Tuesday , 19 June 2018
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Tag Archives: NNPC

Only an angel can run NNPC transparently, says Sanusi

Muhammadu Sanusi, emir of Kano, says only angels can run the Nigerian National Petroleum Corporation (NNPC) in a transparent manner.

Speaking with PUNCH in commemoration of his fourth year on the throne, Sanusi said payment for subsidy should be scrapped.

The monarch said money paid for subsidy could make changes in the power, agriculture, education and health sectors.

“It is not about the persons in the NNPC but about whether anyone can make a system operate honestly when there are such huge arbitrage opportunities. We need to import angels for that to happen,” he said.

“So, for me these are the issues. It is an economist’s nightmare. Sadly the very reason this subsidy should be scrapped is probably the reason it never will be. For those who profiteer from it, it is just too good to be true.

“The petroleum minister has disclosed that this government has spent N1.4trn already on fuel subsidy and for most of this period, oil price was between low and moderate.

“You can imagine how much we will pay as oil price goes up. Imagine if that money had gone into the power sector or agriculture and education and health. So for me this government inherited a bad situation but if it continues with these programmes, the next government will also inherit a bad situation which is a shame.”

The emir said government’s attitude could lead the country into bankruptcy.

“What we have is not a subsidy. The federal government guarantees Nigerians a maximum price per litre for fuel. And this is a product we import. And its price is based on unpredictable underlying commodity prices,” Sanusi said

“So what the federal government is saying is look it does not matter what the price of oil is internationally, what the exchange rate is, what interest rate is, what shipping clearing and demurrage is, I am so rich that I will ensure you get fuel at this maximum price and I will pay the difference.

“Meanwhile, the balance sheet of the federal government is not hedged in anyway against these risks. As a professional risk manager, I have never seen a policy that is so guaranteed to bankrupt anyone as this policy.”

PIB: NNPC calls for simplified fiscal terms

The Nigerian National Petroleum Corporation (NNPC) has urged the Senate to consider simplifying the fiscal provisions in the Petroleum Industry Fiscal Bill (PIFB) to ensure easy implementation of the law.

Group Managing Director of the corporation, Dr. Maikanti Baru, made this submission during the Senate Joint Committee Public Hearing on the Petroleum Industry Fiscal Bill (PIFB), Petroleum Host and Impacted Communities Development Bill (PHICDB) and Petroleum Industry Administration Bill (PIAB) at the National Assembly on Monday.

Represented by the Chief Operating Officer (COO), Gas and Power, Engr. Saidu Mohammed, the GMD alsoadvocated for the inclusion of clauses to make it easy for the law to be reviewed in response to economic, technical and other considerations.

The corporation advocated for incentivizing oil and gas operations to attract investment into the country.

He said there was need to leave out all regulatory issues in the Bill to ensure progressivity and empower the regulatory commission to effectively regulate the industry.

He said NNPC was fully in support of the Petroleum Industry Reform Bill which has now been broken intoregulatory, operational and administrative segments for easy passage.

Going down the memory lane, the GMD said the original Petroleum Industry Bill was borne out of the Federal Government’s desire to put in place a robust and desirable legislation to engender transparency, accountability and fairness in the nation’s Oil and Gas Industry.

He noted that although the process of getting the Bill passed had been very challenging, the National Assembly had taken the most practical step to advance its passage by breaking it into phases.

“It is laudable to note that the Governance Bill has been passed by the Legislature while the Fiscal Bill, Administration Bill, and the Host and Impacted Communities Development Bill are going through legislative processes.

“NNPC appreciates the opportunity to review these bills and we have employed our deep expertise and experiences in the Industry to assess their provisions and will gladly make contributions that will not only enforce the desires of the National Assembly but will ensure that the reform bills when passed into law meet the expectations of Nigerians and investors alike,” Dr. Baru stated.

Earlier, the Lead Senate Committee Chairman, Senator Kabiru Marafa, said the public hearing on the three (3) bills was the first time that the National Assembly was sponsoring the bills in bits and pieces for easy consideration and speedy passage of regulations that would lead to the reform of the Nigerian Oil and Gas Industry.

It would be recalled that the Federal Government, some years ago, sponsored the Petroleum Industry Bill as an executive bill to establish the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum Industry.

PIB: NNPC recommends split of petroleum licences

The Nigerian National Petroleum Corporation (NNPC) has recommended the splitting of petroleum licences into two components for prospecting and production phases under the draft Petroleum Industry Administrative legislation currently before the National Assembly.

