NNPC: We can’t ask govt to give us money, planning to achieve IPO soon in compliance with PIA

UGO AMADI

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari has assured Nigerians that the company will no longer ask the government for money rather it will seek for funds like any other organization in the world while affirming that the state oil firm would achieve its Initial Public Offer (IPO) very soon.

this as he noted that key initiatives on the horizon include expanding gas infrastructure to deliver gas across West Africa and potentially, Europe, expansion of liquefaction capacity of NLNG and enabling availability of LPG as a cooking fuel and CNG as alternative fuel for automobiles

The NNPCL boss also added that the company was going to sell some of its oil and gas assets to willing buyers among its competitors in the industry.

He stated this while delivering his keynote address on ‘Redefining Nigeria’s Energy Landscape for a sustainable energy future in Abuja, stressing that NNPC was well positioned to operate as a world-class commercial company that would ensure payment of taxes, royalties as well as dividends to the government and shareholders.

Daily Champion reports that the theme for the ongoing Nigeria Oil and Gas (NOG) Energy Week is “Powering Nigeria’s Sustainable Energy Future”.

In compliance with the provision of the PIA, he said the company would hope to achieve IPO in no distant time.

He stated, “I can tell you we are a competition. We are NNPC Limited. We don’t create rules anymore. We are regulated. We are the competition. We will pay taxes, will pay royalties, like any one of you here; we will also pay dividends to our shareholders which includes many of you in this hall.

“So we are in business as a competition, we are private sector, forget about the fact that we are owned today by the government 100 percent. And by the way, you are also aware that we’re going IPO very soon.”

Disclosing the intention of the NNPC to sell some of its oil and gas assets to willing buyers among its competitors in the industry, Kyari explained, “We will sell part of our equity, it’s in the law, and once that happens, we will not be any different from another company. So, it will be a very different business environment.

“Are we in a position to facilitate business? Yes, our partnerships produce over 80 per cent of the oil and gas in the country. That’s the truth, either directly operating through our own upstream company or through our partnerships with our joint venture partners, and of course, also in the Production Sharing Contracts (PSC) together.”

However, Organization of the Petroleum Exporting Countries (OPEC),  Secretary General,His Excellency Haitham Al Ghais has reiterated that Global demand for all forms of energy is forecast to rise by 23% through 2045

He stated this while delivering his international keynote address on the theme ‘Powering Nigeria’s Sustainable Energy Future at the ongoing Strategic Conference of the NOG Energy Week

It is expedient to note that Oil executives and officials from OPEC have repeatedly made the case for continued investment in oil, warning that prices will otherwise spike higher.

Al Ghais also said calls to limit or stop funding new oil projects were unrealistic and unwise. He acknowledged, however, the need for technology to tackle continued fossil fuel emissions.

“Global primary energy demand is forecast to increase by a significant 23% in the period up to 2045, which means we will need all forms of energy,” he said.

“We will require innovative solutions such as carbon capture utilisation and storage, and hydrogen projects in addition to a circular carbon economy, which has received a positive endorsement from the G20.”

The global oil industry needs $12.1 trillion in investment during the same period, Al Ghais said, adding the industry was not on track to reach that level of investment yet.

Sources close to OPEC have said it will likely maintain an upbeat view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase.

OPEC’s forecast for 2024 will likely be lower than the growth it expects for this year of 2.35 million barrels per day, or 2.4%, an abnormally high rate as the world moves out of the COVID-19 pandemic.

He recalled that a week ago, OPEC  hosted the world energy leaders in Vienna for the eighth OPEC international seminar under the very timely and relevant theme,  “Towards the Sustainable and Inclusive Energy Transition”, where industry experts had the chance to share their insights on topics that will shape the future of the global energy industry.

He explained, “We are currently not on track to reaching that level. To make things worse, we have in recent years even heard calls to limit or stop funding new oil and gas projects. Altogether, this is of course unwise, and is an unrealistic scenario that would be particularly devastating to developing countries who rely on revenues from their precious oil and gas resources to develop their economies.

“Africa for example, is blessed with an estimated 120 billion barrels of proven oil reserves and 18 trillion standard cubic meters of natural gas. However, significant investment will be required to fully realize the potential of these resources to benefit African citizens, while also enabling necessary mitigation actions needed to reduce the carbon footprint of the oil industry.

“In some cases, financial institutions are either limiting and tightening, controlling how money is invested into fossil fuels on the Environmental, Social and Governance (ESG) guidelines. The situation is hindering Africa’s progress despite the fact that Africa accounts for only three per cent of global greenhouse gas emissions.”

However, moving forward, he said OPEC could continue to do its part in promoting a pro-investment environment by taking the actions necessary to encourage oil market stability under the Declaration of Cooperation.

Al Ghais added, “In conclusion, allow me to say that despite the challenges that lie ahead for all of us, in the industry, or countries or nations or peoples,  for OPEC, we are presented with just as many opportunities. And as history has proven time and time again, the only way we will persevere through the hard times is by working together.

“The long standing relationship between OPEC and Nigeria runs deep. Our tightly shared values go all the way back to 1971 when Nigeria joint OPEC. The contributions Nigeria has made to this organization since that time are simply too many to list here today.

“And now, as we look ahead, OPEC will continue to rely on Nigeria’s crucial support and cooperation as His Excellency, President Tinubu takes the country forward to help meet the needs of Nigerians now and in the future.”

Also in his keynote address, the Chairman of IPPG and Group Chief Executive Officer of Waltersmith Petroman Oil Limited, Mr. Abdulrazaq Isa, who was represented by the Executive Vice Chairman of ND Western Limited, Dr Layi Fatona, called for an  expedited closure of ongoing divestments by the international oil companies (IOCs) to mitigate consequences on the industry.

