Oil
PIB Remains the Best Option for Nigeria’s Oil Sector – Ogbeifun
ABUJA – Former Deputy President General of the Trade Union Congress of Nigeria, TUC, Dr. Brown Ogbeifun, has said the Petroleum Industry Bill, PIB, remains the best option to move Nigeria’s Petroleum industry forward.
Ogbeifun, an ex-President of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, argued that PIB would definitely add value to the country’s national hydrocarbons if passed and the sole beneficiaries would be Nigerians and Nigeria.
Speaking on whether the aborted planned sale of the public refineries was the best available option, in a chat with Sweetcrude, he said: “would have preferred other words in place of the word “sale” because that word means so many things to so many of the Stakeholders. First, the concept of Privatization is not a bad idea, but the modus of implementation in Nigeria runs fowl of all known positive virtues and values.
The harrowing experience of Nigeria Telecommunications Limited, NITEL, and Power Holding Company of Nigeria, PHCN, are the usual reference points by the Unions. This has left Oil and Gas Unions with mutual suspicion, cynicism and total loss of confidence in the privatization process. Secondly, privatization is not synonymous with job losses. But, what we find here is that once an enterprise is privatized, the motive of profit drives the primary instead of the secondary objectives. So we see excising of workers and contracting their jobs to labour contractors that the Unions refer to as pay masters. This further fuels the resistance of the Unions against government privatization process.
In all sincerity, government should blame itself for this very vicious and unending privatization spirals.”
“For whatever reason(s), government refused to implement the business model (Nigeria National Liquefied Natural Gas, NLNG, model) agreed with the unions for privatizing the refineries in 2004. This can be verified. This model runs like any other venture in partnership with technical, financial partners and the government.
Though government will have a stake in the venture, it does not have the overall controlling authority, which gives it authority and right to interfere in the internal affairs of the management of the holding company. The refineries under this model would have had a life of theirs and commercially managed. But government made a u-turn perhaps due to the advice of either its political strategic partners for purely selfish reasons or that of the interested buyers.
For instance, in the twilight of President Obasanjo’s second term, rather than implement the privatization process using the NLNG model canvassed by the unions to the investors, which would have at least kick- started a win-win option, the government decided to give away Kaduna Refinery and Petrol-Chemical Companies, KRPC, and Port Harcourt Refinery Company, PHRC, on wholesale. So the unions cried blue murder and fought hard to reverse the process. So, trusting government ever since has become impossible. Six years after, we are back to the starting block.”
According to him, “one can emphatically say that the unions were ready at a point to accede to a middle of the road option that will help remove the hands of government as the sole owner in running the affairs of the Nigeria National Petroleum Corporation, NNPC, and by extension that of the refineries. When NNPC was compared with other National Oil and Gas companies, it was discovered that unlike other commercialized oil and gas companies, the average turnover of Managing Directors in the International Oil Companies, IOCs were between three to five years. OANDO has had Mr. Wale Tinubu as its CEO for more than a decade. He has moved OANDO from a single window to multiple windows in the upstream, mid-stream and downstream. He was able to do this because of the continuity and the stability of his team.”
“But in the case of NNPC, the reshuffling of its top management is at will and almost on every other year by its sole owner (Government). This has had very serious negative impacts with some taking very many years to ameliorate. It has had not less than seven Group Managing Directors within a ten year period. The implications of this in terms of very high turnover of the top management that are the strategic planners at the Corporate level are dangerously enormous.
This also cascades to the Managing Directors and the Executive Directors of the refineries. Internally, it has very serious pension implications as those who would have been paying to the pension baskets are retired prematurely and the commencement of drawing pension well ahead of their retirements etc. Un-planned changes destroy succession planning, prevents talent management, causes policy sommersault, kills consistency in policy formulation and implementation; reduces investor confidence and breeds anxiety among staff as they do not know what to expect when once there are changes especially after every Presidential election.”
“Does it not worry us that the top management of NNPC virtually sleeps in the National Assembly week-in week-out with very grave consequences and implications for executive time management? What about the politics and intrigues as it was with the Central Bank of Nigeria, CBN’s, red flag on the $49bn theft it accused NNPC of? Do we truly appreciate what damage that did to the image of Nigeria, investor confidence and the NNPC?
All these continuously happen because NNPC is an agency of government and I do not think this is what the unions crave for. With this type of picture, privatization in whatever form will remove the bottlenecks and challenges, allow for stability in the internal dynamics of the refineries, expands the risk sharing among the financial, technical partners and government, the revitalization of the refineries to produce optimally thereby creating more employment opportunities and investments along the value chain.”
“The refineries currently operate under very difficult socio-economic environments with huge challenges, which majority of our people do not appreciate. Vandalism and tortuous long approval processes from above for major turnaround of the refineries are real challenges that cannot be wished away.
That is why the PIB is proposing the creation of a new National Oil Company with specific assets’ base. It also went on to make provisions for the deregulation of the downstream and further specified 30% divestment that will allow for accountability and full commercial orientation in refinery operations. This is almost in tandem with unions’ demands.”
The former TUC Deputy President-General is of the opinion that “though the multi-nationals have their fears about the PIB, such fears no matter how germane, should not stall the entire process. We can all find a common ground to smoothen the process of PIB passage. That is why it is in the National Assembly for Nigerians to look at and at the end fine-tuned by the law makers.
No country takes thirteen years to determine the end point of a reform of this magnitude and value. If our National Oil and Gas Company shall be a truly commercialized enterprise that should compete with the front runners in global Oil and Gas platform, then time has come for the National Assembly to move fast in passing the Bill. Without gainsaying, this Bill shall add value to our National hydrocarbons if passed and the sole beneficiaries are Nigerians and Nigeria.”
“The unions and Government on their part must now sit down and use the helicopter view in assessing and putting in place a strategy that will help this nation optimize its refining capacities. Maintaining the status quo, cannot be in the interest of this country and the workers themselves. The politicians that swore to make life better us would have failed us if their extraction and their colleagues in the National Assembly refuse to pass the PIB in this legislative year.”
– VANGUARD
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.