The Nigerian government appears set to introduce policy changes to finally herald the take off of deregulation of the downstream sector of the petroleum industry, minister of state petroleum resources, Ibe Kachickwu, confirmed on Tuesday.
PREMIUM TIMES had exclusively reported on Monday that government was planning to unveil in a matter of days the new policy, which would see a minimum of 27.17 per cent hike in the price of petrol.
Officials familiar with the matter had told PREMIUM TIMES that deregulation, which would effectively see the end of subsidy payment in the petroleum industry, would likely push petrol prices to about N110 per litre at Nigerian National Petroleum Corporation, NNPC-owned filling stations and higher at other independent outlets.
Also it was learnt on Tuesday that a new price band of between N135 and N145 per litre of fuel has been proposed for marketers under the regime, while adjustments would be made to the ex-depot price in the Petroleum Products Pricing Regulatory Agency, PPPRA pricing template.
Speaking in Kaduna during the second town hall meeting organised by the federal ministry of information and culture, Mr. Kachikwu confirmed that in the next few days, the new policy which is expected to help address the fuel scarcity crisis, would effectively take off.
“We are coming up with a new policy in the next few days that will allow our fuel price swing along with international pricing,” the minister said. “We are now transiting into fuel modulating pricing, because we do not have sufficient foreign exchange to continue fuel importation we have been doing.”
The minister said the introduction of price modulation mechanism early this year had helped stabilize the problem, pointing out that it was becoming necessary for the country’s oil sector to reflect global pricing of its fuel products.
To demonstrate the seriousness to end fuel subsidy payment in the country, Mr. Kachikwu said government deliberately did not have any budgetary allocation for fuel subsidy in the 2016 budget approved last week by the National Assembly.
He said since the federal government managed to settle about N600 billion outstanding claims by marketers for subsidy inherited from the previous administration, it was determined not to continue paying fuel subsidy in the country.
He said since the NNPC did not also have the logistics and coverage for effective distribution of the product 100 per cent, it was necessary that the industry was opened up for effective participation by private operators.
On the uncompleted Petroleum Training Institute, PTI in Kaduna, the minister said the ministry had created a skill learning department to coordinate staff training and the running of its specialized centres in Warri, Lagos and Kaduna.
The institute is programmed to provide skills to HND graduates in refining and solar energy so as to prepare them for a future in the oil industry.
On oil exploration in the northern part of the country, the minister said government had invited investors to explore for oil in the region, since research conducted revealed there was both oil and gas in commercial volume in the region.
Bharti Airtel Africa, a telecommunications service provider with operations in 17 countries across Africa, has announced that it has launched Free Basics in Nigeria in partnership with Facebook.
Nigerians with an Airtel mobile connection will be able to access all the services that are available through Free Basics without paying extra for data charges or rental. Free Basics provides basic mobile websites and services for free to people around the world and demonstrating the value the internet can provide.
Free Basics will launch in Nigeria with more than 85 free services dedicated to health, education, jobs, and finance. To date, Facebook estimates that its connectivity efforts, which include Free Basics, have brought more than 25 million people online who wouldn’t be otherwise. Airtel Africa will also be offering Facebook Flex in Nigeria, which allows people to access a version of Facebook without data charges. Airtel Africa has worked with Facebook since 2014 with the launch of Free Basics in Zambia, Kenya, Malawi, Ghana, Seychelles and Rwanda.
Ime Archibong, director of Global Product Partnerships at Facebook, added: “We’ve spent time with the developer community here in Nigeria to understand how we can help people here build and create for their communities, and by bringing Free Basics to Nigeria we hope to provide another platform for developers to bring relevant services to people free of charge. At launch, we have more than 85 services included in Free Basics and hope to spur more development to bring relevant, basic services to Nigerians.”
Archibong continued: “We believe that local entrepreneurs and developers will be the ones to meet the needs of their immediate community, and we are working with developers to know how we can support them in doing so.”
