capital City.

In stations where the products are sold, motorists were subjected to buying from one pump thereby causing panic and anxiety.

Some motorist said they have to pay as much as N200 before they were attended at some filling stations.

When contacted, the Acting Group General Manager, Public Affairs of the Nigeria National Petroleum Corporation (NNPC), Fidel Pepple said the corporation is studying the situation and will react in due course.

Meanwhile, the NUPENG president, Igwe Achese has taken a swipe at the federal government for failing to revamp the nation’s refineries adding that private depot and jetty owners are not importing products presently.

And in Abeokuta, the Ogun state capital, long vehicular queues were seen across the metropolis, with some of the filling stations dispensing fuel.

A visit to the NNPC mega station located along the Governor’s Office and other stations revealed that motorists spend long period of time before getting the commodity.

Other filling stations across the metropolis were under lock and key forcing buyers to rush to where the commodity was available.

This situation has however led to the hike in the intra transport fare in the state capital



Police apprehend pipeline vandals in Kogi state

The Nigeria Police Force in its continued determination to ensure the protection of oil installations, especially NNPC pipelines across the country, on 8th and 9th September, 2012, at Agayin, Ajaokuta LGA of Kogi State, smashed a syndicate of NNPC pipeline vandals. A statement from the force deputy public relations officer, Frank Mba said.

This feat was recorded by the newly constituted IGP’s Special Taskforce on Anti Pipeline Vandalization headed by ACP F.T Ibadin, who working on information received on 7th September, 2012 from a good-spirited Nigerian, stormed Adogo village with officers and men of the Taskforce on 8th September, 2012 and dislodged the vandals.

The vandals, over-powered by the Police, took to their heels, abandoning Seventeen (17) trucks, majority of them already loaded with stolen petroleum products.  A Honda car, a Volkswagen Golf car, some offensive weapons and other equipment used by the suspects to siphon petroleum products from vandalized NNPC pipelines were also recovered. The Special Taskforce also arrested one Stephen Amana of Adogo village who confirmed to own one of the trucks.

The Inspector-General of Police, IGP MD Abubakar, commended members of the Taskforce for their timely response which led to the recovery of the items and the arrest of the suspect.  He further stated that the Force will leave no stone unturned in forestalling further vandalisation of pipelines by hoodlums.

The IGP expressed his gratitude to the Governor and people of Kogi State for their cooperation and support before, during and after the operations. He stated that their information to the Police assisted in no small measure in the success of the Special Taskforce.

The IGP, while assuring Nigerians of the Police readiness to fulfill its constitutional mandate, appealed for a more cordial relationship between the Police and the public.



Nigeria pumped 2.12 million bpd in Q2 -CBN

Central Bank of Nigeria (CBN), on Monday, said the country pumped 2.12 million barrels of oil per day (bpd) in the second quarter, well below the 2.48 million bpd which the finance ministry projected in the 2012 budget.

The CBN, in its second quarter review of the economy, published on its website, said oil production had risen from an average of 2.06 million bpd in the first quarter.

Official oil figures normally come from the National Bureau of Statistics (NBS), but the CBN, the oil ministry and the Nigerian National Petroleum Corporation (NNPC) sometimes give output figures on ad hoc basis.

If the apex bank’s figure is correct, a lift in output in the second half of the year will be unavoidable, to fund all the spending in the budget without taking on more debt or lowering its oil savings rate.

The benchmark oil price in the budget was $72 a barrel, well below the market price and above which Nigeria is supposed to save extra revenues in the Excess Crude Account (ECA).

But if production fails to meet projections, the government will need to take more money back from the ECA to meet the shortfall.

Finance Minister, Ngozi Okonjo-Iweala, told a foreign news agency last month that the ministry lowered the production projections given by the oil ministry.