NNPC Weekly: Plans To End Petroleum Products Diversion Begin

Afonne Emmanuel
May, Sun, 2022

Oil & Gas

NNPC Weekly: Plans to end petroleum products diversion begin

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NNPC

By Edith Ike-Eboh/Emmanuel Afonne

Abuja, May 29, 2022 (NAN) The Nigerian National Petroleum Company Limited (NNPC Ltd.) started its activities for the new week with a meeting with major marketers of petroleum products in the nation’s downstream sector.

The aim of the meeting was to grow a strong determination to sustain energy security for the country and avoid diversion of petroleum products.

The meeting which held at the NNPC Towers, Abuja, had in attendance the Major Oil Marketers Association of Nigeria (MOMAN), the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and Independent Marketers, on the need to curb products diversion.

The Group Executive Director, Downstream who was represented by the Managing Director (MD), Petroleum Products Marketing Company (PPMC), Mr Isiyaku Abdullahi, said that NNPC as the sole importer of petroleum products was in a critical situation that required the solid cooperation of the marketers to sustain product availability to Nigerians and reduce burden of high evacuation costs on government in terms of under-recovery.

Abdullahi said that the company was concerned that in spite of the high truck-out of Premium Motor Spirit (PMS) from depots across the country, the market was still experiencing shortfalls, noting that diversion of products had been identified as a likely reason for the gap.

He appealed to the marketers to activate the Corporate Social Responsibility (CSR) component of their businesses to support both the Federal Government and the NNPC in sustaining energy security for Nigeria.

Abdullahi stressed that such gesture would help in cushioning the effect of the current global energy crisis.

On his part, the Executive Secretary of MOMAN, Mr Clement Isong, said that NNPC was playing a key role in keeping the country well supplied in terms of petroleum products, especially at a critical time when the world faced inflationary problems.

Speaking in a similar vein, the Executive Secretary of DAPPMAN, Mr Clement Isong, expressed satisfaction with the outcome of the meeting, assuring that DAPPMAN as a responsible organisation is committed to ensuring efficient supply and distribution of petroleum products across the country.

Meanwhile, the NNPC Ltd. cautioned that the current price volatility in the global energy was likely to worsen if banks and other financial institutions continue to avoid funding gas projects.

The Group Managing Director/Chief Executive Officer of NNPC Ltd., Malam Mele Kyari, gave the warning at the 28th World Gas Conference 2022 which held at Daegu, South Korea.

Kyari who spoke against the backdrop of stifling funding for new oil and gas projects due to environmental concerns said: “In many jurisdictions, gas is nearly always associated.

“So, you have to turn the table to see if you can get non-associated gas so that banks and financial institutions can put their money into it.

“If that doesn’t happen, then you sure have the constraints of financing and the opportunity will now turn into a crisis.

“I think that is what we are trying to solve to see how we can turn this so that the facility that we are building or the facilities we are going to build will have enough gas to process and deliver into the market.

“Honestly, it is a huge opportunity for the financing sector, I know for sure in our own perspective we have seen a number of projects that can come up very quickly.

“Mostly, the LNG facilities where you can convert gas to chemicals and these are really coming up in their numbers across many National Oil Companies (NOCs) that I am aware of.

“The immediate future is getting the right financing, the right mix, and also for the finance institutions to recognise that except they invest today, what we are seeing today in terms of pricing can be something much more to manage in the next two three years to come.”

Kyari said the NNPC Ltd. was not averse to the push for carbon neutrality, adding that funding gas projects was a vital decision to be made to avert future crises.

At the 26th Conference of Parties (COP26) which held in Glasgow, Scotland in 2021, African countries advocated for energy justice in the drive for transition to cleaner fuels.

In another development, the NNPC Ltd. set record as the first exploration and production company to acquire environmental audit certification in the Federal Capital territory, Abuja, since the Environmental Impact Assessment (EIA) law was establishment about 30 years ago.

