In a bid to Curb Mishaps, the federal government has set up a committee peopled with members drawn from the Nigerian Society of Engineers (NSE), Transmission Company of Nigeria (TCN) and the Abuja Electricity Distribution Company (AEDC) to certify meter installers in the country. This was disclosed by the Nigerian Electricity Management Company (NEMSA), the agency responsible for certifying electrical installation personnel.

According to NEMSA, this committee would ensure that only competent and qualified personnel certified by the agency are allowed to work in the industry. This is to preserve ethics and specialization in carrying out electrical installation works, and ensuring that electricity meters are properly installed. Since the commencement of the certification in 2016, NEMSA has validated over 9,000 of electricity contractors. It has taken the certification of electricity metering more important due to the federal government’s current metering policy and regulations. NEMSA is therefore poised to ensuring that quality electricity meters are installed in Nigeria such that collection efficiency and industry liquidity are maintained. It is important to ensure that meters with the right load capacity are fixed in residential and business areas with the right load requirement to avoid blowing up the system. This will remove the havoc that meters have caused and ensure the safety of life and property as fire outbreaks could happen and cause disaster in those premises or buildings.

Nigeria is working on an ambitious Energy Plan towards reducing the energy shortcomings by year 2030. The plan includes the Government’s flagship project to electrify Five-Million households and Twenty-Million people using decentralized solar energy solutions. This was the submission of President Muhammadu Buhari in the High-Level Dialogue on Energy at the sidelines of the 76^th United Nations General Assembly in New York.

Nigeria has developed Energy Transition Plan, with the support of the UK COP26 Energy Transition Council. The plan has laid out the roadmap to reach net-zero and highlights the scale of the effort required, including the development and integration of renewables into current grid infrastructure at tremendous scale and electrification of all sectors. The plan also takes into account, the provision of access to electricity and clean cooking solutions for those currently without access.

According to the president, the scale of financing required for Nigeria to achieve this plan, amounts to over US$400 Billion across the Nigerian economy in excess of business-as-usual spending over the next thirty years. This breaks down to US155 Billion net spend on generation capacity, US$135 Billion on transmission and distribution infrastructure, US$75 Billion on buildings, US$21 Billion on industry and US$12 Billion on transport. This shows the magnitude of resource required to actualize this plan, and a huge opportunity for oil and gas investors.

A total of N6.14 trillion is owed to Nigerian banks by oil and gas operators and power companies in Nigeria.  The debt rose to this amount in June, 2021, from N5.94tn at the end of 2020. This represents about 28% of the N21.89 trillion loans advanced to the private sector by the banks as of June 2021. The bulk of this loan, N5.32 trillion is owe by Oil and gas firms, while the rest, N823.28billion is owed by power firms. Further analysis of the indebtedness shows that the oil firms operating in the downstream, natural gas and crude oil refining subsectors owed N3.99 trillion, while those in the upstream and services subsectors owed N1.33 trillion. The greater part of the power sector loans, amounting to N482.30billion, is owed by power generation firms and independent power producers, while transmission and distribution firms owed banks N340.98billion.

In another angle, seventy-seven international and Nigerian oil and gas companies are currently owing the Nigerian government about $6.48 billion (over N2.6 trillion). The indebtedness comes from the companies’ failure to remit petroleum profit tax, company income tax, education tax, value-added tax, withholding tax, royalty, and concession on rentals. A breakdown of the figures shows that a total of $143.99 million is owed as petroleum profit taxes, $1.089 billion as company income taxes and $201.69 million as education tax, $18.46 million and $972,000 as Value Added Tax (VAT), $23.91 million and $997,000 as Withholding Tax, $4.357 billion as royalty oil, $292.44 million as royalty gas, while $270.187 million and $41.86 million were unremitted gas flare penalties and concession rentals, respectively.

In what seems like a big support to the clamour by host communities that oil and gas companies operating in the country should site their headquarters in their host communities, the senate has given its three committees on Petroleum Resources Upstream, Downstream Petroleum Sector and Gas the mandate to liaise with the Ministry of Petroleum Resources and the Presidential Implementation Committee on the Petroleum Industry Act (PIA), to facilitate the relocation of oil and gas companies operating in Nigeria to their various operational bases in host communities to ensure unhindered operations.

