30012018 - 2019: No alternative to Buhari, says el-Rufai

22— Vanguard, TUESDAY, JANUARY 30, 2018
Fuel subsidy payment rises to N17bn in
one month
By Michael Eboh
FUEL subsidy payment
incurred by the Nigerian
National Petroleum Corporation,
NNPC, rose by N9.94 billion to
N16.785 billion. This was to ensure
that the price of Premium Motor
Spirit, also known as petrol, did
not rise above the official rate of
N145 per litre.
Data obtained from the NNPC
Monthly Financial and
Operations Report for November
2017, showed that the subsidy
payment for November
represented an increase of 145.08
per cent from N6.849 billion paid
in October 2017.
The amount expended by the
NNPC on subsidy was the second
highest amount since subsidy on
fuel returned in 2017, after the
N36.27 billion paid by the NNPC
in January 2017.
To this end, the report stated that
the NNPC has spent a total of
N128.855 billion on fuel subsidy
payments between January and
November 2017.
The NNPC had explained that
it cannot be said that it is paying
subsidy on Premium Motor Spirit,
also known as petrol, especially as
the National Assembly had not
made provision for such payment.
Group General Manager, Group
Public Affairs Division, Mr. Ndu
Ughamadu, had explained that the
extra burden it is incurring on the
difference between the landing cost
and the pump price can be
described as business loss.
Ughamadu was clarifying a
statement, he said was wrongly
attributed to the Managing
Director of Petroleum Products
Marketing Company, PPMC, Mr.
Umar Ajiya, suggesting that
NNPC does not require the
National Assembly’s nod to
subsidize petrol.
He said the corporation is alive
to the critical roles the National
Assembly statutorily plays in the
administration of the Nigerian oil
and gas sector and would,
therefore, not undermine the
legislators in their legitimate
business.
Apart from fuel subsidy expenses,
Total Egina FPSO ariving Nigeria
the report noted that crude oil
valued at N1.19 billion was stolen,
rising by 167.07 per cent or
N745.054 million from N445.946
million recorded in October.
However, petroleum products
losses dipped by 2.87 per cent from
N104.075 million in October 2017,
to N101.09 million in November;
while the NNPC recorded
pipeline repairs and management
cost of N7.006 billion, dropping by
35.27 per cent from N10.824 billion
recorded in the previous month.
The report stated that products
theft and vandalism had continued
to destroy value and put the
NNPC at disadvantaged
competitive position, adding that
a total of 1,005 vandalized points
were recorded between November
2016 and November 2017.
Furthermore, the report stated
that the NNPC recorded a trading
deficit of N6.79 billion, higher than
the previous month’s deficit of
N0.41 billion, representing a
N6.39 billion increase in trading
deficit compared to the October
2017 performance.
NNPC’s group operating
expenses for November 2017,
dropped by 23.52 per cent to
N270.8 billion, from N354.08
billion recorded in October.
The report said, “The drop in the
performance is attributable to the
increased cost in upstream
activities as well as the reduced
revenue in the downstream value
chain occasioned by high crude oil
inventory in refineries due to
THE average price
of Organisation of
Petroleum Exporting
countries, OPEC’s basket
of fourteen crudes in the
past one week averaged
$67.64 compared with
$67.21 recorded the
previous week.
According to OPEC’s
calculation, the highest
price of crude was
recorded on January 25,
2018, which averaged
$68.46 per barrel, while
the lowest price for the
period under review
averaged $66.89
unplanned operational shutdown
of Kaduna Refinery and
Petrochemical Company, KRPC
and Port Harcourt Refining
Company, PHRC, which led to
increase loss from the Refineries
in November 2017.
“Also, Integrated Data Services
Limited’s, IDSL, coincidental
winding up of two Seismic Data
Crews – Party 05 in Elele, Rivers
state and JV 209 in Alkaleri,
Bauchi state on 31st October
2017contributed to this situation.
“However, IDSL has since
mobilized for operations in Lafia,
Nasarawa state and Kuzari,
Gombe state respectively in order
to turn back to regime of positive
performance, as year 2018 looks
bright for business in IDSL.”
Total, NNPC ready to take FID on Ikike oil field project
By Sebastine Obasi
THE dearth of new
investments in Nigeria’s
upstream oil sub-sector may soon
be a thing of the past as Total
Exploration and Production
Company in Nigeria and the
Nigerian National Petroleum
Corporation, NNPC are set to
take the final investment decision,
FID, on the Ikike oil field.
Giving the indication at the
arrival ceremony of the Egina
floating production storage
offloading, FPSO, at the Ladol
Island fabrication complex,
offshore Lagos, Mr. Nicolas
Terraz, Managing Director/Chief
Executive, Total Upstream
Companies in Nigeria, said that
Ikike project is the next focus of
Total and NNPC.
He said, “We are working on a
smaller project on our joint
venture with NNPC. It is called
the Ikike project. It is our next
project. We have not started yet.
We are studying security issues.
We are working with NNPC to
reach the FID. It is not exactly
the same size of project as the
Egina, but we will continue with
NNPC and our partners, to grow
activities for the benefit of the
country.” He also indicated that
the project will witness similar
success as the Egina. However,
he neither disclosed the cost of
the project, nor the expected take
off time.
Speaking on the Egina, Terraz
said, “The Egina Arrival is for me
a success. This is the first time
we have such a project in
Nigeria. I am really moved to see
this vessel arrive in Nigeria. It is
the first time we are having such
a big vessel and such activity in
Nigeria. I am proud of this. We
are making history in Nigeria. I
am grateful to the authorities
concerned. We have taken a
unique position to continue to
Fuel Crisis: LCCI
seeks urgent
review of current
policy framework
By Naomi Uzor
THE Lagos Chamber of
Commerce and Industry,
LCCI, said the recent fuel crisis
once again underscores the need
to urgently review the current
policy framework for the
petroleum downstream segment
of the oil and gas industry.
Speaking on the state of the
economy and the state of the
nation, the President of LCCI, Mr
Babatunde Ruwase, said the key
issue of fuel crisis is the pricing
policy while the consequences of
the current policy regime include
disincentive to private investment
in the downstream sector,
especially in refineries and fuel
importation, resulting from the
pricing policy, recurring and
protracted fuel scarcity. He also
listed other consequences to
include considerable loss of manhours
as a result of long fuel
queues and associated traffic
issues on the highways,
transparency issues in the
petroleum products supply chain,
humongous financial
commitment to subsidy payment,
even at a time of high
infrastructure deficit, proliferation
of black market for petrol where
the product sells at very
exorbitant prices, smuggling of
petroleum products across the
borders and Huge pressure on
the foreign exchange market
resulting from massive
importation of petroleum
products.
invest significantly in Nigeria,
notwithstanding the difficult
times. For three years now the
oil price has been below $50 per
barrel. We still have nine months
to go, six months here at Ladol
and three months at the offshore
site.”
Nigeria’s Egina, expected to
produce at least 200,000 barrels
of oil per day, BOPD at optimum,
will reach first oil latest January
2019. Total holds 40 percent
operatorship in the acreage that
hosts this project. The Ikike field
is in a shallow water offshore
Nigeria. It is located in the
eastern part of the Oil Mining
Lease (OML) 99, which also
hosts the iconic Amenam-Kpono
field. Total has been one of the
three most aggressive oil major
operators in Africa, with a mix of
rank wildcat exploration acreage,
near term assets and producing
properties. The company is said
to have signed a high level cash
call exit with Nigeria’s NNPC
which means that the Ikike
project will be funded outside the
Nigerian official budget.
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