The federation accounts allocation committee (FAAC) says members have agreed on the transfer of N24.5 billion to the excess crude account.

Mahmoud Isa-Dutse, permanent secretary in the ministry of finance, made this known on Wednesday while addressing journalists at the end of the meeting.

With this transfer, Isa-Dutse said the ECA  balance will be $1.911 billion.

He said the bulk of the revenue increases came from the non-oil sector, which rose by over N81.25 billion.

“Things have begun to improve. That is why we are beginning to save again,” he said.

“Crude oil export sales volume increased by 64 percent, compared with the 7.72 million barrels from the previous month.

“This resulted in increased revenue from federation crude oil exports sales by $226.9 million. The average crude oil price for the month grew from about $65.72 to about $66.78 per barrel.”

The permanent secretary said the performance would have been better, but there were a few shut-downs at various oil terminals undergoing repairs of leaks as well as routine maintenance.

At present, Shell Petroleum Development Company has declared a force majeure on Nembe Creek Trunk Line.

Brent crude, which is the international benchmark of crude oil recently crossed the $80 mark. It has however dropped to $78 as at Thursday evening.

The federal government has approved the relocation of pipelines along the Escravos channel to curb delay in supply of petroleum products and reduce under-recovery.

In a statement released by Ndu Ughamadu, Nigerian National Petroleum Corporation (NNPC) spokesman, on Wednesday, the relocation is to make allowance for the dredging of Warri Escravos Seaport.

The dredging, which will cost N13 billion, will also include the Apapa Ports.

During a visit by Hadiza Bala Usman, Nigeria Ports Authority (NPA) managing director, to NNPC on Tuesday, Maikanti Baru, NNPC group managing director, said the dredging could take as long as a year.

“Because of the sheer number of the pipelines and the criticality of some of the petroleum products they carry, we are looking at the timelines that would span 12 months to relocate some of the pipelines,” the statement quoted Baru to have said.

“In some of the critical areas, we have agreed that because of supply situations, they would do an initial dredging that would give us at least 10 metres, especially in the Escravos areas.

“The test point for the support of the NPA to NNPC was between December 2017 and February this year because it was really a trying period during the fuel scarcity and the NPA supported us patriotically prompting our coming out of the crisis and it actually helped the nation as well.”

Usman said the NPA will work with NNPC to bury the pipelines deeper so the Lagos and Warri ports will have deeper drafts for bigger vessels.

“We want to work with NNPC on relocating and burying those pipelines deeper so that NPA can dredge and have a deeper draft for bigger vessels to come to Warri and Lagos to enhance the supply of petroleum products and other larger vessels coming into the country.”

Projected revenue from the sale of crude oil may be affected as a number of crude cargoes from June loading programmes have remained unsold.

This is according to trading data received by Reuters.

Out of a total of 60 cargoes from the June loading, buyers have taken up 40 — at a time when July programmes have already been released.

Qua Iboe, Forcados and Bonga along with a few smaller grades released for July programmes were added to the unsold 20 cargoes leading to a large volume of Nigerian crude in the market.

Angola, another West African crude oil trader, has sold 42 out of the 43 cargoes it presented to traders although it was believed that Total sold a cargo at a discounted price to the current price of Brent crude.

As at 10:30am on Wednesday morning, Brent crude traded at $79 higher than the $51 crude oil benchmark for the 2018 budget.

Although the oil sector contributes less than 10 percent to the nation’s gross domestic product according to the latest report released by the National Bureau of Statistics, it accounts for more than 70 percent of the nation’s earnings.

Nigeria’s Bonny Light supply to the market is less than usual as a result of a force majeure declared by Shell after the shutdown of the Nembe Creek Trunk Line (NCTL).

Shell Petroleum Development Company of Nigeria Ltd (SPDC) has appealed for a conducive operating environment in oil producing communities in the Niger Delta region, even as it says it has recorded a total spend of N14.85 billion on social investment projects since 2006 in the region.