Sponsored by Senator Albert Bassey Akpan and 23 other Senators, the motion seeks to compel oil and gas companies operating in Nigeria to relocate to their host communities and operational bases in order to reduce the high cost of production militating against maximum revenue from crude oil and gas sales to the federation account. The senators noted that the issue of insecurity and militancy brandished as excuses has been addressed by the Petroleum Industry Act, 2021, which placed certain responsibilities on the security, peace and safety of oil and gas infrastructure on the host communities to safeguard and ensure peaceful coexistence between oil and gas companies and their host communities.

With the relocation to these areas, the workers will also relocate to these areas and as such the government of these areas will benefit from the revenue, that is payment of tax, within the localities that they are exploiting this oil and gas, because the workers will no longer claim that they are not resident in these areas.

Members of the Senate this Wednesday confirmed the appointments of the board members of the Nigerian Upstream Regulatory Commission (NURC), in line with the provisions of Sections 11 and 18 (1-5) of the Petroleum Industry Act, 2021. The Senate Committee on Petroleum Resources had submitted a report, which showed that the nominees demonstrated sufficient knowledge of the workings of the petroleum industry, especially the upstream petroleum sector, as well as the economics of petroleum exploration and production. This formed the basis for the confirmation.

By the approval of the board members for the commission, the Department of Petroleum Resources and its leadership led by Engr. Sarki Auwalu has ceased to exist. The NURC has automatically replaced the Department of Petroleum Resources and assumes its responsibilities. The Petroleum Industry Act, 2021 gives NURC enormous and huge responsibility to set and establish the Commission. All activities in the upstream subsector of the oil and gas industry will hence forth revolve around this new board.

The members of the board are Isa Modibbo – Chairman; Gbenga Komolafe – Chief Executive; Hassan Gambo – Executive Commissioner, Finance and Accounts; and Rose Ndong – Executive Commissioner, Exploration and Acreage Management. The new board has a responsibility to provide a solid and stable foundation for Commission.

Good news to everyone in Nigeria as the federal government has finally shelved the idea of removing petroleum subsidy, at least for now. The minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has announced the resolve of the federal government to jettison its earlier plan to remove subsidy on petroleum products which was billed to commence by July this year. This was corroborated by the Minister of State for Petroleum Resources, Chief Timipre Sylva, who stated at a different forum that subsidy paid on the pump price of petrol would remain for now. The suspension follows threats by labour unions in the country to embark on strike to make sure that the any of such implementation is reversed.

The federal government initially planned to remove subsidy on petroleum products from July. This was in line with the provisions of the passage of the Petroleum Industry Act (PIA), that all petroleum products should be deregulated. According the National Executive Council (NEC), the removal of subsidy will see a pump price of fuel rise from the current N162 to about N400. Given the ripple effect of previous increase in the pump price, the cost of transportation would have led to the hike in the price of other products, thereby increasing inflation, a situation that would have further depleted the income of consumers.

for the plan to hold, the government has to seek the intervention of the national assembly to suspend a portion of the PIA, as well as present a budget for the approval of subsidy to the national assembly, to cover subsidy payment from July till a time deemed appropriate for its eventual removal. This will help government not to breach a constitutional as well work towards removing when the people would have made significant arrangements for absorbing the shocks that will come with the removal, such that the impact and consequences will not add to hardship.

The government should use this period to put in measures such as deployment of an alternative to the Premium Motor Spirit (PMS) and also the roll out of enhanced refining capacity in the country, including the 650,000 barrels per day Dangote Refinery and also the rehabilitation of the four national refineries that have a combined capacity of 450,000 barrels per day. Manufacturers should as work out strategies to absorb the expected cost such that the burden of such increase will not be completely transferred to the consumers.

