Oil
Mixed reactions trail proposed sale of refineries
ABUJA – Mixed reactions have continued to greet last week’s announcement by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke that the four government-owned refineries would be privatised before the end of the first quarter of 2014.
The Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, cautioned the Federal government over the proposed sale to private investors.
According to the Union’s General-Secretary, Isaac Aberare, stakeholders in the country must be involved, if the plan will see the light of the day.
He also said that the sale of the refineries is not the solution to the massive importation of petroleum products into the country as the problem is government’s inability to carry out the Turn-Around-Maintenance, TAM, of these refineries over the years to make them function optimally.
He blamed the rot of the refineries on intrigues, power play, selfish interest and inordinate desire to protect the cabal importing fuel.
Aberare explained that the refineries are key institutions of the nation’s economy, which should remain in government’s control, for security and strategic reasons. He insisted that they should not be allowed to be sold to government cronies as was experienced in the power sector.
He reasoned that more refineries should be established in the model of the NLNG strategic partnership, and more investors given tax holidays and land. This is to enable them construct new ones just like the initiative of the Dangote refinery, instead of selling the nation’s assets as scraps to people.
According to him, ”We warn that the proposed plan should be done with uttermost care, because the Union will not fold its hands to allow its members to be thrown into the unemployment market that is already saturated.
“NUPENG and PENGASSAN must be involved in wide consultations on issues like this before going on air to pronounce their sales, in order to avoid industrial disharmony.
‘’The Union wants the government to focus on how to curb oil theft in the pipelines and consider our proposal for the creation of a Pipelines Protection Agency that will be fully saddled with the protection of the nation’s over 3,570 trunk lines crisis-crossing the landscape.
‘’NUPENG also calls for the speedy passage of the Petroleum Industry Bill (PIB) that is before the National Assembly to address these challenges facing the oil and gas sector to bring about transparency and accountability and stop chasing the shadows.”
Similarly, Mr. Folorunsho Oginni, the Chairman, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Lagos Chapter, also said the Union was opposed to privatisation of the refineries, as it would lead to increase of the pump price of petroleum products.
“More workers in the sector will be disengaged and this will not solve the problem of importation. What we need now is building of more refineries to boost production and not privatization of the existing refineries,” he said.
According to him, a country consuming more than 32.8 million litres of petroleum products per day could not depend on only four refineries; adding that more refineries would provide employment opportunities for the jobless Nigerian youths.
However, the Organised Private Sector under the aegis of Nigeria Employers Consultative Association, NECA, has expressed full support for the planned privatisation of the refineries.
The Director-General of NECA, Mr Olusegun Osinowo, argued that privatisation of the refineries was necessary to stop the deluge of petroleum products importation into the country.
He said the move will also check abuse of subsidy payments, which has no positive impact on the lives of Nigerians.
According to him, selling the refineries will put an end to the huge sum of money expended on their turn around maintenance. He added that the ills besetting the nation’s downstream petroleum sector would be addressed if the private sector is allowed to maintain the refineries.
Adewunmi Ilori, Managing Director, Metib Oil and Gas, said that the privatisation of the refineries would create more jobs for Nigerians.
“It is very sad that only two out of the country’s four refineries are functioning. When they are privatised, they will be more productive. With the success recorded in the privatisation of telecommunication and power sectors, we hope that if our refineries are privatized it will boost socio-economic activities in the country,” he said.
The Petroleum Minister had taken the nation by surprise when she said last week that Nigeria’s four refineries would privatised in the first quarter of next.
“We would like to see major infrastructural entities such as refineries moving out of government hands into the private sector,” Alison-Madueke said in an interview with Bloomberg TV Africa in London.
She also said, “Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over all these years.
“We are right now undergoing a major turnaround maintenance program of the refineries.”
Towards the end of former President Obasanjo’s administration in 2007, the refineries were sold to companies owned by billionaire businessman, Aliko Dangote, and Femi Otedola, but the sell was reversed by the President Musa Yar’Adua government that took over from Obasanjo.
– VANGUARD
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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