In a presentation at the Public Hearing organized by the House of Representatives Committee on the Petroleum Industry Administrative Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Industry Host Community Bill (PIHCB), Group Managing Director of the corporation, Dr. Maikanti Baru, said the proposed split would prevent a situation where operators would sit perpetually on oil acreages.

The NNPC’s recommendation under the PIAB seeks a break up of Petroleum Licence into Petroleum Exploration Licence (PEL) – to prospect for petroleum, while the second component to be known as Petroleum Lease (PL), should be created to cover the production phase to search for, win, work, carry way and dispose of petroleum.

The corporation also pushed for a re-think of the duration of licences as proposed in the PIAB which stipulates initial duration of 25 years for onshore and shallow water petroleum licence and 30 years for deep water and frontier acreages.

NNPC, however, proposed five years prospecting licence for onshore and shallow fields and a duration of 10 years for deep offshore and frontier basins.

It recommended 20 years production lease for onshore and shallow fields as well as deep offshore and frontier basins. The corporation noted that only the production lease period should be renewed for a period not exceeding 20 years.

On the PIFB version of the proposed oil industry law, NNPC recommended a three-stage licences regime consisting of: Exploration Licence (EL) – to explore for petroleum on a non-exclusive basis; Petroleum Exploration Licence (PEL) – to prospect for petroleum on exclusive basis; and Petroleum Lease (PL) – to search for, win, work, carry away and dispose of petroleum.

Beyond the clause by clause recommendations, the corporation also advocated for the simplification of the fiscal system for ease of implementation and to ensure progressivity.

It called for expunging all regulatory issues out of the draft legislation to empower the Commission to regulate the industry effectively.

NNPC highlighted the need to introduce and provide clauses that will ensure easy review of provisions of the bill in response to economic, technical and other considerations, while disallowing legislation on issues bordering on contracts.

Chairman of the House Committee, Honorable Alhassan Ado Doguwa, thanked the NNPC for its contribution, noting that the committee would sift through all the submissions by stakeholders before taken informed decisions on the issues.

Andrew Yakubu’s $9.7m stands forfeited to FG – Appeal Court

The Kaduna Division of the Court of Appeal today affirmed the decision of the Federal High Court Kano which ordered the interim forfeiture of the money found in a house in Kaduna belonging to former Group Managing Director of NNPC, Engineer Andrew Yakubu.

On 3 February, 2017, operatives of the Economic and Financial Crimes Commission stormed a house allegedly belonging to the former NNPC boss and uncovered the sum $9,772,800 (Nine Million, Seven Hundred and Seventy Two Thousand, Eight Hundred Dollars ) and another £74,000 (Seventy Four Thousand Pounds Sterling) stashed in a fireproof safe.

The money according to Yakubu, were gifts from well-wishers.

However, the Commission suspected that the money was a proceed of crime and that prompted the EFCC to secure an interim forfeiture from the Federal High Court on the money.

Yakubu through his counsel Ahmed Raji SAN approached the Federal High Court in Kano asking the court to revoke the order.

The Federal High Court Kano presided over by Justice Z.B Abubakar on  10th May 2017 dismissed the application of Yakubu and affirmed the order of interim forfeiture it granted on the 13th February 2017.

Yakubu being dissatisfied with the decision of the Federal High Court approached the court of appeal in a  bid to reverse the interim forfeiture order and get his money back.

The appeal was filed on the 22nd of May, 2017 while the Commission filed its response which was subsequently adopted on the 29th of January 2018 and matter was then adjourned to today for judgment.

The appeal was brought on grounds of jurisdiction, misrepresentation of fact by EFCC that the money was suspected to be proceeds of illegal activities.

He further argued that Section  29 of the EFCC Establishment Act is null and void while at the same time submitted that, Section 28 of the EFCC Act offends the provision of Section 44 (2)(k). In Section 43 of the EFCC Establishment Act.

The learned silk argued that the Attorney General of the Federation did not make regulations and guidelines consequently, all forfeiture made shall be null and void.

However, the respondents in their reply contended that the ruling of the lower court validating its order was not perverse and that sections 28 and 29 of EFCC Act are valid and operational notwithstanding the alleged failure of the AGF to make regulations for their operations.

In a judgment delivered by Justice Obietonbara  Daniel  Kalio who headed the panel of the three judges, the appellate court resolved all the issues in favour of EFCC.

