Oil
NNPC denies conniving with Swiss firms to defraud Nigeria
ABUJA – The Nigerian National Petroleum Corporation (NNPC) on Tuesday debunked claims that the corporation connived with Swiss oil companies to defraud Nigeria.
Mr Andrew Yakubu, Group Managing Director of the corporation, made the denial at the investigative hearing on the alleged connivance of NNPC and Swiss oil companies to defraud Nigeria of billions of dollars.
The News Agency of Nigeria (NAN) reports that the allegation was made by Berne Declaration, a Switzerland-based non-governmental advocacy group.
The group alleges that Nigeria loses billions of dollars every year from large volumes of crude oil exported from Nigeria below the international market price.
It specifically mentioned Vitol and Transfigura Commodity Trading Firms of Switzerland in the shady deal with the NNPC.
Testifying before the House of Representatives Committee on Petroleum Resources (Upstream), Yakubu, however, said that the corporation’s pricing strategy was in line with international best practice in the oil industry.
“Our prices are based on a reference to the benchmark crude Brent which prices are published by Platts for the international community,” he said.
The NNPC boss said that the claim by Berne Declaration that Vitol and Trafigura oil companies accounted for over 36 per cent of total volume of crude oil disposed by the NNPC was false.
He said that contrary to the claim, Vitol and Trafigura accounted for only 30.7 million barrels out of the 341.07 million barrels disposed by the corporation in 2013.
“The lifting of Trafigura and Vitol in 2013 therefore represents nine per cent of the total lifting as against 36 per cent reported by Bernes Declaration,” Yakubu said.
He said that Nigerian traders collectively accounted for 98.2 million barrels during the period under review.
Yakubu told the committee that international traders, including Swiss trading companies, accounted for 61.2 million barrels, while off-shore and the Nigerian refineries took 36.2 and 38.3 million barrels, respectively.
He said that the selection of buyers of Nigerian crude was done transparently and competitively based on financial and technical capabilities.
Yakubu said that there had been significant increase in the number of Nigerian traders participating in the disposal of Nigerian crude.
He explained that the swap arrangement alleged by the Berne Declaration was a known practice in the oil industry
Yakubu said that the corporation delivered the international market value of crude to the federation on the basis of the general sales agreement and conditions.
He said that the NNPC Act mandated the corporation to supply petroleum products to the federation as supplier of last resort.
“In order to meet this obligation, 445, 000 barrels of crude is assigned to the corporation at international price for domestic refining,” he said.
The Chairman of the committee, Rep. Muraina Ajibola (PDP-Oyo), said that the committee would ensure that appropriate recommendations were submitted to the House.
– NAN
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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