In its annual sustainability report released in April, the company said its operating environment in Nigeria worsened in 2017.

According to the report, in 2017, crude oil theft from its pipeline networks rose by 50 percent to 9,000 barrels of oil per day (b/d) from an estimated 6,000 b/d.

It said the increase was largely due to militant activities which led to a shutdown of the Forcados export terminal in 2016.

On Thursday, the oil firm declared a force majeure on Bonny Light, Nigeria’s major crude oil, citing a disruption in production following a leak discovered on the Nembe Creek Trunk Line.

The action would inadvertently lead to a cut off in sales of around 250,000 b/d of the Nigerian crude from the international market.

Igo Weli, general manager, external relations, SPDC, in a statement, said the company seeks a conducive operating environment and hopes for multi-stakeholder cooperation as it commits to its social investment programmes.

The N14.86 billion spent came under the Global Memorandum of Understanding (GMoU) clusters in Rivers State.

“While we will continue to work with government, communities and other stakeholders for the development of the Niger Delta, we strongly appeal for a conducive operating environment since this is only way we can do business and implement the needed social investment projects and programmes,” Weli said.

“The GMoU initiative has opened a new and exciting chapter in the relationship between SPDC JV and communities and empowered the people at the grassroots to take charge of their own development.”

The 36 state governors have threatened to take over the responsibility of subsidising petroleum products in their states based on consumption, following the huge amount of money being spent by the NNPC as fuel subsidy payment annually.

Abdulazeez Yari, governor of Zamfara, disclosed this while responding to questions after the national economic council (NEC) meeting on Thursday.

He said in June, the governors would take decision on whether to take responsibility for the subsidy in their states or not.

He described as outrageous the N800billion being expended by the NNPC as subsidy, saying NEC must decide whether to allow NNPC to continue with the payment or not.
“Our problem is the volume, the quantity of consumption which is not acceptable,” he said.

“Working with the governors so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways.

“For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programme of the federal government, it is about N1.1 trillion, almost 70 per cent of what you are spending on developing the economy.

“If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount that we must look at it, who is benefiting from it.

“So we are coming up with a strategy, we are going to meet in the month of May and June. By next meeting, we will definitely come up with a position of the government at both level of volume of what is being brought into the country and what the state and Federal Government collaborate to check.”

The governor disclosed that the minister of state for industry, trade and investment briefed the NEC on the establishment of the Nigerian Industrial Policy and Competitiveness Advisory Council which was approved by Federal Executive Council (FEC) in 2017.

“The Industrial Council recognises that there is need for collaboration between the Federal Government (FG), State and Local Government to drive the industrialisation agenda,” he said.

“The briefing today was to present the eight initiatives and recommendations from the Industrial Council that requires State Governments intervention.”

Goood news: oil prices hit $80 a barrel on Thursday for the first time since November 2014.

Bad news: Shell Petroleum Development Company (SPDC) on Thursday declared force majeure on the exports of Nigeria’s major crude oil, the Bonny Light, effectively cutting off sales of around 250,000 barrels per day (b/d) of the country’s crude from the market.

Brent crude, the international benchmark against which Nigeria’s crude oil is set, briefly hit $80.18 before pulling back to trade up 57 cents at $79.67 per barrel, Reuters reported.

US West Texas Intermediate (WTI) crude futures were up 41 cents at $72.30 a barrel, also their highest since November 2014.

As of Monday, Brent was up 20 cents at 77.32 dollars a barrel, while US West Texas Intermediate rose 10 cents to 70.80 dollars.

Mohammed Barkindo, secretary general of the Organisation of the Petroleum Exporting Countries (OPEC), attributed the development to efforts by OPEC and non-OPEC countries to re-balance the market through production freeze.

He said general, global inventories of crude oil and refined products dropped sharply in recent months owing to robust demand and OPEC-led production cuts.

