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NNPC now controls 14% retail business, to open more stations – Baru

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Dr Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), says the corporation’s downstream subsidiary, NNPC Retail Limited, now holds 14 per cent of the share of petroleum products retail business in Nigeria.

Baru said this in a statement signed by the NNPC Spokesman, Mr Ndu Ughamadu in Abuja on Tuesday.

According to Baru, despite being the market leader in the sector, the company will establish more mega stations and is in the process of identifying the areas where such stations will be economically viable.

Baru explained that NNPC Retail would also continue to set up standard stations that would fit into the domains where they operate.

He disclosed that the focus of the management of NNPC, as owners of the company, was to ensure that its stations were in every nook and cranny of Nigeria.

Speaking at the 1st to 5th Annual General Meeting of the NNPC Retail Limited, Baru said, ”Today’s AGM is in line with our drive to sanitise all our books and bring them to currency.

”The management of the NNPC is committed to ensuring that the books of all the entities within the NNPC are up to date.”

According to him, the meeting combined all the accounts of 2012, 2013, 2014, 2015 and 2016, which have all been audited and the Board of Directors have recommended them to the shareholders at the meeting.

He urged the management of NNPC Retail to focus on its non-fuel products and services, particularly those with the potential to make lots of profit.

The statement also quoted the NNPC Chief Operating Officer, Gas and Power, Mr Saidu Mohammed, as saying that the management and staff of the company were committed to enhancing the NNPC Retail’s non-fuel businesses.

He said it would incorporate fast food outlets, Liquefied Petroleum Gas and super markets into some of the NNPC filling stations that have adequate space.

”We are committed to growing the NNPC Retail business particularly to drive the market share much higher and by expanding the reach through filling stations directly owned or through affiliate stations,” Mohammed said.

In his opening remarks, the Managing Director of the Company, Mr Yemi Adetunji, said the impressive results were achieved largely through the support of the shareholders.

”We have all come together with a pledge to deliver value to the citizens of Nigeria and also give value back to our shareholders,” Adetunji assured.

NNPC Retail Limited commenced operations in August 2002 when the first Retail outlet was commissioned in Lagos to market petroleum products to the public.

However, the News Agency of Nigeria (NAN) reports that some of its stations, such as the mega stations on the Kubwa expressway and along the Airport road, both in Abuja, have been shut down for months now.

Sources at the Department of Petroleum Resources told NAN that the mega station along the Kubwa expressway is embroiled in a court case hence they could not comment on the issue.

NNPC’s foray into products retailing was initially a strategic move intended to provide the corporation with a vehicle for intervention in the market during periods of emergency and avoidable supply disruptions.

It was also to serve as benchmark for key players in the distribution chain and ensure safe, orderly and profitable retailing of products in the country.

It also aims to integrate its upstream and downstream businesses in line with international best practices.

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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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Economist predicts doom for Africa

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Professor Paul Collier, one of the world’s most influential development economists, has warned that Africa’s “easy decade” of accelerated economic growth is coming to an end.

He said that the only accelerated job creation and integration will ensure sustainable growth and development across the continent.

Dr. Collier, Professor of Economics and Public Policy in the Blavatnik School of Government at the University of Oxford, was delivering a keynote at the African Economic Conference 2018, hosted by the African Development Bank in Kigali, Rwanda.

He was spoke on the first day of the Conference at a high-level panel on “Drivers, Opportunities and Lessons for Africa’s integration”, comprising experts as well as high-level policymakers, who provided their reflections and perceptions on regional and continental integration.

“Africa’s easy decade is over; but the last decade of African growth was not sustainable. Now Africa must focus on its big resource – its young people. No other continent has anything like such a huge influx of young labour. Productive jobs are the priority,” Collier said.

“Young people can’t create priority jobs by themselves. Those jobs have to be created, so the prime task of policymakers in Africa over the next decade is to create productive jobs for young people at a rate that has never happened before.”

Collier added that connectivity between African countries will unlock the potential of many countries, and this connectivity has to be in terms of both physical transport and political ideology.

“Small countries are doomed to poverty unless they have open markets and free societies. And yet, the typical African country is small, with closed markets. That is a disastrous combination. So the African Continental Free Trade Area is a very important step forward,” he said.

The African Development Bank has pledged full support to the Continental Free Trade Area as part of its High 5 strategy to Integrate Africa and has invested more than $20 million over the past five years to support the institutional and human capacities of the Continental Free Trade Area Secretariat.

Another high-level panelist, Professor Ademola Oyejide, the Emeritus Professor of Economics, University of Ibadan and Chairman of the Centre for Trade and Development Initiatives, noted that regional integration must drive overall continental integration.

“We should not destroy regional economic communities by protectionism and unnecessary barriers to trade. We as African leaders are not in the business of designing theoretical regional programmes: we expect real progress from the regional blocs,” he said.

Professor Klaus Zimmermann, President of the Global Labor Organization, added, “Africa is now on the right path and has to move in the direction of the AfCFTA. One of the most important playing cards in this game is the people of Africa.”

A common message from other high-level panelists, such as Prof. Emmanuel Nnadozie, the Executive Secretary of the African Capacity Building Foundation, was that governments must adopt policies to enable their countries to achieve economic diversification and reduce their dependence on primary commodities.

The Continental Free Trade Area is expected to boost intra-African trade by up to $35 billion per year, creating a 52% increase in trade by 2022; and a vital $10 billion decrease in imports to Africa.

In addition, the African Development Bank Group is accelerating the impact of its flagship Jobs for Youth in Africa (JfYA) Strategy (2016-2025) designed to support African countries in overcoming youth unemployment and underemployment.

The goal of the strategy is to create 25 million jobs for African youth over the next decade and to equip 50 million youth with employability and entrepreneurial skills.

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