Senate orders NNPC to refund N216bn illegal fuel subsidy payments

The Senate has declared the current payments by the Nigerian National Petroleum Corporation for subsidy of premium motor spirit (petrol) illegal.

It asked the corporation to refund the sum of N216bn spent for the purpose in 2017 under the guise of “operational costs” into the Federal Government’s coffers.

The legislature also asked the corporation to stop further payment of the subsidy, while asking it to pay the arrears owed fuel marketers.

The legislature also resolved to legalise the payment by including it in the 2018 budget.

They also called for sanctioning of the officials involved in the illegal payments.

The Committee on Public Accounts made the recommendations in its report on the investigation into the illegal subsidy payments, which was adopted by the Senate at the plenary on Thursday.

Court threatens to close $1.6 billion fraud case against Omokore, others

The Federal High Court, Abuja, on Thursday, threatened to close the suit on alleged fraud of $1.6 billion instituted by the federal government against Jide Omokore and five others.

Mr Omokore is an ally of former Minister of Petroleum Resources, Diezani Allison-Madueke.

When the matter was called, the Prosecuting Counsel, Oluwaleke Atolagbe told the court that the lead Counsel, Rotimi Jacobs, (SAN), had requested the court to stand down the matter.

Mr Atolagbe told Justice Nnamdi Dimgba that Mr Jacobs had informed him on Wednesday night that he could not get the prosecution witnesses who were billed for cross examination.

He further said that Mr Jacobs had told him that the witnesses, operatives of the Economic and Financial Crimes Commission (EFCC), the prosecuting agency, were writing examination.

Mr Omokore’s counsel, R. Lawal, SAN, confirmed that Jacobs had called him on the issue but decried the attitude of the EFCC since the trial commenced, describing it as unfortunate.

“Most of the adjournments granted by this court since this trial started, are at the instance of the prosecution; in fact, none of the defence lawyers has asked for an adjournment.”

He said that he contemplated asking the court to close the prosecution’s case but rather asked the court to order that the adjournment would be the last at the instance of the prosecution.

Counsel to the other defendants all aligned themselves with Lawal’s submission.

Justice Dimgba also said that he would not be averse to granting an application asking the court to close the prosecution’s case.

“I would have closed the case of the prosecution, but I will grant the prosecution one more indulgence,” he said.

He adjourned the matter until April 26 and 27 for the prosecution to call its witnesses.

Falana demands explanations on fuel subsidy increase from N261bn to N1.3trn

Human Rights Activist, Femi Falana SAN,  on Tuesday filed a Freedom of Information request to the Ministry of Petroleum Resources demanding details of how the Nigerian government’s payment of N261.4 billion per annum in fuel subsidy skyrocketed to N1.4 trillion.

In the FOI request addressed to Ibe Kachikwu, the Minister of State for Petroleum, Mr. Falana said the ministry failed to account for millions of litres of imported fuel between December 2017 and March this year.

In December 2017, according to Mr Falana, the management of the Nigerian National Petroleum Corporation (NNPC) said the nation’s consumption rate of fuel was 28 million litres per day and that subsidy cost was N726 million per day (N261.4 billion per annum).

But last month, Maikanti Baru, the NNPC Group Managing Director, said the corporation paid N774 million daily fuel subsidy due to a heightened petroleum consumption of 50 million litres per day.

On April 6, Mr Kachikwu said the annual expenditure on fuel subsidy has risen to over N1.4 trillion.

“We are not unaware that the increasing consumption rate has been blamed on the smuggling of imported fuel from Nigeria to neighbouring countries by some economic saboteurs,” Mr Falana, a Senior Advocate of Nigeria, stated in his FOI request.

“Assuming without conceding that the story of smuggling is true the total volume of fuel consumed by Benin, Togo, Cameroon, Niger, Chad and Ghana is said to be less than 250,000 litres per day. You will agree with me that this does not explain the difference of 32 million litres per day between the consumption rate of imported fuel in December 2017 and March 2018.”

Mr Falana accused the minister of failing to disclose the amount realised from the sale of the 60 million litres at N145 per litre as well as the sale of the 445,000 barrels of crude oil allocated to the NNPC daily by the federal government.

“Honourable Minister, the convenient defense of smuggling as cheap justification for a gap of 32 million litres a day (at N145 per litre is N4.6 billion daily) is untenable given the billions of Naira continually expended on Project Aquila Software by the Petroleum Equalization Fund (PEF), a parastatal under your watch in the Petroleum Ministry, to track every litre of petroleum product evacuated from the Depots and sold at retail stations in the country.