Oil prices rose about 3 percent on Tuesday, recovering a chunk off losses from the previous session, as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high U.S. crude stockpiles.
A series of attacks on Nigeria’s oil infrastructure has pushed crude output close to a 22-year low in Africa’s largest oil producer, Reuters data showed.
In Canada alone, a wildfire that scorched a sizeable part of Alberta’s oiltown Fort McMurray has knocked out 1.6 million bpd from producers and pipeline operators that have shut facilities as precaution, consultancy Energy Aspects said.
Repair crews on Tuesday were assessing the damage after an initial inspection by officials showed the Canadian energy boomtown was spared the worst as nearby oil sands companies looked to resume production.
The disruptions eclipsed worries about rising U.S. crude inventories, which were expected to have grown for a fifth straight week last week to record highs above 543 million barrels. Data from the American Petroleum Institute, due at 4:30 p.m., was expected to show a half a million-barrel build. [EIA/S]
“I think we are still in bull market, but I also think the headwinds are increasing,” Scott Shelton, energy broker with ICAP in Durham, North Carolina, said, referring to the heightened volatility in crude futures since April’s rally of 20 percent or more.
Brent crude futures LCOc1 were up $1.40, or 3.2 percent, at $45.03 per barrel by 11 a.m. EDT (1500 GMT). On Monday, it fell 3.8 percent.
U.S. crude’s West Texas Intermediate (WTI) futures CLc1 rose 87 cents, or 2 percent, to $44.31.
Refined products were also firmer, with U.S. gasoline futures RBc1 gaining 2 percent and ultralow sulfur diesel HOc1, also known as heating oil, soaring 3 percent. Both had fallen about 4 percent in the previous session.
Macquarie said in a research note that with crude production in decline in the United States and outside the Organization of the Petroleum Exporting Countries, global oil markets could be on the path to rebalance by end 2016.
“With firmer Q4/Q1 activity driving these observed declines, we remain confident that activity levels will need to rise and WTI prices will need to stay above $40 for U.S. land production to stabilize in a timely manner,” it said.
Senate Committee on Agriculture said at the weekend that a permanent solution to the perennial crises between farmers and herdsmen would lie in the importation of grazing pastures for cattle at designated places across the country.
The committee headed by former Nasarawa State governor, Abdullahi Adamu, welcomed the idea of importing grazing grasses and making them available to cattle, to stop the movement of cattle from one place to another in search of pastures and put an end to the growing spate of tragedies associated with it.
He said government must provide and service pasture to curtail the movement of cattle, pointing out that even the United States of America set up pastures, provide water to grow nutritious grasses for their cattle.
The committee chairman stated that government must face the reality of taking some serious and painful decisions to bring the crisis of herdsmen versus farmers to a permanent end, adding that “there are no easy fixes” to the problem.
The lawmaker attributed the perennial clashes to indiscipline among the herdsmen, government failure to address the key issues promoting the crisis, and the bid to politicise the matter.
Agriculture Minister Audu Ogbeh had in March disclosed that government had a plan to begin the importation of grasses for cow to reduce the movement of herdsmen across the country.
Adamu also commended President Muhammadu Buhari for ordering the release of 10,000 tonnes of grains to ease the suffering of Nigerians over the rising cost of grains in the country.
Abdullahi also stated that his committee had found out that the administration of Buhari met many silos empty when it was inaugurated last year.
He said that his committee was impressed that the main priority of the federal government on agriculture at the moment was to ensure that agricultural practices were appropriately and adequately facilitated.
According to him, the Senate is also working to give necessary legislative support to the presidency to restore the lost glory of the agriculture sector in Nigeria.
He equally explained that government was committed to allowing the agriculture sector to be driven by the private-sector, adding that the only assignment of government was to provide the enabling environment.
In addition to importing grasses to feed the cattle, Ogbeh had disclosed that President Buhari was setting up grazing areas in various states of the federation as a response to the clashes.
