Oil
National Assembly to abandon PIB
ABUJA-The current National Assembly may abandon the Petroleum Industry Bill owing to the slow progress of work on it.
The PUNCH observed on Wednesday that it was becoming clear that the bill might be abandoned as senators and members of the House of Representatives have only 16 days to the end of the 7th National Assembly.
Findings showed that while the Senate is behind by not reporting the bill out of the committee stage, the House which started considering its own report last week, was being slowed down by disagreements among lawmakers over the many clauses in the proposed law.
For example, at the resumed consideration of the report by the House on Wednesday, members hotly disagreed over the funds oil majors were expected to share with the Federal Government for exploration activities in the River Basins.
Many clauses had to be deferred in the course of consideration as members also raised constitutional questions on some of the provisions.
Faced with the ensuing disputes among members, presiding Deputy Speaker Emeka Ihedioha referred all contentious issues back to the Ad hoc Committee on PIB to be re-taken.
Ihedioha had observed that members were arguing more on issues as they affected their interests, adding, “Whatever interest you have cannot be more than the national interest that this parliament and this House in particular has.”
He later adjourned further consideration till Tuesday next week.
There were doubts on Wednesday whether the House would conclude work on the 348- clause document before the valedictory session of the House fixed for May 27.
Investigations showed that of concern was the fact that the Senate was behind and was not likely to make any serious progress on the bill before May 29.
A National Assembly official, who spoke with The PUNCH on the progress of the bill said, “The efforts of the House, though commendable, will end up as being futile.
“We all know that a bill becomes law only when passed by the two chambers of the National Assembly and is assented to by the President.
“So, even if the House does pass the bill before May 29, what purpose would it have served without the concurrence of the Senate?
“The only option is if the Senate will simply adopt the report of the House. I doubt if this is likely, considering the controversial nature of the PIB.”
Asked to comment on what would happen to the bill should the Senate fail to pass it, the Deputy House Leader, Leo Ogor, replied that it would be on the record that the House passed it.
“We operate a bicamera legislature. We in the House are passing the PIB.’’
When contacted, the Senate Leader, Victor Ndoma – Egba, said deliberation on the bill was deliberately suspended by the Senate because there was no adequate time to consider the report.
He said, “The feelers we are getting is that the incoming administration will want to study the bill and this makes sense because it is a far-reaching piece of legislation. At this point in time, it must be of interest to the incoming administration.
“The public has a misconception that the bill has been with us for four years which is not true. This bill was re-introduced to the 7th National Assembly in late 2013.
“Because it has several aspects like the fiscal (financial), technical, the legal, and the gas component, it is a very complicated bill.
“Since we needed to bring in several committees. The logistics of having more than one committee to deal with a bill is challenging. In this case we have to bring in six committees.
“Finding a common opening in terms of schedule is usually a problem and because it is very technical, we need to get the technical input of virtually every stakeholder in the sector.
“Inherently, it is not a bill that could be treated in a hurry, it is not possible. Having six committees working together on a bill is not only a big logistic problem but also, quite challenging and a big nightmare.
“For this piece of major legislation, it is important that we thread slowly, it’s going to be a major policy plan for the incoming administration, so if we are around the corner, why are we in a hurry?”
Fresh indications had emerged on Tuesday about how the non- release of the N520m appropriated for the National Assembly to work on the PIB caused its non-passage by the Senate.
Investigations by one of our correspondents revealed that the comprehensive and the executive summary of the report had been jointly produced by the six Senate committees coordinated by the Chairman of the Committee on Petroleum Resources (Upstream), Senator Emmanuel Paulker.
Findings further showed that the report had not been presented because none of the 43 members of the six committees had appended his signature on it.
The development stalled its presentation on the floor of the Senate for a clause by clause consideration by members.
It was learnt that the Senate leadership made N40m available to the joint committees, whose members were expected to carry out public hearings among stakeholders across the country.
The committees were also to hire foreign and local consultants to assist in the task.
A member of the joint committee, told The PUNCH on condition of anonymity that the amount released by the Senate leadership was grossly inadequate to carry out the assignment.
He said, “The committee involved foreign consultants who are experts in various fields in the oil and gas industry. The consultants did their work but the committee is still owing them huge sums of money at the moment.”