Isa, also congratulated President Tinubu on his election as well as on the bold and progressive pronouncements made by his administration within the first 14 days in office.

He listed the bold policy actions taken by the president as the removal of petroleum products subsidy, the unification of the foreign exchange regimes amongst others, adding that such actions signal strong commitment by the government to proactively address the multi dimensional challenges confronting the country and the oil and gas industry in particular.

Isa, who commended the president for his appointment of a seasoned professional and industry technocrat as a his special advisor on energy, said IPPG looked forward to working together to rapidly recover lost grounds and aggressively grow the oil and gas sector, which is being intricately tied to the socioeconomic development of Nigeria.

According to the IPPG chair, the vision of the Tinubu administration for the petroleum industry was to unlock Nigeria’s energy potential to full economic growth and diversification while improving energy security sustainably.

While describing the foregoing as very clear and purposeful, Isa, pointed out that the aggregate short, medium and long term oil and gas targets were achievable.

However, he maintained that making this happen would require nothing less than laser focused delivery of the following key priorities.

He explained, “Priority area one: need to establish a strong governance framework to guide the implementation of the Petroleum Industry Act thereby by putting together a team of government and industry players with mandate to facilitate and orchestrate systemic interaction and performance across the industry, close gaps where they exist, manage overlaps, concerns and conflicts to ensure overall delivery of the objectives, intent and deliverables of the reforms.

“Priority area number two, strengthening security in Niger Delta to safeguard and stabilize the operating environment, stem crew theft that enables seamless oil and gas production declines and unlock growth within the short to medium term. This will no doubt acquire more intense intelligence gathering, technology-enabled surveillance, robust engagements across key stakeholders, inclusiveness and competent coordination.

“IPPG is committed to helping government in curating and creating the solutions.”

As priority area number three, the IPPG chairman said the government must anchor establishment of value creating midstream and downstream sectors to catalyze a rapidly industrializing Nigerian economy.

He said the Decade of Gas policy of government and the PIA provide adequate foundations to build integrated plans and roadmaps to realize sustained value from the sub-sub sector, adding that the backbone infrastructure currently undergoing construction by NNPC Limited was a key enabler.

He said, however, there were  residual commercial constraints and hurdles, which must be removed in order to unlock and unleash the midstream and downstream sub-sectors.

Isa said another priority area for the government was boosting competitiveness of Nigeria’s oil and gas industry, noting that this can be enhanced by reconsidering a strong enabling independent single regulator.

According to him, “the experiences of liquidity bifurcation in the last few years have been very challenging, causing significant risks on operators across the value chain”.

While recommending a careful revisit of the regime and proceed with necessary amendment in addition to other identified value added proposals, he said the fifth priority area for the Tinubu administration centred around the need to expedite conclusion of ongoing IOC divestment to mitigate unintended consequences and negative impact of delays, including production decline, loss of integrity around facilities, mutual investments, and generally weak stewardship.

.Military bombards vessel  with stolen crude

In another development, Security operatives of the Joint Task Force, Operation Delta Safe, in collaboration with Tantita Security Services Nigeria Limited, have set ablaze an intercepted vessel carrying barrels of stolen crude oil in the Escravos area of Delta State.

The vessel was set ablaze by a military helicopter.

The vessel allegedly owned by a Nigerian registered company, was heading to Cameroon with the cargo onboard when it was apprehended at an offshore location with the captain and crew members onboard.

According to the Executive Director of Operations and Technical at Tantita Security, Captain Warred Enisuoh and the Commander of the Joint Task Force, Operation Delta Safe, Rear Admiral Olusegun Ferreira, the oil cargo was illegally sourced from a well-jacketed offshore in Ondo State with no valid documentation at the time of the arrest.

 

The said vessel had operated in stealth mode for the last 12 years.

 

The discovery was the latest in the series of disturbing findings by the Tantita Security Services Nigeria Limited, a security outfit owned by former militant leader Government Ekpemepulo aka Tompolo and contracted by the Nigerian National Petroleum Company (NNPC) Limited.

 

In October 2022, security agents also destroyed a vessel used for crude oil theft off the Niger Delta creeks after the vessel was reportedly arrested by Tompolo’s firm.

 

The destruction of the vessel generated controversy as some Nigerians fumed at the action of security agents, saying the vessel should have been preserved as an exhibit to prosecute the owners of the vessel.

 

The House of Representatives subsequently said it would investigate the circumstances surrounding the destruction of the oil bunkering vessel by security agents.

 

However, the Federal Government defended the swift destruction of the vessel, saying it was in line with the rules of engagement.

 

The then Chief of Defence Staff, General Lucky Irabor, said the vessel was caught in the act and security agents subsequently set the “instrument of operation” ablaze, noting that no investigation is needed to carry out the action.

 

Oil theft has become a malignant cancer in Nigeria for years with unimaginable volumes of oil being lifted by some cabals in the oil sector.

 

Last year, the NNPC said it uncovered an illegal oil connection from Forcados Terminal that operated for nine years with about 600,000 barrels per day of oil lost in the same period.

 

Similarly, Tompolo said about 58 illegal oil points have been discovered so far since the operation to end oil theft on the waterways of Delta and Bayelsa states began.

 

Former Governor Nasir El-Rufai of Kaduna State had said the Federal Government has failed in the oil and gas business and should get out of the sector.

 

El-Rufai had also called for the privatisation of the NNPC and said the company has been declaring profit without dividends.

 

The ex-governor said that whatever the government manages turns out bad and noted that the sectors doing well in the country like entertainment, telecoms, fintech and others have no government involvement.