Energy

NNPC Ltd signs new PSC agreement, launches crude oil theft reporting app

Published

2 years ago

August 15, 2022

…To save Nigeria about $9bn potential contingent liability

By Gloria Akudoro, Abuja

As the dividends of PIA continue to linger, the Nigerian National Petroleum Company Limited (NNPCL) on Friday amicably renewed the signing of the fully termed agreement for the negotiated Production Sharing Contract (PSC) Agreement with five oil partners in order to shrug off uncertain and attract more investment in the sector.

Signing the PSC Agreement with several oil majors which took place at the NNPC Tower in Abuja, the Group Chief Executive Officer, NNPC Limited, Mallam Mele Kyari, maintained that the deal will aid save Nigeria and the Company about $9bn contingents liability.

At the signing ceremony, the NNPC Limited and its Production Sharing Contractors renewed agreement in five (5) Oil Mining Lease (OML): OML 128 situated at the central part of the Niger Delta, contained in Agbami-Ekoli field; OML 130 situated in the deepwater Niger Delta, contained the Akpo and Egina field; OML 132 is situated at the Western Niger Delta, contained Apart field; OML 133 contained the Erha, Erha North and BosI field and deepwater OML138 contained Usan field. A development expected to unlock over $500bn in revenue for the country.

Kyari who described the deal to be a major landmark achievement since it transited to a limited liability company under the Company and Allied Matters Act (CAMA) hinted that the execution of fully termed agreements for the renegotiated PSCs will ultimately accelerate inflow of direct foreign investment, expanded access to affordable energy, job creation and socio-economic development.

“The signing of the new PSCs is a key milestone achievement by NNPC Ltd which would ultimately unlock opportunities within the Nigeria Upstream sector.

“The execution of the PSCs will deepen investment and development of Nigeria’s rich petroleum resources and ensure that the trifold mandate of the NNPC Ltd to ensure energy availability, sustainability, and accessibility is achieved,” said NNPC GCEO.

Although, he attributed the conflicts to the 1993 PSC Agreement which over the years yielded major issues that led to arbitrations and all forms of litigations thereby destroying it relationship with partners and causing set-back to the nation.

It will be recalled that in Nigeria the Production Sharing Contracts commenced with the 1993 PSCs, subsequently followed by 2000, 2004, 2005, 2007, 2010 to date. The PSC in Nigeria was mainly motivated by funding challenges faced by the joint venture arrangements that led to reduction in production and revenue.

Kyari further stressed that the execution of PSC Agreement today wouldn’t have been a reality without the leadership role of Muhammad Buhari’s administration that agreed to smoothly resolve amicably this conflicts that has lingered in a manner it becomes a win-win situation through the provision contained in Petroleum Industry Act (PIA).

He said the PIA in Section 311(2) stipulates that new PSC agreements under new Heads of Terms will be signed between NNPC Ltd as Concessionaire and her Contractor Parties within one year of signing the PIA into law, giving a deadline of 15th August 2022.

“This provision paved the way for the resolution of lingering disputes which created investment uncertainty and stifled new investments in the nation’s deep offshore assets. To achieve this, NNPC Ltd leveraged on the near end term of the PSCs and the parties’ interest to renew the PSCs as a negotiation currency in bringing the contractors to work towards trading the past for the future.

He also said that the renewed PSCs would impact greatly in improving long-term relationships with contractors, elimination of contractual ambiguities especially in relation to gas terms, enable early contract renewal amongst others to move the nation forward.

Speaking, the GGM, National Petroleum Investment Management Services (NAPIMS), Bala Wunti, stated since the introduction of PSC into Nigeria’s hydrocarbon production algorithm, over 5.9billion barrel of oil equivalent has so far been produced and monetized by the various PSCs arrangements.

He added that in the last two decades, the PSCs have commutatively accounted for about 40% of Nigeria’s oil production.

Wunti, disclosed that NAPIMS as the Asset Manager of all the producing PSCs in Nigeria, has played pivotal roles in the renegotiation of major PSCs assets under our supervision including OMLs 119, 125, 128, 130 ,132, 133 and OML 138 under the leadership of the NNPC GCEO and GED Downstream.

NAPIMS GGM also noted anticipation of this history signing of the PSC NAPIMS had been actively working in collaboration with PSC Contractors to emplace essential Final Investment Decision parameters for major Deepwater projects including Chevron operated AGBAMI Gas Projects, OWOWO and BOSI development by ExxonMobil, SNEPCO’s BONGA North and BONGA Southwest Aparo, BOLIA-CHOTA, the PREOWEI Project being operated by TotalEnergies.

Also speaking at the event, the Chairman/Managing Director of ExxonMobil Companies in Nigeria, Mr. Richard Laing noted that the renewal of the Usan and Erha leases validates the company’s commitment to maintain a significant deepwater presence in Nigeria, via Esso Exploration and Production Nigeria (Deepwater) Limited.

“This signing enables ExxonMobil and its partners to unlock the potential value in these leases and to bring forward additional investment,” Mr. Laing stated.

Meanwhile, the NNPC Board Chairman, Senator Margery Chuba-Okadigbo, has thanked the captains of industry and all who jointly worked towards the successful execution of the PSC Agreement.

The Executive Chairman, Federal Inland Revenue Services, Muhammad Namu, said it’s the duty of the service to bare witness to agreement and to ensure that transparency leads.