“Since the Project Aquila Software has the capability to identify theowners and locations of all trucks loading petroleum products in Nigeria, why has your office and NNPC continued to blame smuggling for the drain of N4.6 billion daily on petroleum products? How many of the truck owners involved in the alleged smuggling have been arrested and arraigned in court since Aquila has the database of all Truck Owners in the country?”

Mr Falana requested for copies of the Bill of Laden and DPR certified Cargo Discharged Certificates of the imported subsidised Petroleum Products into the Country from December 2017 to March 2018 and the Offshore Processing Agreements pertaining to the Sale of the 445,000 barrels of crude oil per day plus any additional crude Barrels approved for domestic consumption from December 2017 to March 2018.

He also requested for information on the volumes of domestic refined products by the nation’s local refineries against gross expenditure on refinery Turn Around Maintenance(TAM)/ Expended Budget in 2017, gross amount of Forex differential or Forex subsidy (gap Between CBN rate and special rate approved for fuel importation) from December 2017-March 2018, and the amount expended by PEF on Project Aquila from inception aimed at tracking petroleum trucks nationwide to prevent smuggling of petroleum products.

Adeosun calls crucial meetings as low NNPC revenue stalls allocation to states, others


The Mnister of Finance and Chairman of the Federation Account Allocation Committee (FAAC), Mrs. Kemi Adeosun, has reconvened the meeting of the Committee for Wednesday, 28th March, 2018 at 9:00am.

The meeting, which will hold at the Auditorium of the Federal Ministry of Finance, will have in attendance the Accountant General of the Federation, Mr. Ahmed Idris; Commissioners of Finance and Accountant-Generals of the 36 States and representatives of the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service, Nigeria Customs Service, Department of Petroleum Resources, among others.

The Minister has also called for an emergency meeting next week with the Group Managing Director of NNPC, Mr. Maikanti Baru, and key management over revenue payment into the Federation Account.

It will be recalled that the FAAC meeting was inconclusive on Tuesday, necessitating the intervention of the minister.

FAAC meeting deadlocked over discrepancy in NNPC revenue

Amid confusion and disagreement over discrepancies observed in the revenue figures presented by the Nigerian National Petroleum Corporation (NNPC), the Federation Accounts Allocation Committee (FAAC) meeting ended on Tuesday in deadlock in Abuja.

The meeting was convened for representatives of the 36 states of the federation and the Federal Capital Territory to consider and approve statutory allocation to the tiers of government for February.

Consequently, the committee said it could not approve the allocations to the three tiers of government, describing the discrepancies in revenue figures presented by the NNPC as a bad omen to workers who may have to go without salaries for the month.

The Accountant-General of the Federation, Ahmed Idris, confirmed the development to reporters shortly after the meeting at the headquarters of the Federal Ministry of Finance, Abuja.

NNPC fuel import gulps $5.8bn — but scarcity persists

The Nigerian National Petroleum Corporation (NNPC) on Tuesday said it has spent $5.8 billion to import 9.8 million metric tons of petrol since late last year to combat the fuel crisis.

Mainkati Baru, NNPC group managing director, said at the public hearing held by the senate committee on public accounts in Abuja that the corporation had to carry out the massive importation after private fuel marketing companies abandoned the trade because of the high landing cost of the fuel.

This, he said, made cost recovery and profitability difficult owing to the regulated price regime.

“This is in fulfilment of (NNPC’s) statutory role of supplier of last resort to ensure that Nigerians do not suffer as a result of product unavailability,” a statement from the corporation quoted Baru as saying.

The NNPC boss, however, pointed out that cross-border smuggling owing to price disparity between Nigeria and neighbouring countries where a litre of petrol sells above N350 per litre as well as logistic issues in trucking products to different locations across the country remained serious challenges in the quest for fuel queue-free situation in the country.

Nigeria, Africa’s biggest oil producing country with over 2 million barrels per day of output, imports more than 85% needs of its PMS needs because of inadequate local refining.

Ibe Kachikwu, minister of state for petroleum resources, said on Tuesday the government was working on plans to bring in private sector investment in the repair and management of the refineries and get them up to about 90% of capacity.

“That process is almost completed now, probably in a matter of weeks, we will be announcing the winners,” he said.

“We want to get the private sector to be major investors in building new refineries.”