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Dangote Refinery will be ready 2020: Devakumar Edwin

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Mr. Devakumar Edwin of Dangote GROUP: assures the refinery will be ready in 2020

Mr. Devakumar Edwin of Dangote GROUP: assures the refinery will be ready in 2020

The Dangote Group has dismissed suggestions that the huge oil refinery being built in Lekki, Lagos Nigeria, will not be ready in 2020 as planned.

Executive Director Devakumar Edwin, who oversees the project, described the suggestion that the refinery is unlikely to start production until 2022 as the product of “someone’s wild imagination”.

“Ninety-five percent of engineering has been completed, 90 percent of procurement has been completed.”

“We started civil works in July last year and we have scheduled 2-1/2 years for mechanical completion,” he said, referring to the point where a plant is ready to be handed over for commissioning.

Aliko Dangote himself had said he hoped to finish building the refinery, which will cost between $12-14 billion in 2019 and to start production in early 2020.

The reaction by Edwin came in the wake of a report published by Reuters quoting some unidentified sources, who claimed the unlikelihood of petrol and diesel being produced from the plant until 2022, thus missing the target date by two years. Even by 2022, the faceless sources claimed, many units at the refinery and accompanying petrochemical plant would not be complete.

The 650,000 barrel per day (bpd) refinery near Lagos, is Africa’s biggest, and is expected to turn Nigeria from an importer of refined products into an exporter, transforming global trade patterns.

Reuters sources said a refinery on such a scale would likely need five years to complete and the piling underpinning the plant had only started in the second half of last year and would take some more months to complete.

Extra piling was needed to support the plant’s units in the swampy area, causing an unforeseen delay, the sources said.

“In our forecast, we are putting late 2021 at the earliest for some gasoline production but it may slip to 2022,” said Gary Still, executive director of CITAC, a specialist consulting company focused on African downstream energy.

The existing 445,000 bpd refining system operates well below capacity due to corruption and lack of investment, leaving the state oil firm to import the bulk of its gasoline and gasoil needs paid for with cargoes of crude oil.

Edwin told Reuters last month that more than half the plant’s output could be exported after covering domestic needs.

The plant will be the world’s largest single-train refinery, meaning it will have only one crude distillation unit (CDU).

The government adviser said the CDU would not be ready for commissioning until the third or fourth quarter of 2021 at the earliest, and that process would take about six months.

Major pieces of equipment have yet to arrive or are still being constructed overseas.

A lack of infrastructure to transport and install oversized equipment and risks from rainy season storms could add unforeseen delays, the government adviser said.

The refinery project was first announced in 2013 as a smaller plant to be finished in 2016. A site move to Lekki in Lagos state and a currency crisis caused initial delays.

The first producing unit of the fertilizer plant at the same site is complete but the pipeline that was supposed to bring its key input, natural gas, is not finished, meaning that the end-year start would also be missed, two of the sources said.

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Nigerians open one million bank accounts monthly: NIBSS

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Mr Niyi Ajao, Managing Director, Nigeria Inter Bank Settlement System (NIBSS), says one million bank accounts are opened monthly by Nigerians as the nation’s financial inclusion rate increased to 63.6 per cent from 45.4 per cent recorded in 2016.

Ajao made the disclosure at the launch of the 2018 Financial Inclusion Survey by Enhancing Financial Innovation and Access (EFInA) on Tuesday in Lagos.

He said with the rise in the rate, the efforts of stakeholders in the financial industry were beginning to pay off.

Ajao, however, said that there was need to do more if the country would meet the 20 per cent exclusion rate by 2020.

According to the survey, 63.6 per cent of Nigeria’s adult population of 99.6 million have access to financial services, while 36.4 per cent, equalling 36.6 million of the adult population are financially excluded.

Out of the 36.6 million adult population that are financially excluded, 55.9 per cent are women, while 44.1 per cent are men.

The survey also showed that 39.7 per cent of the population are banked.

Ajao said that NIBSS, which holds data for the banking industry had recorded up to one million new accounts being opened in banks on a monthly basis.

