Oil & Energy
Battle For The Soul Of NNPC
Nigeria’s fattest cow, the Nigerian National Petroleum Corporation (NNPC) is bleeding.
This time around, not as a result of bursting of its pipeline facilities by vandals or illegal bunkering activities, but due to clash of vested interest over its administrative and financial running procedures.
The life of this critical government parastatal is on the line and like a ravaged and utterly exposed woman, the corporation now lies helplessly in an intensive care unit, with the hope of its survival hanging in the air.
The shadowy operations and internal squabbles in the corporation caught public attention when the Minister of State for Petroleum, Ibe Kachikwu burst the bubbles against the management of NNPC through a protest letter to Nigeria’s President, Muhammadu Buhari.
Kachikwu in the protest letter to his principal, ripped cans of worms open when he disclosed that the operations of NNPC, under the watch of Dr. Maikanti Baru as Group Managing Director (GMD), was shrouded in secrecy.
Kachikwu, a former GMD of NNPC in his now controversial memo picked holes in the modus operandi of the NNPC (GMD), Maikanti Baru.
The memo revealed that contract worth over $25bn were unilaterally awarded without recourse to due process, while appointments are made without consultation of key stakeholders especially with NNPC Board of Directors.
The memo sought among other things to promote application for fair and competitive standard and ethical practices in the corporation.
Kachikwu was said to have raised the memo out of apparent frustration after his several overture to discuss with his principal, President Buhari, were turned down by the president’s top cronies in Aso Rock, who are linked with the NNPC scam.
The development has since created a lingering disagreement between Kachikwu and Baru.
Buhari’s Chief of Staff, and NNPC Board member, Abba Kyari, was also fingered to have worked in connivance with the NNPC’s GMD to frustrate Kachikwu’s moves within the presidency.
The Minister of State for Petroleum was therefore left with no option than to rouse the seeming insensitivity of the President to his perceived persecution by the Aso Rock henchment through public alarm.
The NNPC GMD, Maikanti Baru however dismissed Kachikwu’s claims as false. In a swift response, Baru faulted Kachikwu especially on his accusations of irregularities in the award of contracts but was apparently silent on the issue of making appointments in the corporation without due consultations.
Baru explained that no money was involved in the contracts and that the NNPC Tenders Board has no business reporting to Kachikwu and the corporation’s Board.
Irked by Baru’s response, Kachikwu’s loyaltists have equally given a counter response insisting that Baru’s silence on the controversial appointment in the corporation was an indictment on his part.
They dismissed Baru’s response as “self serving” and urged the NNPC GMD not to hide behind illegality to justify wrong actions and called for proper investigation of the matter, “especially as it relates to policies on public procurement as enshrined in relevant laws and regulations governing procurement in Nigeria”.
On Baru’s submission that Kachikwu has no business in the internal administrative policies of NNPC, Kachikwu’s loyalists pointed out that constitutional provisions are clear on the president’s statutory rights to delegate power to his minister or any government functionary.
They insisted that Kachikwu as a former GMD of NNPC was not a novice in the corporation’s politics, as he was reputed to have instituted a culture of transparency at all levels under his watch, by publishing reports of operations in the corporation and briefing stakeholders periodically.
However, as the clash of interest rages on between Kachikwu and Baru’s camps, Nigerians are of the view that the controversies surrounding the operations of NNPC should not be swept under the carpet.
A Port Harcourt-based legal practitioner, Barrister Barivure Kpobe, described the NNPC scam as a tactical reflection of the rot in all critical sectors of the economy.
Commenting on the shocking revelations from the parties involved in the NNPC crisis, the Port Harcourt-based lawyer said proper investigations should be carried out to ascertain the true position of things in the corporation, while the law should take its full course.
A youth activist and public affairs analyst, Comrade Legborsi Yaamabana, called on all the parties involved to submit themselves to proper investigation and advised the presidency not to shelve anybody from appropriate investigation.
He decried a situation where some government officials will hibernate under the cover of the presidency to commit countless economic atrocities against the people.
“The government does not belong to any single individual or group of privileged persons. It is a thing of shame that some people abuse opportunities of being in power to swindle the people. The antics of some of the people involved in the NNPC scandal, shows that they are not remorseful even in the face of glaring revelations. The President should ensure that justice is done in this matter by ensuring that all those involved in the scandal face the wrath of the law,” he posited.
In his view, a university teacher, Dr. Steve Wodu, expressed disappointment over the shocking revelations of unethical practices in the NNPC.