In line with the provisions of the Petroleum Industry Act (PIA), 2021, signed into law recently by the president Mahammadu Buhari, the NNPC Limited has been incorporated as a limited liability company by the Corporate Affairs Commission (CAC). The Act requires the Minister of Petroleum Resources under section 53(1) to cause for the incorporation of the NNPC Limited within six months of the enactment of the PIA in consultation with the Minister of Finance on the nominal shares of the Company.

Since the passing into law of the PIA, 2021, the president had in September ordered the Group Managing Director of the NNPC, Mr Mele Kolo Kyari, to take necessary steps to ensure that the incorporation of the NNPC Limited in accordance with the provisions of the PIA 2021. Consequently, the preside had also approved the appointment of the Board and Management of the NNPC Limited, whose tenure are to commence from the date of incorporation of the company with Senator Ifeanyi Ararume named as the Chairman of the Board.

With the incorporation of NNPC limited, all assets and liabilities of the NNPC will be transferred to NNPC Limited, government has also indicated interest to fulfill relevant sections of the Act, one of which is the intention to set in motion the process of immediate commercialization and privatization of not only the operation of, but also a possible future private ownership of shares in the NNPC Limited. NNPC limited also retains all Guarantees against government and NNPC as well as their employees and Conditions of Service.

So far, the government has shown readiness to implement that Act. It is expected that this swiftness will subsist. The PIA Act especially as concerned with the NNPC limited holds a lot of promises which can only come through if well implemented. The NNPC Limited is expected to compete with the best of other national oil companies globally, and take its pride of place among corporate giants of repute not only in Nigeria but also in the global oil and gas industry.

Investment opportunities worth about $3.097 billion currently exist in the country’s condensate refineries’ space. This was revealed by the Nigerian National Petroleum Corporation (NNPC) at the 15th Oil Trading and Logistics (OTL) Africa Downstream Week. the NNPC stated that Nigeria’s demand for petroleum products is expected to grow from 15.1 million MT in 2020 to 17.3 million MT by 2025, requiring that the refining capacity of the country must grow to about 1.52 million barrels per stream day (MBPSD) to meet its petrol requirement in the next four years.

The NNPC is currently refining about 445,000 BPSD and when completed, the Dangote Refinery will about 650,000 BPSD. These will only amount to about 60 per cent and nameplate capacity, respectively, would supply 76 per cent of that requirement, leaving a shortfall of about 17 million litres of PMS daily. Through the private sector driven co-location at the existing facilities in PHRC and WRPC, respectively, the NNPC is adding 215,000 BPSD of refining capacity. Modular refineries are also adding capacities, such as the 5,000 BPSD Waltersmith refinery, which will be upgraded to 50,000 BPSD. The condensate refineries are expected to add the remaining 250,000 BSPD through the partnership. The co-location and condensate refineries will close the PMS supply-demand gap and create positive returns to the investors.

The NNPC therefore expects an investment of about $3.097 billion in condensate refineries to close this gap to improve the supply and distribution of petroleum products, revamp LPG infrastructure and build CNG plants.

The Organisation of Petroleum Exporting Countries (OPEC) said as part of the estimated $1.5tn that would be invested in the downstream sector of the oil and gas industry from this year till 2045, Nigeria and some other developing nations will get about $450bn worth of new refinery projects and expansion of existing units.

OPEC recognized that last year’s COVID-19 pandemic driven oil demand shock led to the closure of numerous refineries worldwide, and that the likelihood of further closures in the coming years is high. It therefore deemed it fit to bridge the supply gap so as to bring stability in the oil market. This will restore the losses suffered as a result of closure of many refineries during the COVID-19 pandemic and therefore contribute greatly to the post-pandemic economic recovery. OPEC expects about 6.9 million barrels per day of new refining capacity between 2021 to 2026, mostly in the Middle East, Asia-Pacific and Africa. It expecting Africa’s potential refining capacity to start increasing in 2022 at just below 0.4mb/d, before reaching just above 1mb/d in 2026. Additionally, OPEC is collaborating with 10 non-OPEC countries under the “Declaration of Cooperation” umbrella. 

The organisation had earlier mapped out a cumulative oil-related investment requirements amounting to $11.8tn in the 2021-2045 period, about 80 per cent, or $9.2tn of which will go into the upstream, while $1.5 and $1.1tn will be invested in the downstream and midstream, respectively.