He said that majority of the new accounts were opened by people who already had accounts.

The managing director said that more than 30 million Bank Verification Number (BVN) holders had continued to make more transactions as the volume of electronic transactions grew.

“When we look at the figures for adult population for EFINA report for 2016, 96.4 million and now 99.6 million.

“This is about 3.3 per cent growth of adult population if you look at the number of financially included, 56.4 million as at 2016 has grown to 63.6 million in 2018 that is a growth of 11 per cent.

“So, the increase is way above the population growth and that means the efforts of all players have yielded fruits but we need to continue with the efforts.

“This is because we still have a lot to conquer if we must achieve the 20 per cent exclusion by 2020.

“We have seen NIBSS Instant Payment (NIP) which we use to gauge the payment behaviour of Nigerians from 2016 up,” Ajao said.

He said that the inclusion rate was growing slowly until 2018 when the volume doubled year on year.

“This year by our projection, we will be doing one billion NIP in 2018. We did half of that in 2017.

“It is clear that what we are experiencing is that it is the few banked people that are doing all the transactions.

“Throughout 2017, the volume of transactions kept on growing, instant payment, Point of Sale (POS), bulk payment, even during the recession when the value of transaction became smaller, we were having more and more volume done.

“That again points out that we are winning the war gradually against cash. More people that would have done cash are now doing e-payment,” Ajao said.

“However, the few banked are the ones doing majority of the transactions.

“This year alone, we have 9.9 BVN holders do all the instant payment transactions we saw in the third quarter and that shows the structure we have in place.

“This growth looks much lower than what we see in the bulk of e-payment, it is this same account holders who are opening new accounts and who are doing more transactions.”

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NNPC educates Senate on NLNG dividend account

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The Nigerian National Petroleum Corporation (NNPC) has shed light on the probe of alleged illegal withdrawal from the Nigerian Liquefied Natural Gas (NLNG) Dividend Account by the Senate, clarifying that there was nothing illegitimate about it.

In a statement, the NNPC Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, said the clarification was made by the corporation’s Chief Financial Officer (CFO), Mr. Isiaka Abdulrazaq, at an interactive session with the media over the weekend in Lagos.

The release stated that in a detailed presentation, the CFO clarified that the Senate probe was not about missing money as was being insinuated in some quarters, but rather an investigation into whether NNPC acted legally in withdrawing the sum of $1.05bn from the NLNG Dividend Account to support fuel importation.

According to the release, while granting the statutory right of the legislators to carryout oversight functions, NNPC CFO said that relevant extant laws such as the Appropriation Act 2018 defines revenue from NNPC as net of cost, indicating that NNPC has the right to defray the cost of its operations from earnings.

He also cited the NLNG Act which explicitly provides that NNPC could defray its cost from the dividends, as one of the legal grounds relied upon for the expenditure without recourse to appropriation by the National Assembly.

Expatiating further on the matter, Mr. Abdulrazaq, according to the release, cited the case instituted by some state governments in 1999 seeking the interpretation of revenue on account of their contention that all accruals from oil and gas operations amount to revenue and should be swept into the Federation Account.

The ruling on that case by the Supreme Court in 2002, according to him, was in tandem with NNPC’s position that revenue is accruals net of cost.

“We have provided the legal authority on which we rely to use funds from the NLNG Dividend Account to the Senate. We believe they will reason with us. But if need be, we will seek legal opinion on it”, the CFO stated.

On the general impression that NNPC and indeed the entire Oil and Gas Industry is opaque, Mr. Abdulrazaq contended that in the light of efforts made by the Management of the NNPC since the inception of the President Muhammadu Buhari administration to entrench a culture of transparency, nothing could be further from the truth.

“NNPC is very open and transparent. We publish our NNPC Monthly Financial and Operations reports in the media. No one does monthly reporting, not even the international oil companies or the publicly quoted companies. The best they do is quarterly reports. But we do monthly reports of revenue (profit and loss for the entire corporation, including the subsidiaries). We do operations report on how much oil and gas was produced, sold and the monetary value; how much products the refineries processed and how much was imported and sold by PPMC. We do all these to defuse the perception of opacity. Yet some people still say we are opaque, and I think that is not fair”, he argued.