Dr. Wodu, an environmental sociologist and senior lecturer in the University of Port Harcourt, said the president should be cautious against those running a parallel regime while disguising as his confidants but bent on imposing their self-serving motives on the people.
He said: “the NNPC’s scandal was a manifestation of the gold digging experiments of some self-appropriating public officials who hide under political cover-ups to milk the nation dry.”
Dr. Wodu, who described the NNPC as a major source of Nigeria’s economic prosperity, called for the review of the corporation’s act to serve its specific objectives and not to be a conduit pipe for self appropriation of tax payers money.
Popular radical lawyer and social crusader, Femi Falana in his own reaction to the NNPC scandal has called on the President to relieve himself of the ministerial position as head of the petroleum ministry, which is already subsumed in his presidential role.
In Falana’s postulation, the President’s role as Minister of Petroleum does not entirely detach him from the festering web of corruption in the NNPC.
He averred that giving up his position as Petroleum Minister will allow room for proper surveillance and Xray of activities in the Nigeria petroleum sector.
Pundits had earlier faulted the nomination of President Buhari’s Chief of Staff, Abba Kyari as a member of the NNPC Board on the ground that Kyari’s appointment was a duplication of duty, as some part of the country especially the South East do not have a representative on the NNPC Board.
Former National Chairman of the Nigeria Bar Assocation, Olisah Agbakoba, has already instituted a suit against the Federal Government for deliberately slighting the South East in the appointment of Board members for the NNPC.
Agbakoba’s argument is that appointments into sensitive positions in Nigeria should be based on the imperatives of justice and not skewed to favour a particular section of the country.
Others view Kyari’s appointment as a common place practice of availing indepth cronies of government unfettered access to juicy positions, on a note of compromise and pacification.
The NNPC ordeal to them is just a tip of the iceberg on the sordid realities in different sectors of the economy, where opportunists count on political patronages and undue concessions to cash in on the economy.
For the Minister of State, Petroleum, Ibe Kachikwu, his ordeal in the NNPC appears to be a reverberative consequence on his earlier deviant posture on the unilateral increase in the pump price of PMS.
His then decision was offensive to the sensibilities of Nigerians but he was undettered and revelled in the impositional act.
It could be recalled that President Buhari’s long standing profile of altruism and zero tolerance for corruption were his greatest political capital, especially during the 2015 general election.
However, his seeming lacklustre attribute to tame the excesses of his acolytes appear to be turning the table against him and his government.
Nigerians believe that the NNPC saga is another test for the president to exonerate himself, by yielding to sober reasoning and save not only the NNPC but the Nigerian state from imminent collapse. Nigerians still await the illusive change that is the hallmark of Buhari’s administration of change mantra.
Taneh Beemene
Oil & Energy
Bill Prohibiting Gas Flaring Passes 2nd Reading
The Bill for an act to prohibit gas flaring, encourage commodity utilisation, and provide for penalties and remedies for gas flaring violations has passed its second reading in the House of Representatives.
Sponsored by the Member representing Ikorodu Federal Constituency (APC, Lagos), Babajimi Adegoke Benson, the bill seeks to prohibit the flaring and venting of natural gas, except in strictly regulated circumstances, while encouraging the utilisation of gas resources to foster economic growth and energy generation.
The proposed legislation aims to mitigate the environmental, health, and economic impacts of gas flaring, aligning Nigeria’s oil and gas operations with international climate change commitments.
Offenders, who violate the provisions of the proposed law, would face stringent penalties, including fines of $5 per 1,000 standard cubic feet of gas flared and potential suspension of operations for repeat violations.
Leading debate on the general principles of the bill, Benson said gas flaring has plagued Nigeria for decades, resulting to severe environmental degradation, public health crises, and economic losses while it environmentally, contributes to greenhouse gas emissions, global warming, and acid rain, exacerbating climate challenges.
The lawmaker said public health impacts of the practice are equally dire, as pollutants from gas flaring cause respiratory and cardiovascular diseases, particularly among residents of communities close to flaring sites.
According to him, economically, flaring results in the waste of a valuable resource that could otherwise be harnessed for energy generation or exported to generate revenue.
Benson insisted that the bill was designed to address those issues while bringing Nigeria in line with global standards such as the Paris Agreement on climate change.
“The bill provides for a comprehensive prohibition of gas flaring except in emergencies or when explicitly authorised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“Operators are required to submit and implement Gas Utilisation Plans, detailing how gas that would otherwise be flared will be captured, processed, or commercialised.