Addressing his Idoma people who were demonstrating against the massacre of Agatu people of Benue State by herdsmen in Abuja, Ogbeh said, “We are producing massive hectares of grasslots for the consumption of cattle; we have received these grasses from Brazil and we are growing them in massive quantities.
“Cattle herdsmen want grasses for their cattle; such grass is what we are growing in large quantities and within the next three months, some of these will be ready.”
The minister had also hinted that government was in the process of enacting a legislation that would control cattle grazing in unauthorised areas.
“We are also sending a bill to the National Assembly to legislate that cattle should no longer roam in our cities and villages.
“We will equally raise the issue at the level of the African Union to compel member-countries to take steps to prevent their herdsmen from grazing into neighbouring countries.
“It will be a major international crisis if we do not stop it now,” Ogbeh said.
Hundreds of passengers were stranded at the Nnamdi Azikiwe International Airport Abuja over flight delays by airlines.
Mostly affected were the domestic travellers in what the airlines blame on aviation fuel scarcity.
An airport official said only two domestic flights had departed the airport early yesterday while nine others including a flight scheduled for 7:45am were shifted severally.
A notice from Aero and Arik airlines to passengers seen by our reporter at the airport apologised to passengers in two different SMS announcing the delay and another announcing the new flight schedules.
Dana Air said it delayed its Abuja-Lagos flight earlier scheduled for10:45am to 12:25pm citing aviation fuel scarcity.
“…This delay is due to unavailability of aviation fuel. We sincerely apologise for the inconvenience,” one of the notices from the airline said.
The 10:45 Dana flight to Abuja-Lagos finally left the Abuja airport at 1:30 pm after passengers were boarded to a Port Harcourt-Lagos flight. Airline attendants were also seen explaining the aviation scarcity to passengers and apologising for the delays.
A passenger who identified himself as Dr. Bala said he was not happy over the delays as his airline announced the delay few minutes before departure and that has cost him his medical appointment.
Some airlines also cancelled their flights at the weekend. Aero Contractors in a statement yesterday appealed to its customers over the delays and cancellations of flights on Sunday and Monday which it attributed to fuel scarcity.
On cushioning the challenge, experts say only local refining of Jet A1 would address the supply shortage and high cost of the product. Daily Trust reports that airlines spend more than 70 per cent of operations cost on fuel.
An Airline chief executive told our correspondent that the local refining of Jet A1, as promised by the Petroleum Minister, would bring down the cost while expressing hope on the implementation.
The Ukrainian Ambassador to Nigeria, Valeriy Aleksandruk, has said that his country is ready to invest one billion dollars into Ajaokuta Steel Company in order to revive the plant.
This is according to a statement by Alex Okoh, Head, Public Communications, Bureau of Public Enterprises (BPE) in Abuja on Thursday.
The statement said that the ambassador made the disclosure when he paid a courtesy call on the Acting Director General of the BPE, Vincent Akpotaire.
It also stated that Aleksandruk said that the Ukrainian company that built the plant -Tiajpromexport (TPE) – had presented a proposal to the Federal Government to that effect.
He said that the steel company has a lot of potentials which his country wanted to take advantage of and that already, meetings were on with relevant people in Nigeria for the realisation of the planned takeover of the plant.
Aleksandruk emphasised that Nigeria has a very good relationship with Ukraine especially in areas of trade and investments adding that there was a big Nigerian community in his country.
He, however, added that Ukraine was ready to “open a new page in its relationship with Nigeria” and pledged to assist the Bureau in its training needs to become a foremost privatisation agency in Africa
The statement said that Akpotaire in his response, said that the Bureau would review the proposal by the Ukrainian government.
He said it would also review that of Morgan Stanley, the multinational financial services firm that would provide the one billion dollar investment before taking any further steps.