“We have now been implementing this decision (declaration of cooperation) for the past 17 months with visible positive outcomes that have been widely acclaimed around the world,” Barkindo had said at the 22nd Oil & Gas Uzbekistan (OGU) conference on Wednesday.

Meanwhile, a spokesman for SPDC told TheCable Petrobarometer that the force majeure was due to disruption in production following a leak discovered on the Nembe Creek Trunk Line, located in Rivers State.

“SPDC declared force majeure on Bonny Light exports effectiveky 08.00hrs, May 17, 2018 following the shutdown of the Nembe Creek Trunk Line (NCTL) by the operator, Aiteo Eastern E&P Company Ltd,” the spokesman said.

Force majeure refers to a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happen.

The incident came barely 24 hours after the senate passed the 2018 budget that was anchored on an oil production of 2.3 million b/d and an oil price assumption of $51 per barrel.

Cutting off 250,000 b/d of the Nigerian crude from the international market is sure to trigger a further hike in global oil prices.

State governors have accused the Nigerian National Petroleum Corporation (NNPC) of fraudulently doubling the nation’s daily petrol consumption from about 30 million to 60 million litres.

The governors made this known on Wednesday after a delegation led by Abdulaziz Yari, chairman of the Nigerian Governors’ Forum (NGF) and governor of Zamfara state, met with Vice-President Yemi Osinbajo at the presidential villa in Abuja.

At the meeting, the governors demanded a thorough probe of oil subsidy payments from 2015 to date, while they demanded that all petrol stations less than 10 kilometres to the nation’s borders be immediately shut.

This followed NNPC’s excuse that the sudden hike in petrol consumption is due to illegal export to neighbouring countries.

As part of their demands, all trucks transporting petroleum products must have tracking device installed in order to monitor their movement to discharge stations and that NNPC must henceforth clearly differentiate its earnings in sales as against taxes before remitting funds to the federation account to avoid unexplained shortfalls.

In attendance at the meeting were Udom Emmanuel , governor of Akwa Ibom state; Godwin Obaseki, governor of Edo state; Seriake Dickson, governor of Bayelsa state; Nasir el-Rufai of Kaduna and Atiku Bagudu, governor of Kebbi state.

Kemi Adeosun, minister of finance and Udo Udoma, minister of budget and national planning, as well as a representative of the NNPC GMD, also attended the meeting which ended at few minutes after 8pm.

While briefing state house correspondents at the end of the meeting, Yari said, “This is the second time we are meeting with NNPC in respect of remittances into the federation account. Governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, more especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the Joint Venture Partners,” he said.

“We met last week with NNPC and we came and briefed our chairman of the National Economic Council (NEC). We raised three issues: one, the issue of royalties. Each and every barrel taken out of the country, there is either 17 or 24 percent of it as royalty and there is 17 or 20 percent as tax.

“So, our main concern is that (DPR) said that the NNPC is not remitting anything from the payment of royalty; what they do is that they transmit direct from the NNPC to the federation account, which is not allowed by the law.

“According the law that established the DPR, section 196 of the Act, says all the royalty should be paid to DPR and then transmitted to the federation account, which is not happening.

“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to federation account with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profits from the sales. So we achieved that.”

The governors also raised concerns over the joint venture cash call claims made by the NNPC and directed that further payments for such should be suspended until the corporation gives details of exactly how much has been paid since 2015.

“At the same time, NNPC is making payment on behalf of Nigeria on cash-call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution. But our main concern is that in 2015, they said about $16.8 billion which is outstanding was not paid by the last administration and they negotiated it down to $5.1 billion according to them,” he said.

“What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding. And we directed them to stop payment until the claims are proven and then we can give further directives. That too was achieved.

“On the issue of cost recovery otherwise called subsidy, it resurfaced again after the efforts of Mr. President. Before now, the oil was $40 per barrel and now it is about $78 a barrel, they are depending largely on importation. Therefore, the cost is higher than what they are selling at the filling station and they need more money.

“When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million litres per day as the consumption of Nigeria. But now with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million litres per day, which we rejected and said no.