“Offenders, who violate these provisions, face stringent penalties, including fines of $5 per 1,000 standard cubic feet of gas flared and potential suspension of operations for repeat violations. Furthermore, the Bill ensures that communities affected by gas flaring are entitled to compensation and environmental restoration, creating a mechanism for redress.
“Transparency and accountability are integral to the enforcement framework of this Bill. Operators must submit regular reports on gas flaring incidents, which will be audited and made publicly available by the NUPRC. This approach ensures public oversight and stakeholder engagement, fostering trust and compliance.
“Nigeria’s adoption of this Bill positions the country to emulate such success, ensuring a balance between environmental stewardship and economic development.
“The implementation of this Bill will be overseen by the Nigerian Upstream Petroleum Regulatory Commission, which will monitor compliance through regular audits, enforce penalties, and facilitate gas utilisation projects in collaboration with operators and development partners.
“The Anti-Gas Flaring (Prohibition and Enforcement) Bill, 2024, is a timely and necessary response to one of Nigeria’s most pressing environmental challenges. Its provisions are both practical and forward-looking, addressing immediate concerns while laying the groundwork for a sustainable future.
“I urge all Honourable Members to support the Second Reading of this Bill as a demonstration of our collective commitment to environmental protection, public health and economic progress”, he added.
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Oil & Energy
‘Indigenous Companies To Gain From Shell’s Contract Awards’
Oil major, Shell, has restated its commitment to the development of Nigerian companies through contract awards and scaling up of expertise.
Managing Director, Shell Nigeria Exploration and Production Company ((SNEPCO) Limited, Ron Adams, made the remark while speaking at the Opening Ceremony of the 13th edition of the Practical Nigerian Content forum held in Yenagoa, Bayelsa State, with the theme “Deepening the Next Frontier for Nigerian Content Implementation”.
Represented by the Manager, Business Opportunity, SNEPCO’s Bonga South-West Aparo Project, Olaposi Fadahunsi, he said several benefitting companies had taken advantage of the patronage to expand their operations and improve their expertise and financial strength.
Adams said, “Shell companies execute a large proportion of their activities through contracts with third parties, and Nigeria-registered companies have been key beneficiaries of this policy aimed at powering Nigeria’s progress”.
He emphasized that Shell companies in Nigeria also continued to develop indigenous manpower through scholarship programmes with over 3,772 undergraduate and 109 Niger Delta post graduate scholarships since 2016.
“As we speak, beneficiaries of the 13th edition of the Niger Delta Post Graduate Scholarship awards are pursuing their studies in the United Kingdom. The employability rate of the scheme is high with over 98% of the graduates who won the awards securing employment in the oil and gas industry, academia and Information Technology, among other sectors, within one year of completing their studies”.
He commended the Nigeria Content Development and Monitoring Board (NCDMB) for ensuring compliance with the Nigerian Content Act saying “Nigerian content will continue to be an important part of Shell operations”.
The four-day conference hosted by the Nigerian Content Development and Monitoring Board (NCDMB) and participating companies reviewed progress on the development of Nigerian content pertaining to the implementation of the Nigerian Oil and Gas Industry Development (NOGICD) Act since it was enacted in 2010.
Shell companies in Nigeria are among the more than 700 oil and gas entities that participated in the forum with a strong message of support for Nigerian companies, having awarded contracts worth $1.98 billion to the businesses in 2023 in continuing effort to develop Nigerian content in the oil and gas industry.
Oil & Energy
NNPC Begins Export From PH Refinery
The Nigerian National Petroleum Company Limited (NNPCL) has sold the first cargo of Port-Harcourt low sulfur straight run fuel oil (LSSR) to Dubai-based Gulf Transport & Trading Limited (GTT).
The company is expected to load the cargo in the coming days onboard the Wonder Star MR1 ship, signalling the commencement of operations at the plant and the exportation of petroleum products.
The ship would load 15,000 metric tons of the product, which translates to about 13.6 million litres.
Although the volume coming from the NNPC into the global market is still small, the development has the potential to impact the Very Low Sulphur Fuel Oil (VLSFO) benchmarks in the future, while changing the market realities for Atlantic Basin exporters into Nigeria and other regions.
The sulfur content of the export by NNPC stands at 0.26 per cent per wt and a 0.918 g/ml density at 15°C, according to Kpler, a data and analysis company.
The cargo was reportedly sold at an $8.50/t discount to the NWE 0.5 per cent benchmark on a Free on Board (FOB) basis.
Kpler reported that the development would help displace imports from traditional suppliers in Africa and Europe, as Nigeria’s falling clean product (CPP) imports are already decreasing, dragging imports into the wider West Africa region lower as well.
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