He added that the Federal Government was desirous to get the Ajaokuta Steel Company Limited and the Nigerian Iron Ore Mill Company (NIOMCO) Itakpe running.
Akpotaire urged the Ukrainian Government to invest in other sectors of the Nigerian economy, especially in developing the downstream of the steel sector that would service several sectors including the automobile sector.
France and Japanese Government have earmarked the sum of $1 billion about N197 billion for the construction of mono rail project in Lagos state, aimed at boosting the state governnent’s effort in sustenance of its mega city status.
Meantime, the state government generated N101.69 billion revenues in the first quarter of year 2016 appropriation year, even as it had secured $100 million about N19.7 billion loan from the French Government to upgrade slums in the state.
Commissioner for Economic Planning and Budget, Mr. Akinyemi Ashade, disclosed these Monday, during the ministerial press briefing in Alausa, Ikeja, in commemoration of Governor Akinwunmi Ambode’s first year in office.
Ashade said both countries have earmarked the funds following previous achievements by the state government.
The commissioner explained that the continued increase in the state population has put pressure to partner other governments in improving the standard of living in the state.
His words, “In a bid expanding its development partnership with the Lagos State Government in urban mass transportation, Japanese International Cooperation Agency, JICA will commit the sum of $1billion to development of a mono rail which will connect Marina to Victoria Island and Ikoyi.
Ashade noted that the need for the project was the outcome of the preliminary survey on Mass Rapid Transit, MRT system in Lagos metropolis conducted by JICA and Lagos Metropolitan Transport Authority, LAMATA.
He however, stated that the availability of the fund would be determined by the results of a feasibility study, saying “JICA will commit the sum of $1billion to the project if the result of the preliminary survey is validated by the feasibility study amongst other conditions.”
The federal government may have perfected plans to privatise the nation’s refineries within the next one year, according to revelations by the Minister of State for Petroleum, Dr. Ibe Kachikwu.
According to Kachikwu, the federal government was looking at privatising its refineries within 12 months, disclosing that Agip and Chevron have already indicated interest in purchasing two of the refineries.
The minister, who doubles as the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), says his team is working with oil majors on improving the state-run refineries in Nigeria.
Kachikwu was quoted by Reuters as saying that the federal government wanted to privatise the refineries within 12 months following the much-needed maintenance work.
“We have gotten commitments from some of the majors. Agip has indicated interest to work with us on Port Harcourt, Chevron on Warri. We are talking to Total on Kaduna,” Kachikwu said.
He added that even if the refineries in question performed to their optimum capacity, their production would still not meet local demand for petrol.
He said the petroleum resources ministry was striving to utilise other sources of refining petrol while also depending on the coming on board of private refineries like the Dangote refinery.
He noted that the non-performance of the refineries was due to a number of factors, including fraud and lack of holistic maintenance. As a result of the long period of non-maintenance, a lot of components were ineffective.
However, the minister had earlier stated that the refineries would not disposed off, but said government would seek investors to co-locate new refineries near the existing ones which presently perform abysmally lower than their installed capacities.
ruling out a possible sale of the nation’s refineries, Kachikwu who was speaking during an official tour of the Okrika Jetty and the Port Harcourt Refining Company Limited, affirmed that “the refineries would not be sold but joint venture partners with established track records of success in refining would be invited to support the running of the refineries in order to ensure efficiency.”
He noted that the phased rehabilitation of all the state owned refineries would be given an accelerated vigour with the aim of reducing petroleum products importation into the country, adding that at full capacity, all the refineries could supply 20 million litres of petrol on a daily basis.
LEADERSHIP recalls that Kachikwu had assured that the corporation will provide all the necessary enablers to make the refineries operate commercially and optimally, while pointing out that though the current challenges militating against the operations of the refineries are huge, they are not insurmountable.
He stated that in view of the nation’s low refining capacity, there was need to establish more refineries in the country, adding that he plans to ensure the building of new refineries near the existing plants.