“So, many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million litres per day. So, we are wondering where the 60 million litres is coming from. So, we are trying to sort that one out; that one is not yet resolved.

“But, we are now taking a very hard decision; because NNPC said the reason why they were lifting 60 million per day is because our borders are porous, we have taken the decision that any filling station that is 10 kilometres on the border side should be closed by DPR. And then, we will do re-certification according to the needs. Secondly, we have directed the minister of finance in collaboration with the DPR and the NNPC to put tracking devices on every truck in other to monitor where they are discharging the fuel. That is because we are suspicious of the number; we cannot confirm the difference from 30 million litres per day consumption to 60 and 65 million litres per day. So, these are our decisions on the NNPC.”

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has commended the house of representatives over its decision to caution the federal government to suspend the proposed sale of its equity interest in the Nigerian LNG Limited (NLNG).

NLNG Ltd. owns the six-train Bonny LNG plant, Rivers state, and the federal government holds 49 percent shares in the company.

Reacting to the call by the house of representatives on the urgent need to stop the sale of the gas company, Fortune Obi, PENGASSAN’s national public relations officer, said this was in tandem with the union’s position on the need for the government to retain its shares’ ownership in the company.

Obi also stated that the NLNG model has been the best option so far and should be replicated in other failed government ventures such as the refineries.

“The NLNG is one of the most successful ventures that Nigeria has embarked upon since its inception,” the union spokesman said, adding that the international community would perceive Nigeria as a country that is inconsistent in policy and will not take its desire for foreign investments seriously.

He noted that the losses that would accrue from the sales of the NLNG far outweighed its gains, saying that rather than selling the asset, there are other options the government may adopt to resuscitate the economy.

The PENGASSAN spokesperson said that about 18,000 jobs in the sector will be affected if the proposed plan is carried out, stating that government should explore other options to fund the economy rather than selling a viable company like NLNG whose dividends were used to kick start and finance the economy when Nigeria was in recession.

“NLNG has bailed out Nigeria when the country was in recession as proceeds from its dividends were used to finance the economy. Those investors who were clamouring for the FG to sell her shares in NLNG should find another means of injecting their resources into the economy instead of buying a successful company,” he said.

The Nigerian government benefited from NLNG gas exports revenues and dividends which hit $15 billion in 2016, according to data released by the company.

Other partners in the company are Shell (25.05%, Agip (10.04%) and Total (15%).

Ita Enang, senior special adviser to the president on national assembly matters, says the national assembly has not transmitted the petroleum industry governance bill (PIGB) to President Muhammadu Buhari.

Enang said this in a statement issued in Abuja on Wednesday.

“Further to several inquiries by the media, interest groups and the public in respect of the within named bill (PIGB), may I please state that the said bill has not yet been transmitted by the national assembly to the president,” the statement read.

“From my inquiries, the bill is still undergoing standard operating legislative processes of the national assembly preparatory to transmission.”

There have been controversies over the status of the bill.

On March 16, Tayo Alasoadura, chairman, senate committee on petroleum resources (upstream), said the PIGB would be presented for presidential assent by March 30.

But nothing was heard about the assent until Senate President Bukola Saraki tweeted one month later that it had been transmitted to the president.

“After 18 years, President Muhammadu Buhari, has finally received the harmonised copy of the #PIGB from the 8th national assembly,” he had written on Twitter.

UPDATE: Another #PromiseKept by the 8th National Assembly and Senate President, Dr. Abubakar Bukola Saraki.

"After 18 years, President Muhammadu Buhari, has finally received the harmonised copy of the #PIGB from the 8th National Assembly."https://t.co/yMfxKnZsnc

— The Senate President (@SPNigeria) April 28, 2018

The controversy over PIGB is not new.

Years after the original bill, called petroleum industry bill (PIB), was sent to the national assembly in September 2008, lawmakers said there were different versions in circulation.

