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Video: NNPC celebrates passage of PIB, explains equity acquisition in Dangote Refinery

Nigerian National Petroleum Corporation (NNPC) starts its weekly activities with clarification of its position on planned acquisition of equity participation in Dangote Oil Refining Company (DORC).

By Edith Ike-Eboh & Emmanuel Afonne

The Nigerian National Petroleum Corporation (NNPC) started its weekly activities on Tuesday with clarification of its position on the planned acquisition of equity participation in the Dangote Oil Refining Company (DORC).

The Group Managing Director (GMD) of the NNPC, Malam Mele Kyari, who made the clarification at two different TV Breakfast Shows in Abuja, noted that the corporation was consistent with its strategy to guarantee energy security for the nation.

Kyari said NNPC was working hard to also expand its business portfolios.

The NNPC GMD said investments in other ventures of the oil and gas industry such as petrochemicals and fertiliser plants was part of the reasons it decided to acquire 20 per cent equity in the DORC.

“As a matter of strategy, we know that we have to expand our portfolio; we know that we have to take equity in very many assets.

“Today, we have equity in a number of other smaller assets and businesses in fertiliser and methanol plants.

“We know that doing this is a good business for NNPC and it will improve our balance sheet,” Kyari said.

NNPC GMD, Malam Mele Kyari
NNPC GMD, Malam Mele Kyari

He said the equity acquisition in the Dangote Refinery was not a done deal yet contrary to insinuations in the public space as NNPC would still need to secure the approval of the Federal Executive Council (FEC) to conclude the plan.

“There are international processes for evaluating assets. We in NNPC are not an exception as no bank will give you loan without following the laid down processes.

“We are not going to take a kobo of government money to buy this equity. We are going to borrow on the back of the dividends that will come from the Dangote refinery,” Kyari added.

According to him, NNPC is vigorously pursuing the rehabilitation of its existing refineries besides its plan to acquire equity in several other business portfolios in five other private refineries; modular and condensate refineries in Edo, Delta, Rivers and Akwa Ibom States.

Speaking in a similar vein, Chief Operating Officer, Refining and Petrochemicals, NNPC, Mustapha Yakubu, denounced media reports alleging fraudulent motives in the proposed equity acquisition in the Dangote Refinery.

He said there was no iota of truth in the media reports alleging that there were some underhand dealings in the plan to acquire shares in the Dangote Refinery.

“The planned investment in DORC is one out of many other planned investments in domestic refining, including development of crude oil modular refineries and condensate refineries near crude sources to curb pipeline vandalism.

“I am strongly in support of the Federal Government’s overall energy security strategy which indeed is part of my KPIs as COO, R&P.

“I wish also to state that, to the best of my knowledge, there was no such plan or fraudulent motive behind the equity acquisition arrangement with the DORC or any of the other private refineries that the Corporation is in talk with,” Yakubu said.

He urged members of the public to disregard such reports as they were obviously designed to scuttle the Federal Government’s energy security agenda for the nation.

Also in the week, the NNPC received bids from 53 companies to provide Maintenance and Operations (O&M) Services for the refineries post-rehabilitation.

This was disclosed at the public opening of bids submitted for the contract which held at the NNPC Towers, Abuja.

Chief Operating Officer, Refineries and Petrochemicals, NNPC, Engr. Mustapha Yakubu, said the exercise was part of NNPC management’s effort to guarantee the nation’s energy security by getting the best O & M service providers to run the refineries on a sustainable basis.

The event held virtually with representatives of firms that submitted bids for the contract in attendance.

Also speaking, the Group General Manager, Supply Chain Management, Mrs Aisha Katagum, restated that NNPC was committed to a transparent and accountable bidding in the entire selection process.

General Manager, Supply Chain Management, Mrs Sophia Mbakwe, said a proper evaluation of the bids would be carried out before proceeding to the technical and commercial stage of the process.

Mbakwe said the list of successful companies would be made available on NNPC website soon.

On hand to observe the process were the representatives of the Nigeria Extractive Industries and Transparency Initiative (NEITI), Bureau of Public Procurement (BPE), and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).