“I am pushing to build new refineries next to our existing plants in order to boost the nation’s refining capacity for the common good” he stated.
He explained that the new refineries will be developed by private investors and that NNPC’s role will be just to provide them with space close to the existing refineries to enable them share key facilities such as pipelines and storage facilities.
Kachikwu who praised the vision and foresight of past Nigerian leaders for establishing the refineries had then challenged the present generation to sustain the vision, adding that all hands must be on deck to salvage the situation.
Oando Bridges Gas Supply To North, Kicks Off LNG Project In Kogi
Oando Gas & Power Limited (OGP) has commenced development of a mini Liquefied Natural Gas (LNG) facility through its Transit Gas Nigeria Limited (“TGNL”) subsidiary in Ajaokuta, Kogi State.
The pioneering 20 mmscf/day liquefaction plant is primarily directed towards fulfilling the gas supply requirement for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South.
Off-takers, particularly, power plants and industrial customers who currently utilise liquid fuels such as diesel and LPFO, will be able to lower energy costs by up to 40%, while significantly decreasing carbon emissions.
Commenting on the initiative, OGP CEO, Mr. Bolaji Osunsanya said, “The establishment of the Ajaokuta mini LNG project is in firm alignment with our mid-to-long term gas conversion strategy.
This venture further emphasises our push to broaden our asset portfolio and strengthen our market play within the gas sector; and by providing the gas advantage, we will help spur the development of self-sustaining industrial clusters to bolster the country’s socio-economic growth.
LNG is a viable provisional solution and an industry game-changer for the development of gas markets ahead of the actualisation of a far-reaching nationwide gas pipeline network as stipulated by the Nigerian Gas Master Plan.”
With an unlimited supply radius across the country, the Ajaokuta mini-LNG project will provide the solution to the perennial power challenges suffered in certain regions by supplying gas to key foundation off-takers including strategic power plants and commercial concerns.
OGP provides gas and power solutions to over 170 industrial and commercial customers nationwide ensuring cost-savings across board, powering economic development, and engendering environmental awareness.
The company commissioned its expanding Compressed Natural Gas (CNG) program in 2013, and is currently spearheading several long term projects including a 400km South-West to North-West gas pipeline and a Central Processing Facility (CPF) which will serve as the primary gas gathering and processing hub in the Niger Delta.
Commenting further on the company’s strategic direction, Osunsanya said, “We are focused on aggressively developing Nigeria’s gas infrastructure and the Midstream sector at large as evidenced by the ongoing expansion efforts of our various assets.
We are poised to conclude the 10km Ijora to Marina expansion of our Greater Lagos pipeline to increase our supply capacity and market, while providing a cheaper power solution for industries and commercial enterprises along the axis. In cooperation with the Rivers State Government, we have also begun the 8km build out of the Central Horizon Gas Company pipeline franchise within the Trans-Amadi area which will have a socio-economic multiplier effect via the availability of power generated, job creation, and the growth of businesses.”
Though Nigeria boasts proven natural gas reserves of 187 trillion cubic feet (TCF), the 8th largest in the world and the largest in Africa, the gas industry has failed to realise its true potential due to a number of challenges including the lack of a suitable long-term fiscal and regulatory framework, insufficient infrastructure, sabotage in the Niger Delta, and slow market consolidation.
Analysts have continually touted gas as a means of diversifying Nigerian revenues from the usual reliance on oil.
“Gas must occur as a market-driven development, and Nigeria is not an exception. With oil, there is a ready global market existing for the product. However in gas, you start with an end market and then you develop the gas infrastructure, including extraction, processing facilities, pipelines and connecting infrastructure,” said Osunsanya.
Oando’s holistic gas integration strategy includes methods of transmission and distribution through virtual pipeline solutions such as LNG and CNG to fulfill market requirements while the gestation period for the implementation of the Nigerian Gas Master Plan elapses.