The senate passed its own in May 2017 while the house of representatives passed its eight months later.

The president has to give assent to the bill before it becomes law.

Under the PIGB as passed by the senate, NNPC will be divided into three main companies: the Nigeria Petroleum Regulatory Commission, which will regulate the sector; the National Petroleum Company (NPC) and the Nigeria Petroleum Assets Management Company (NPAMC).

The NPAMC will take control of NNPC’s upstream assets while NPC will be in charge of crude oil marketing and refining.
PIGB is one of the four segments that the PIB was split into to speed up the passage of the omnibus bill into law.

PIB has been in the works since the tenure of former President Olusegun Obasanjo who handed over power in 2007.

The Nigerian National Petroleum Corporation (NNPC) has handed crude term lifting contracts for a two-year period to an unprecedented number of 50 companies.

Half of the beneficiaries are Nigerian companies, with suggestions that the administration is having an eye on the 2019 general election.

Previous attempts by TheCable Petrobarometer to get the full list of the lucky companies met with a brick wall at the corporation.

Included in the jealously guided list of beneficiaries are Wale Tinubu’s Oando, Sayyu Dantata’s MRS, Tonye Cole’s Sahara Energy, Obateru Akinruntan’s, Obat Petroleum owned and Ladi Bada’s Shoreline

The NNPC had in January conducted an open tender exercise for the 254 bids it received for the lifting of over one million barrels per day (bpd) of Nigeria’s crude, but refused to make public the list of beneficiaries — three months after it was billed to be announced.

Reuters has, however, revealed that the list was delayed by the federal government as it pondered over how it would use the juicy contracts to bolster its electoral fortunes in the 2019 elections.

To back up the assertion, the period of the crude lifting contract will now cover two years as against the usual one year period, thus ensuring the contracts extend beyond the 2019 elections.

“The government may have delayed an announcement this time by several months as it sought to line up more local firms for awards, so it could drum up support for next year’s election,” Reuters reported quoting sources.

NNPC spokesman Ndu Ughamadu, declined comments when contacted by TheCable Petrobarometer to confirm release of the list.

Several officials of the corporation also refused to comment on the matter.

This year’s overall total of 50 foreign and local firms was more than the 39 listed in 2017.

The list last year also included three bilateral government deals.

THE WINNERS

International trading firms and refiners   

1. Augusta Switzerland based
2. BB Energy Lebanon
3. Cepsa Spain
4. Glencore Switzerland based
5. HPCL Indian refiner
6. Litasco Trading arm of
7. Russia’s Lukoil
8. Mocoh Switzerland
9. Petraco Switzerland
10. Petrobras Brazil
11. Sacoil South Africa
12. SEER South Africa’s SacOil
13. Energy Equity
14. Resources Ltd
15. Socar Trading arm of
16. Azerbaijan’s Socar
17. Total    France
18. Trafigura Switzerland
19. Vitol Britain
20. Calson Vitol/NNPC joint
21. venture
22. Sonara Cameroon refining co
23. ZR Energy

 Nigerian companies

1. AA Rano
2. Aipec
3. AMG
4. Arkleen
5. Barbedos
6. Bono Energy
7. Casiva
8. Cretus
9. Emadeb
10. Eterna
11. Gladius Commodities
12. Hinstock
13. Leighton
14. Levene
15. Masters Energy
16. Matrix
17. MRS
18. North West
19. Oando
20. Sahara Group
21. Ocean Bed (Sahara
22. trading subsidiary)
23. Propetrol
24. Prudent
25. Setana
26. Setraco
27. Shoreline
28. Ultimate Gas
29. Voyage
30. West African gas
31. Zitts and Lords
32. Obat Oil & Gas
33. Duke Oil (NNPC
34. subsidiary)

 Deals with governments

1. China
2. India
3. South Africa
4. Turkey
5. Ivory Coast
6. Ghana
7. Liberia
8. Niger
9. Sierra Leone
10. Senegal
11. Togo
12. Malawi