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NNPC’s Payment Of N2.1tn Dividend, N2.6tn Tax will reduce Nigeria’s financial burden– Chukwu

According to him, the total amount shared by the three tiers of government in the first seven months of this year was only N8.3tn while NNPC paid tax of N2.6tn which is almost 30 per cent of the total amount that had been shared.

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THE Chief Executive Officer of Cowry Assets Management Ltd, Jonhson Chukwu has said that the dividend and taxes paid by the Nigerian National Petroleum Company Ltd will reduce the financial burden of the federal government.
Chukwu said this in response to the record performance of the state-owned company after it released its financial accounts for 2023.
It has been reported that the company made N3.297tn net profit for 2023 which surged significantly by 28 per cent compared to the N2.54tn recorded in the previous year.
The books showed that the company recorded a historic profit before tax of N5.98tn while it paid taxes of N2.6tn to the Federal Inland Revenue Service.
NNPC also recorded a dividend of N2.6tn payable to the Nigerian government. The company had declared a loss of N803bn in 2018, and it was reduced to N1.7bn loss in 2019.
But the company led by the Group Chief Executive Officer, Mele Kyari returned to profitability in 2020 with N287bn profit and N674.1bn profit in 2021. It went further to post N2.55bn profit in 2022.
Chukwu said in an interview on Arise TV that the dividend and taxes declared by the company will reduce the financial stress of the federal government.
He said, “The federal government has made a supplementary budget of about N6tn. And then NNPC’s N2.1tn final dividend is more than 35 per cent of the supplementary budget.
“That will show you the impact this is going to have when that money comes to the foundation account.
“Bear in mind that whatever dividend they pay goes through two organs of government. One, Federal Minister of Finance, Incorporated, and Ministry of Petroleum, Incorporated and they own NNPC limited 50-50 per cent.
“So, it all goes back to the entire national treasury. And that simply means it will go into the federation account, which will be shared through the three tiers of government. And that will cushion the kind of financial stress that the governments at different levels are going through.”
He said in the past, the concern of Nigerians has always been on the issue of accountability on the part of the former Nigerian National Petroleum Corporation now NNPC.
Chukwu, while responding to the performance, likened the NNPC Ltd to Saudi Aramco, which is the biggest listed oil firm with $1.8tn market capitalisation.
Chukwu said, “I was quite impressed. You know why? Everything we’ve heard in recent past, we are all negatives about the general industry, what is going on and that. And then today we’re looking at how NNPC had turned the corner.
“If you cast your mind back just a few years ago, 2018, that company made a loss of N803bn. In 2018, you can see it virtually broke even by making a loss of only N1.7bn.
“But today we’re talking about N3.3tn profit and that is after tax payment of N2.6tn. And we need to put it in context. The NNPC is going to pay to the federation account to Federal Inland Revenue Service N2.6tn as tax before it arrived at the N3.3tn.”
The economist said the results showed that the NNPC has created value for the nation in the region of N5.3tn.
According to him, the total amount shared by the three tiers of government in the first seven months of this year was only N8.3tn while NNPC paid tax of N2.6tn which is almost 30 per cent of the total amount that had been shared.
The Cowry Assets boss explained that the NNPC could record the performance because the management possibly reduced or eliminated the loss-making arms of the organisation.
“They would have instilled some level of performance-based in different arms of an NNPC. And they have also escalated their level of reporting, and now do you have a detailed financial statement from an NNPC. For years, we did not have a detailed financial statement from an NNPC.
“So, I think NNPC being an incorporated company, like what we have in NNPC Limited, unlike what you have in Nigerian National Petroleum Corporation, when it was a corporation, and then there was no level of accountability.
“What has been brought to bear are the standards that are applicable to private sector enterprises, in terms of performance-based, board of oversight functions, budgeting, and then appraisals that actually measure performance against targets.
“And I think those things have been institutionalized and which is why we are seeing consistency in terms of their profitability and we’re seeing a steady growth in their profitability over these past few years since they turned the corner.
“And I believe those are the factors that were brought to bear that made the company turn the corner.”

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Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd

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Enhanced adoption of artificial intelligence and other digital technologies to improve operations in Nigeria’s oil and gas industry is taking the centre stage in relevant circles.

The issue came up strongly when the President-elect of the Nigerian Institute of Petroleum and Gas Engineers NIPetGE, Prisca Kanebi, paid a courtesy call at the Nigerian National Petroleum Company Limited (NNPC Ltd), Abuja.