The National Union of Petroleum and Natural Gas Workers (NUPENG) and the Federal Ministry of Finance, were also on ground to observe the process.

Still in the week under review, the Nigerian Petroleum Development Company (NPDC), one of the flagship upstream subsidiaries of the NNPC, partnered with the Edo State House of Assembly to curb infrastructure vandalism and youth restiveness.

The move was part of efforts to strengthen partnership with host communities in the Niger Delta.

Managing Director of NPDC, Engr. Mansur Sambo, who received members of the Edo State House of Assembly in his office in Benin, Edo, reiterated President Muhammadu Buhari commitment to tackle unemployment by empowering members of its immediate community.

The MD informed the Members that NPDC has implemented many CSR projects in Benin such as building of hostels in University of Benin Teaching Hospitals, payment of bursaries to students and building of block of classrooms to several schools around its host communities.

He assured of a robust and clearly defined cordial relationship with the House for the overall good of the State.

Speaker of the Edo State House of Assembly, Mr Marcus Omobu applauded the NPDC for positively impacting the State in their CSR activities.

On Thursday, the ninth National Assembly made good its promise to pass the Petroleum Industry Bill (PIB) with the Senate and House of Representatives passing the Bill and thus breaking the jinx of delay which has plagued it over many years.

The passage of the PIB was a significant step in its over 12-year legislative journey to becoming a law in the country.

It would still go through the process of harmonisation by both chambers of the National Assembly before it is sent to the President for assent upon which it becomes a valid law of the land.

One of the provisions that would need to be harmonized is that of the contribution of oil firms to the Host Community Development Fund.

While the Senate approved three per cent, the House of Reps approved five per cent of annual profit made by oil firms.

Also approved in the bill is 30 per cent of profits accruing from oil and gas operations by the NNPC to be set aside for exploration of oil in the frontier basin.

The proposed law also stipulates that all exploration of frontier basins would fall under the purview of the Upstream Regulatory Commission.

Before passing the Bill, the Senate held a closed session with the Minister of State for Petroleum, Chief Timipre Sylva, and the GMD NNPC, Mele Kyari.

President of the Senate, Sen. Ahmad Lawan, said the bill was passed for the growth and development of the Nation’s Oil and Gas Industry.

Speaking in a similar vein, the Speaker of the House of Representatives, Femi Gbajabiamila, hailed the lawmakers for the passage of the controversial bill, describing it as significant achievement for the House and Nigeria.

Also, Sylva applauded the ninth National Assembly for passing the PIB which he said would be a game-changer for the nation’s Oil and Gas Industry.

On his part, the Group Managing Director of the NNPC, Malam Kyari, noted that the PIB would provide a win-win scenario for the host communities, investors and operators in the nation’s Oil and Gas Industry.

The PIB is a ‘Bill for an Act to Provide Legal, Governance, Regulatory and Fiscal Framework for the Nigerian Petroleum Industry, the Development of Host Communities; and for Related Matters.

It started its journey when the Oil and Gas Implementation Committee (OGIC) which was set up by the President Olusegun Obasanjo administration in 2000 was mandated to draft a bill to reform the industry.

The PIB has been a constant piece of legislation in the National Assembly since 2008 till it was passed on July 1.

On the global scene, oil prices were broadly steady heading for monthly and quarterly gains after some data suggested United States of America crude stockpiles were shrinking.

Brent crude for August delivery rose eight cents to close at 74.76 dollars per barrel.

However, the underlying dated Brent contract is above 75 dollars per barrel.

The West Texas Intermediate (WTI) rose by seven cents at 72.98 dollars per barrel.

Meanwhile, the Market Intelligence Department of NNPC’s London Office reported that crude came under pressure late in the session in close correlation with the dollar’s rising strength, but still managed to close in the black.

The crude oil outlook remains skewed to the upside despite a long rally.

An Analyst, Brian LaRose said several key support levels must be breached to make the case for a more structural pullback in prices.

For now, Brent is trading closer to resistance around 75.50 dollars per barrel per day than its nearest key support just north of 73 dollars barrel per day the analyst stated.

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