The Nigerian government has launched the Opening Extractives Programme (OEP). OEP is a global five-year scheme meant to accelerate progress of beneficial ownership transparency in selected resource-rich countries. The programme is a global initiative to support national governments to deepen implementation of beneficial ownership (BO) transparency.  As one of the countries selected for the pilot countries for beneficial ownership, OEP will help Nigeria dismantle the several roadblocks erected by companies operating in the sector in the past, and unveil the beneficial owners (BO) or real owners of assets in the Nigeria's oil, gas and mining sectors. It will accelerate open disclosure of future oil and gas assets' ownership in the country. It is part of the ongoing reforms in the extractive industries meant to stem corruption and money laundering in the sectors.  The implementation of OEP will strengthen natural resource governance in the country, and also help resource-dependent nations, like Nigeria to earn more money from their resources as information is made easily accessible.

One of the dangers to the collective development aspirations of developing nations, especially Nigeria was secrecy in corporate ownership of assets in the extractive industries. Anonymous companies remained a major obstacle to fighting money laundering and corruption as they enable political actors carry out their criminal acts thereby preventing Nigeria from getting the full benefits of its natural resources. Anonymous companies have tentacles across the globe. Opacity in any part of the globe is a threat to openness all over the world and regardless of the location, the world is at risk of the dangers posed by this anonymity. Therefore, lifting the veil of secrecy over the ownership of extractive assets is very vital. This is even more important, given the country's history of Nigeria in the fight against corruption, insecurity, terrorism financing, money laundering and illicit financial flows which have become the bane of the society. The new Petroleum Industry Act (PIA) now mandates the upstream industry regulator to disclose beneficial owners of licences, leases and others. The PIA has therefore brought about the much-desired assurances and trust for investors in the Nigerian oil and gas industry.

Although Nigeria has in the past committed to opening a register of all beneficial owners of oil companies operating in Nigeria, signing of open government partnership and deployment of open data instruments, the launch of OEP has institutionalized beneficial ownership reporting, thereby moving away from the experimental stage and providing for sanctions for defaulters. OEP has helped the Nigerian Extractive Industries Transparency Initiative (NEITI) develop the first set of templates for gathering information and data on who the real owners of Nigeria's extractive assets are. This completely new area of work for NEITI described as a “game changer” has helped to push the boundaries of transparency and accountability in the extractive industries. Part of the challenges encountered so far in the use OEP include outright refusal of some companies to fill the NEITI audit templates specifically designed for BO reporting, discrepancies between beneficial owners' data and the one provided by the Corporate Affairs Commission (CAC), etc.

In order ensure that the menace of secrecy in ownership of oil and gas nstitutions is halted, NEITI has signed a Memoranda of Association (MoUs) with the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigerian Financial Intelligence Unit (NFIU). It has also fully automated its data collection process. The implementation of this global standards for the promotion of an open and accountable system in the management of extractive resources will make a significant impact on Nigeria.

On its part, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has fully committed to working with NEITI to deepen Nigeria's implementation of contract transparency and beneficial ownership disclosures in the country in a bid to ensure that the revenues from natural resource assets support national development and help reduce poverty. NURC has implemented beneficial ownership reporting system, it is a statutory requirement which demands full disclosure of beneficial ownership information. It has developed the Nigerian Oil and Gas Asset Beneficial Ownership Register (NOGABOR) portal by the commission's ICT team and is live. The commission is also engaging the oil and companies to ensure their mandatory compliance. It has also committed to collaborating on maintaining information on beneficial ownership, maintain data on companies that own extractive licences as well as create a better and healthy business climate. This is to grant citizens the opportunity to be aware of who they are doing business with or competing against and also to encourage appropriate stakeholder engagement as part of Nigeria's open government action plan.

OEP will be jointly implemented by the Extractive Industries Transparency Initiative (EITI) and Open Ownership. So far, the Oil Producers Trade Section (OPTS), and a body of 29 major oil companies, have pledged commitment to the OEP.