The attainment of this feat by the Company was disclosed by the Permanent Secretary of the Federal Ministry of Environment, Mr Hassan Musa, during the presentation of a certificate of Environmental Audit to the NNPC at the NNPC Towers, Abuja.

The Permanent Secretary who was represented by the Director, Environmental Assessment, Dr Abbas Suleman, commended the NNPC for its consistency and commitment to environmental global best practices.

Hassan stated that though environmental audit was a legal requirement by federal law, the bold step taken by the current NNPC Management to carry out an environmental impact assessment of the NNPC Towers reinforces the company’s reputation as a law abiding and responsible corporate citizen.

Narrating his experience with the company during the audit exercise, the Permanent Secretary said that he saw firsthand the Management’s commitment to performance excellence, adding: “NNPC does its things gently, quietly and steadily with the whole idea of achieving positive results”.

Speaking at the event, the Group Executive Director (GED) Corporate Services, Mrs Aisha Katagum, who was represented by the Group General Manager, Human Resources, Mr Yinusa Yahaya, appreciated the Federal Ministry of Environment for the honor of implementing the audit process.

She also appreciated the award of the certification to NNPC, especially at this crucial stage of the Company’s transition from a corporation to a limited liability company.

Still in the week under review, the NNPC Ltd. and its partner, Sahara Group, took delivery of two 23,000cubic meters Liquefied Petroleum Gas (LPG) vessels for their joint venture company, WAGL Energy Ltd.

The event which held at the Hyundai MIPO Shipyard in Ulsan, South Korea, also witnessed the official naming of the vessels as Mt Sapet and Mt BaruMK.

Speaking at the occasion, the GMD/CEO of NNPC Ltd., Malam Mele Kyari, said the investment in the LPG carriers was part of efforts to deepen domestic gas utilisation in keeping with the Federal Government’s aspiration to use gas as the linchpin to drive the nation’s economic and industrial growth.

He disclosed that an order for three additional new vessels was at an advanced stage, adding that “we have a target of delivering 10 vessels over the next 10 years”.

On his part, the Executive Director of Sahara Group, Mr Temitope Shonubi said WAGL successfully operated two mid-sized LPG Carriers – MT Africa Gas and MT Sahara Gas in the region and had delivered over six million CBM of LPG across West Africa, while keeping to global standards.

“With the new vessels, we are set to promote and lead Africa’s march towards energy transition,” he said.

The two new vessels, Mt Sapet and Mt BaruMK, were expected to sail out in June and September 2022 and would increase WAGL’s total fleet to four.

All four vessels were built by Hyundai MIPO Dockyard, a foremost global manufacturer of mid-sized carriers.

WAGL Energy Limited is a joint venture company between NNPC and Oceanbed (a Sahara Group Company) which is driving NNPC’s five-year $1 billion investment plan announced in 2021 to accelerate the decade of gas and energy transition agenda.

Also, at the event were the Ambassador of Nigeria to South Korea, HE Aliyu Magashi; NNPC Group Executive Director, Gas & Power, Mr Mohammed Ahmed and Group Executive Director, Upstream, Mr Adokiye Tombomieye, and other dignitaries.

In a related development, the GMD/CEO of NNPC Ltd, Malam Mele Kyari called on oil and gas companies operating in Nigeria to invest more in gas transportation in order to boost the nation’s gas exports to the global market.

Kyari made the call at an agreement signing ceremony between Hyundai Mipo Dockyard Company Limited, Temile Development Company and NLNG Ship Management Limited (NSML) for the construction of a 23,000 M3 LPG/NH3/VCM Carrier and the supervision of the ship construction work on the sidelines of the 28th World Gas Conference 2022, in Daegu, South Korea.

He said it had become imperative for Nigeria to develop more channels for getting gas into the international gas market considering the pivotal role gas had assumed in the global march towards cleaner energy sources.