Abdulrazak disclosed that as part of the stewardship accounting designed to make NNPC’s operations transparent to the public, the inherited six-year unaudited accounts of the corporation have been audited up to date, stressing that the account for 2017 has been fully audited, approved and forwarded to relevant authorities.

On fuel supply and efforts to ensure zero-scarcity throughout the end of year festivities and beyond, the CFO disclosed that NNPC has 2.6 billion litres of premium motor spirit (petrol) in offshore and onshore storage that could last for 52 days at 50 million litres per day consumption.

Also speaking at the event, the Chief Operating Officer, Upstream, Mallam Bello Rabiu, said the major focus of the Upstream Autonomous Business Unit of the NNPC was to drive down the cost of crude oil production and link the Oil and Gas Industry with the economy.

According to him, bringing down the cost of production would lead to cheaper energy cost which would in turn boost industrial and economic growth.

He said security and funding that used to be the bane of Upstream operations have been largely taken care of by the corporation through practical engagement with stakeholders in the Niger Delta region and the cash-call exit programme.

The COO said that as part of efforts to drive down cost, the NNPC was looking at extending the Escravos-Warri crude oil evacuation pipeline surveillance contract model to downstream pipelines to guarantee efficient crude supply to the refineries post-rehabilitation.

“Before now, it was not possible to get crude to Warri and Kaduna refineries. But with the kind of security contract in place for the Warri-Escravos Pipeline, we now have 99% crude oil recovery rate. The balance is paid for by the contractor. That is why we have replicated that model for the Trans-Forcados Pipeline to guarantee security”, Mallam Rabiu explained.

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FG Excited Over Firm’s $600m Investment In Iron Ore, Steel Production

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…to generate 36MW of power

The Federal Government at the weekend, expressed excitement over firm’s $600 million (N183 billion) investment in an integrated iron ore mining processing and steel production.

This was disclosed by the Minister of Finance, Zainab Shamsuna Ahmed, during a meeting with the firm, African Natural Resources and Mines Limited, in Kagarko Local Government Area of Kaduna State, led by Mr Raj Gupta.

According to a statement by the Minister’s Spacial Adviser on Media and Communications, Mr Paul Ella Abechi, the investment will boost the solid minerals sector and the entire economy, which will lead to increased revenue generation and job creation under the diversification policy of the Federal Government.

She said, “In a bid to diversify away from oil and increase government revenues, I met this evening with African Natural Resources and Mines Limited led by Mr. Raj Gupta who are investing $600m in an integrated iron ore mining, processing and steel production project in Kagarko Local Government, Kaduna State.

“This is about the first major investment in the mining sector in more than two decades. The project will have a capacity of 5.4 metric tonnes per annum and will create 3,500 direct jobs and thousands of indirect jobs.”

According to her the steel plant will generate 36 megawatts of electricity to the national grid that would boost the already generated megawatts of power for other economic activities.

“About 36 megawatts of electricity is to be generated from the waste heat which will increase power supply to Kagarko Local Government to help develop other industries and urbanize the local area. The surplus will also be added to the national grid.”

The Minister further explained that the company’s steel will carry out beneficiation, pelletizing and convert iron into direct used iron for steel manufacturing and that it will galvanise the industrial space into a hub of production of finished goods for local consumption and export.

“The integrated steel manufacturing project has its focal point in mining iron ore, beneficiating, pelletizing and transforming into Direct Reduced Iron (DRI) which is the primary raw material in steel manufacturing.”

Expressing optimism the Minister said the project will massively impact on the local people and the nation at large based on the potential it has to transform the socio-economic life of Nigerians.

“This project will drive industrial and community development, generate more power, create employment for locals, substitute imports, crude steel production, royalties and reposition the mining sector”, she stated.

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