Biztellers reports that the Kanebi led delegation was received by the Group Chief Executive Officer of the NNPC Ltd, Bayo Ojulari, represented by the Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye.

According to a statement made available on Sunday, discussions at the meeting focused on the future of Nigeria’s hydrocarbon industry amid global energy transition concerns, technological changes and sustainability targets.

ALSO READ: NNPC Ltd, IOCs Raise Crude Supply to Local Refineries by 103% in 4 Months

The statement indicated that the NNPC Ltd acknowledged the role of NIPetGE in policy advocacy, technical development and innovation within the sector.

Speaking during the meeting, Kanebi highlighted recommendations from the institute’s recent conference, including the proposed establishment of a national centre for intelligent energy systems to support the deployment of artificial intelligence, the Internet of Things and robotics across the petroleum value chain.

She also commended the Federal Government’s decarbonisation efforts and reiterated the institute’s support for policies aimed at improving sustainability in the industry.

The institute also recommended the creation of a hydrocarbon-linked emissions trading system to allow Nigeria to take part in global carbon markets.

The institute also proposed fiscal incentives to support local manufacturing and service delivery in the oil and gas sector, as well as the expansion of the Energy Transition Plan to include measurable upstream decarbonisation targets backed by tax credits.

Other proposals included increased public-private partnerships in emission control infrastructure, carbon capture projects and hybrid renewable energy initiatives.

Both organisations also stressed the need for stronger collaboration between industry and academic institutions to improve professional capacity and align petroleum engineering practice in Nigeria with international standards.

The institute further disclosed that its bill seeking chartered status had passed second reading and was progressing towards a third hearing at the National Assembly.

It added that NNPC Ltd pledged support for future collaborations with the institute on initiatives aimed at improving efficiency and innovation in the energy sector.

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FHC Orders NUPRC to Comply with PIA

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Local Firms Lead Revival of Idle Oil Wells – SPE

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Nigeria’s indigenous oil and gas companies are reopening dormant wells and ramping up production from assets acquired from international oil companies (IOCs) to boost crude oil output.

The Society of Petroleum Engineers (SPE), Nigeria Council, made the assertion through its Chairman, Francis Nwaochie, on the sideline of the Offshore Technology Conference (OTC) which ended at the weekend in Houston, Texas.
Nwaochie said indigenous operators were already taking advantage of opportunities created by disruptions in the global energy market to increase production from existing assets.

According to him, local firms that recently acquired onshore and shallow water assets from IOCs were aggressively reviving inactive wells and maximizing available infrastructure to raise output levels.

“What we are seeing now is that indigenous companies are reopening wells from the assets they acquired from the IOCs. Some of them have almost doubled production from those existing assets,”.

He explained that the renewed focus on dormant wells and existing facilities had become critical at a time the global oil market was facing supply shortages triggered by geopolitical tensions in the Middle East.

The SPE Nigeria Council Chairman noted that Africa, particularly Nigeria, was well positioned to benefit from the supply gap because of the continent’s relative stability compared to some other oil-producing regions.

“There is a huge opportunity for Africa right now. The focus is gradually shifting to Africa because of the volatile environment in many other producing regions.”

He stated that indigenous operators were leveraging digital technologies, financing opportunities and local expertise to improve production efficiency and optimise existing fields.

He added that stronger implementation of local content policies was also helping to create a more stable operating environment for oil and gas investments.

“Local content is very critical. Once communities and local companies clearly understand their roles and benefits, then you create peace across the industry. Business only thrives in peaceful environments.”

ALSO READ: Nigerian Navy Recovers Large Cache of Illegal Refined Petroleum Products

Nwaochie also stressed the need for Nigeria to move beyond crude oil production and begin developing indigenous technologies for the energy industry.

According to him, SPE Nigeria Council was actively supporting innovation and technology development among young Nigerian engineers and researchers.

He disclosed that the association was engaging the National Universities Commission(NUC) on reforms to engineering curricula in universities to better prepare graduates for the future of the energy industry.

“One of our major focuses in SPE is technology development. We should not only import machines and equipment, we must begin to develop our own technologies locally.”

Nwaochie revealed that SPE was already supporting local innovators working on technologies such as remotely operated underwater vehicles (ROVs), noting that indigenous technology development will strengthen Nigeria’s economy and deepen local participation in the oil and gas sector.

“We may not get everything right immediately but we must start somewhere. That is how countries that dominate the global energy industry built their capacities.”

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