According to him, there is need for Nigeria to take advantage of the global acceptance of gas as a transition fuel by massive investment in gas transport infrastructure.

“We expect to see more and more Nigerians coming forward to build a transportation medium for gas and other liquid that we handle,” Kyari stated.

He assured investors of NNPC’s support, saying: “We are here to support you, we are not in competition. We are here to make sure that you succeed so that our country will succeed and prosper into what we visualise and contribute globally to energy sale”.

Also speaking at the event, the Executive Secretary, Nigerian Content Development Monitoring Board, Mr Simbi Wabote, commended the project partners for their various activities in Nigeria which he said were in alignment with NCDMB’s strategic objective of maximising the potentials in the Midstream and Downstream Sectors of the Nigerian oil and gas industry to actualise the Decade of Gas policy of the Federal Government.

“I am delighted that this project will bring invaluable local content opportunities in technology and innovation, human capital development as well as research and development,” he said.

The event was attended by the Chairman of the Board of Directors, NNPC Ltd., Mrs Margery Chuba-Okadigbo and representatives of Hyundai, NSML and Temile Development Company.

Also in the week, Sonangol Group, the national oil company of Angola, Africa’s second largest oil producer, expressed desire to collaborate with NNPC Ltd. in the downstream sector reforms in Angola.

This was disclosed by a delegation from Sonangol on a benchmarking visit to the NNPC to understudy the company’s downstream operations and lay the foundation for new partnerships.

Speaking at a brief welcome ceremony held for the delegation at the NNPC Towers, Abuja, the head of the delegation and member of Sonangol’s Executive Committee in charge of Distributions, Ana Paula Marranjal Mesquita Do Carmo, said that the Delegates were in Nigeria to understudy NNPC’s downstream logistics and mechanisms of sales and distribution of petroleum products.

According to her, Angola was already transiting from a monopolistic market to a competitive market and Sonangol needed to learn from an established and functional system like NNPC.

Speaking earlier, the GMD/CEO of NNPC Ltd. who was represented by the Chief Financial Officer, Mr Umar Ajiya, welcomed the guests as partners, adding that NNPC was committed to working with African companies to add value to their hydrocarbon value chain and create energy security for the continent.

He assured them that NNPC would share its experience with the group, stressing that the visit was timely as NNPC was currently transiting to a limited liability company with its business processes changing to become more commercially focused and efficient.

In a presentation to the delegation, the Group Executive Director, Downstream, who was represented by the Managing Director, PPMC, Mr Isiyaku Abdullahi took them through the gamut of NNPC’s downstream operations with special focus on NNPC Retail and its business model.

He assured them that NNPC was willing to answer all their questions and avail them of any information relating to downstream operations.

The Sonangol team was taken on a tour of a number of NNPC’s downstream facilities in Abuja, Lagos and Ogun State.

In another development, Federal Government called for synergy among stakeholders in the midstream and downstream sectors of the oil and gas industry.

The Minister of State Petroleum Resources, Chief Timipre Sylva, made the call at the opening ceremony of a two-day dialogue organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Lagos with theme: “Maximising Potential in the Midstream and Downstream Oil and Gas sector – a Local Content Perspective”.

According to the Minister, one of the key objectives of the Ministry of Petroleum Resources under the Next Level Agenda of the President Muhammadu Buhari administration is to increase the nation’s domestic refinery capacity.

Sylva noted that synergy in the Midstream and Downstream oil and gas sector would further strengthen local content development and boost the country’s domestic refining capacity.

He noted that government’s effort at boosting domestic refining capacity led to NCDMB’s partnership with local companies such as Waltersmith Refinery, Azikel Refinery, and Atlantic Refinery in furtherance of its role as a catalyst for capacity development in the Nigerian oil and gas industry and its linkage sectors.

Sylva said the dialogue “would serve as a platform to sensitise and enlighten stakeholders about the Board’s capacity building intervention initiatives in support of Nigerian Content Development in the midstream and downstream sectors.”