The multi-billion Naira Ajaokuta LNG facility will commence operations in Q2 2017.
Militancy Forces Shell To Evacuate Workers From Bonga Fields
Shell workers at Nigeria’s Bonga oil field in the southern Niger Delta are being evacuated following a militant threat, a senior labour union official said on Monday.
“We are aware of the development and the evacuation is being done in categories of workers and cadres,” Cogent Ojobor, chairman of the Warri branch of the Nupeng oil labour union, said. “My members are yet to be evacuated”, reports Reuters.
He gave no numbers.
Shell said earlier on Monday that oil output was continuing at its oil fields in Nigeria despite local media reports of a militant attack near its Bonga facilities.
“Our operations at Bonga are continuing,” a spokesman for Shell Nigeria Exploration and Production Company (SNEPCo) said in a statement. It said it would continue to monitor the security situation in its operating areas and take all possible steps to ensure the safety of staff and contractors.
Last week, militants attacked a Chevron platform in the Delta where tensions have been building up since authorities issued an arrest warrant in January for a former militant leader on corruption charges.
President Muhammadu Buhari has said there would be a crack down on “vandals and saboteurs” in the Delta region, which produces most of the country’s oil.
A group known as the Niger Delta Avengers claimed responsibility for the Chevron attack. The same group has said it carried out an attack on a Shell oil pipeline in February which shut down the 250,000 barrel-a-day Forcados export terminal.
Residents in the Delta have been demanding a greater share of oil revenues. Crude oil sales account for around 70 per cent of national income in Nigeria but there has not been much development in the poor Delta region.
Buhari has extended a multi-million dollar amnesty signed with militants in 2009 but upset them by ending generous pipeline protection contracts.
The militancy is a further challenge for a government faced with an insurgency by the Islamist militant Boko Haram group in the northeast and violent clashes between armed nomadic herdsmen and locals over land use in various parts of the country.
The minister of labour and employment, Dr Chris Ngige, has described as legitimate the call by labour for a review of the national minimum wage and said the federal government is carefully studying it in order to give an appropriate response.
The minister made the disclosure while receiving the executive members of the Organisation of Trade Unions of West Africa (OTUWA) yesterday in Abuja.
Ngige said: “The other day, labour requested increased wages for workers and they have only done what they are supposed to do. Therefore, nobody will quarrel with them. At the appropriate time, we shall all sit down because what the labour is asking is for the re-negotiation of an existing Collective Bargain Agreement (CBA). And every CBA-based agreement is subject to re-negotiation at any given time that any of the partners requests it,” he said
Ngige debunked the notion that whenever labour makes such a demand, it means that the workforce is at loggerheads with the government.
“It is wrong for people to think that whenever the labour makes such a demand, the nation is boiling. The labour in Nigeria has for the first time met a labour-friendly government under President Muhammadu Buhari.
“The government has put machinery in motion as we speak because I have got a letter as the Minister of Labour and Employment for my advice. We shall advise the government the way such a tripartite negotiation will be handled so that everybody will be satisfied without any industrial unrest.
“Government in this sense includes also the state and local governments whom such wages will be binding on. When government takes a decision, we will now move to another stage in the process of re-negotiating the CBA,” he said.
He further stated that the change mantra of the Buhari administration is geared towards changing the way things are done for the better.
We are in an era where due process supersedes every other. People can only perform their roles and give way for other people to also perform theirs,” he said, adding that labour is part of the tripartite arrangement of the International Labour Organisation structure which Nigeria is signatory to.
He further commended OTUWA for fulfilling its roles as envisioned by the ILO.
Earlier in his address, OTUWA president, Comrade Mademba Sock, said that three-decade-old organisation in 2015 took far-reaching decisions to revive and re-position OTUWA. He said the decision to re-locate its headquarters from Abidjan, Cote d’ Ivoire, to Abuja was to enhance its operations since the headquarters of ECOWAS is in Abuja.