He alleged that, “rather than the Federal Ministry of Petroleum Resources releasing the N520m appropriated for the exercise, some officials diverted the money to produce billboards and posters, claiming that they were creating awareness for a bill that has not been passed.”
The committee member added, “The situation created serious problems for the six committees made up of 43 members who were expected to carry out the necessary legislative activities.
“In fact, members of the joint committee had refused to sign the document because they did not receive adequate sitting allowances.
“The leadership of the senate are in a fix on what to do now since the House of Representatives had started deliberation on its own version of the bill.”
When contacted, the spokesperson for the Federal Ministry of Petroleum Resources, Kingsley Agha, said, “I’m busy and I can’t take your call.”
–PUNCH
The Nigerian National Petroleum Company (NNPC) Limited has revealed the detection of more than 4,800 unauthorized connections on oil pipelines within the country, painting a troubling image of the nation’s primary source of revenue.
Mele Kyari, the Group Chief Executive Officer of NNPC Ltd, communicated this information to the Senate Committee on Appropriations last Friday.
He said, “We have over 4,800 illegal connections on our pipelines. That means in some lines, within 100 kilometres of pipelines, you have as much as 300 insertions.
“Therefore, even when you produce the oil, you cannot deliver them at the required pressure and therefore the volume will also be less.”
As per the NNPC Ltd chief, individuals from various regions enter the Niger Delta, inserting unauthorized connections on pipelines in Nigeria’s oil-producing area.
This recent revelation follows a prior discovery of 295 illegal connections to the pipelines by the firm a year ago, underscoring the escalating issue of crude oil theft in Nigeria.
Two years earlier, Kyari had highlighted the country’s daily loss of 200,000 barrels of oil, amounting to $13 million due to theft and vandalism.
He further stated “We have two sets of losses, one coming from our products and the other coming from crude oil. In terms of crude losses, it is still going on. On the average, we are losing 200,000 barrels of crude every day.”
After the discovery, Nigeria’s security forces pledged to enhance security around the country’s pipelines.
To bolster this, the Federal Government granted a multi-billion naira pipelines surveillance contract to Tantita Security Services, headed by former militant leader Government Ekpemepulo, also known as Tompolo.
Despite facing criticism for this decision, Senator Heineken Lokpobiri, the Minister of State for Petroleum, remains convinced that it was the appropriate course of action.
In August, following a tour of oil facilities in the Niger Delta, Senator Heineken Lokpobiri expressed gratitude to Tantita, commissioned by NNPC Ltd, for their ongoing work.
He also hinted at plans for further extensive endeavors in the future.
In 2021, after extensive debate and delays, the Petroleum Industry Bill was finally passed to attract increased foreign investment into the oil sector through amendments to regulations, royalties, and taxes.
Nigeria’s colossal $19 billion Dangote Refinery, after encountering several setbacks, is on the verge of kickstarting fuel production.
This achievement is heralded by the arrival of the first crude shipment, transported by the OTIS tanker carrying 950,000 barrels of Nigeria’s Agbami crude.
S&P Global, citing industry sources and tanker tracking data on spglobal.com, reported the tanker’s departure on December 6, en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal.
Scheduled to reach its destination around 8 PM on December 7, the arrival of this shipment signifies the commencement of crude supplies for the refinery’s operations.
Chartered by the state-owned Nigerian National Petroleum Company (NNPC), the Suezmax tanker is an emblem of the initial crude supply to Dangote’s cutting-edge refinery, as disclosed by a West African oil trader familiar with the matter in the S&P report.
Even though the refinery was officially completed in May, the absence of domestic crude feedstock had hindered oil product manufacturing.
To address this, the NNPC, holding a 20% stake in the refinery, struck an agreement to provide 6 million barrels of crude oil as feedstock to the Dangote refinery in December.
This move aims to jumpstart operations and overcome the previous impediments.
Agbami, operated by Chevron, holds a prominent position among Nigeria’s major deepwater developments, producing around 100,000 barrels per day in the central Niger Delta.
Known for its light sweet crude qualities, with a specific gravity of 47.9 API and a low sulfur content of 0.04%, Agbami produces substantial amounts of naphtha and kerosene.
NNPC has chartered additional shipments from different Nigerian offshore fields to the refinery, marking the start of a sequence of planned crude supplies for the month, as mentioned by the oil trader.
Located on the outskirts of Lagos, Nigeria’s commercial hub, the Dangote Refinery encountered repeated delays since its 2013 announcement, despite significant installation progress in 2019.
The refinery, designed to handle multiple crudes simultaneously, targets three Nigerian crude grades—Escravos, Bonny Light, and Forcados. When operating at full capacity, it aims to produce 327,000 barrels per day (b/d) of gasoline, 244,000 b/d of gasoil/diesel, 56,000 b/d of jet fuel/kerosene, and 290,000 metric tons per year of propane/LPG.
Dangote’s operations starting signify Nigeria’s hopes to lessen its reliance on gasoline imports, addressing the deficiencies of its existing refineries undergoing repairs. This shift is poised to reshape Nigeria’s oil industry, potentially leading to gasoline self-sufficiency by the 2040s.
Dangote officials anticipate an initial output of 370,000 barrels per day (b/d), emphasizing jet fuel and diesel production.
Industry analysts, however, project the refinery to reach its full operational capacity by mid-2025, although potential delays remain a looming concern.
The Nigerian National Petroleum Company Limited (NNPCL) has announced intentions to cease importing refined petroleum products by December 2024, anticipating full operational functionality for all national refineries by that time.
Group CEO, NNPC Ltd, Mele Kyari, shared this at a meeting with Speaker Tajudeen Abbas of the House of Representatives, who advocated for the privatisation of Nigeria’s refineries on Thursday.
Projections indicated the national oil firm’s revenue could climb to N4.5 trillion by the conclusion of 2023. Moreover, the rehabilitation of the Port Harcourt Refining Company, managed by NNPCL, was slated for completion by December of the current year.
Meanwhile, Oil marketers verified on Thursday that the Port Harcourt refinery is set for operations, potentially starting in January 2024. They emphasized that once operational, this refinery could notably reduce the prices of refined petroleum products.
During the meeting in Abuja, Kyari asserted Nigeria’s intention to cease importing refined petroleum products by 2024, envisioning the country’s emergence as a net exporter of these commodities within the same year.
He outlined the plans for launching operations at the Port Harcourt, Warri, and Kaduna refineries.
Kyari reiterated that all refineries would operate at full capacity, ultimately paving the way for Nigeria to transition into a net exporter of petroleum products by the conclusion of 2024.
He attributed the inactivity of Nigeria’s refineries over the years to the petroleum subsidy, emphasizing that the removal of this subsidy was drawing significant private-sector investments into the sector.
Kyari said “I can confirm to you that by the end of December this year, we will start the Port Harcourt refinery; early in the first quarter of 2024, we will start the Warri refinery and by the end of 2024, Kaduna refinery will come into operation.
“This is the commitment we are giving today and you can hold us accountable for this. In 2024, many of the initiatives including the rehabilitation of our refineries and also the efforts of small-scale refineries, and the upcoming Dangote refinery, will make Nigeria a net exporter of petroleum products in 2024.
“We will no longer be talking about fuel importation by the end of 2024. I am very optimistic that this will crystallise.
Kyari promised that by the conclusion of 2023, the government’s anticipated revenue from the company would reach N4.5 trillion, emphasizing NNPCL’s adherence to the Petroleum Industry Act and its commitment to delivering value to shareholders.
Recall that in October 2023, it was reported that Nigeria’s monthly spending on the importation of Premium Motor Spirit, known as petrol, had reached approximately N843 billion due to NNPCL’s cessation of oil swaps.
In July of this year, the Nigerian Midstream and Downstream Petroleum Regulatory Authority reported that during the post-deregulation period, spanning June 1 to June 28, 2023, the country’s total petrol consumption amounted to 1.36 billion litres, with an average daily consumption of 48.43 million litres.
The average ex-depot price of petrol, sourced solely from NNPCL as the importer, stands at about N580 per litre.
However, both NNPCL and oil marketers declared on Thursday that this substantial oil import expenditure would soon diminish.
They anticipated a drop once the Port Harcourt refinery commences production of refined petroleum products from January 2024, barring any unforeseen circumstances.
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