Another milestone achieved by the NNPC Limited under the administration of Mr President is the launching of Nigerian Crude Oil Theft Incidence Reporting App which is already in the cloud to monitor activities of oil theft in the Niger Delta.

The Company also released a website link and contact hotlines to enable direct reporting of any oil theft activity and individual with valid information will be rewarded handsomely.

Energy

KEDCO, iRecharge partner to block electricity payment leakages

Published

2 hours ago

May 7, 2024

NewsDirect

The management of Kano Electricity Distribution Company (KEDCO) on Tuesday entered into partnership with iRecharge Technology to block bills payment leakages and ease payment of electricity bills.

The iRecharge payment product was launched in Kano.

The Managing Director of KEDCO, Malam Abubakar Yusuf, expressed delight over the partnership, urging customers to embrace the initiative.

He described the iRecharge payment platform as a positive milestone deployed to allow customers pay their bills with convenience.

According to him, the initiative marks the beginning of a new era for KEDCO, as it embarks on the strategic partnership with iRecharge Tech.

“Today, KEDCO is adding a new dimension to its digital solutions by embarking on a promising and exciting journey that will ultimately reposition our company’s revenue drive.

“It will also support our efforts towards the reduction of commercial and collection losses.

“Our collaboration with iRecharge Technology signifies our commitment to leveraging technology for enhanced service delivery, plugging revenue leakages, and ultimately providing better payment solutions’’ he said.

He was hopeful that the partnership would not only streamline the company’s operation and improve collections but also enhance customer satisfaction.

“The solution is not only convenient but also cost-free and effortless for our esteemed customers. Either through bank transfers, the use of USSD, or other user-friendly options, no matter your preferences, you are covered.

“Therefore, we are optimistic that in weeks to come this payment solution will begin to yield the desired objectives.

” I solicit the support and commitment of all the stakeholders towards achieving the laudable objectives of this important partnership with iRecharge”, he said.

Demonstrating the payment solution, the Chief Growth Officer of iRecharge Technology, Abubakar Mohammed, explained that the iRecharge payment platform is the easiest and smartest way to pay electricity bills.

According to him, Utility Loans allow customers who open payment account with iRecharge to receive loans, pay their bills promptly and enjoy power supply without hitches.

He said payments could be made through many platforms, including e-payment, whatsAPP platform with 09096666612, www.irecharge.ng, *6606*1#, among others.

Energy

Enugu Electricity Distribution Company implements tariff reduction for Band A customers in South-East region

Published

7 hours ago

May 7, 2024

Praise Oguntan

The Enugu Electricity Distribution Company (EEDC) has announced a reduction in electricity tariffs for customers in the Band A feeders across the South-East region.

This decision follows the directive issued by the National Electricity Regulatory Commission (NERC), instructing all 11 Discos to adjust their tariffs to N206.80/kWh instead of the previous rate of N225/kWh for customers in Band A feeders.

The announcement was made in a statement released by Mr. Emeka Ezeh, the spokesperson for EEDC, in Enugu on Monday.

The statement reads: “We wish to inform our valued customers that the end-user tariff for our Band A feeders has been revised downwards from N225/kWh to N206.80/kWh under MYTO 2024, effective from May 6, 2024.

“We assure our customers that the daily minimum 20-hour supply will continue uninterrupted. Please note that the end-user tariffs for Bands B, C, D, and E feeders remain unchanged.”

Energy

Oil firms lose N341bn to gas flaring in 12 weeks

Published

11 hours ago

May 7, 2024

NewsDirect

Nigeria reportedly lost N340.87 billion to gas flaring in the first quarter of 2024, as oil and gas firms operating in the country’s oil and gas sector flared 83.9 billion standard cubic feet (BSCF) of gas in three months (January and March 2024), according to latest data released by the National Oil Spill Detection and Response Agency (NOSDRA).

In its report for the period, NOSDRA noted that the amount lost to gas flaring was 10 percent higher than the $266.9 million, about N309.871 billion, lost in 2023.

According to the environmental watchdog, the volume of gas flared in the first quarter of 2024 emitted 4.5 million tonnes of carbon dioxide into the atmosphere and was capable of generating 8,400 gigawatts hour of electricity, while the offending companies were liable for the payment of fines totalling $167.7 million, an equivalent of N194.699 billion.

In comparison, NOSDRA noted that between January and March 2023, the oil firms flared 76.3 billion SCF of gas, which was valued at $266.9 million (N309.871 billion); was capable of generating 7,600 gigawatts-hour (GwH)of electricity; contributed 4.1 million tonnes of carbon dioxide emission, with the firms liable for penalties of $152.5 million, an equivalent of N177.053 billion.

This was even as power generation is expected to increase by 500 megawatts (MW) in the second quarter of 2024, driven by new power plants and rehabilitated facilities.

Specifically, thermal power generation is expected to remain dominant, but renewable energy sources like solar and wind are expected to gain traction; while transmission and distribution constraints are expected to persist, affecting power availability and reliability.

Furthermore, giving a breakdown of gas flared by production segment, the environmental regulatory agency stated that oil and gas firms operating in the country’s onshore oil space flared 42.5 billion SCF of gas in the first three months of 2024, accounting for 50.72 percent of total gas flared.

NOSDRA added that the gas flared onshore was valued at $148.9 million, about N172.873 billion, with penalties payable of $85.1 million, an equivalent of N98.8 billion; while it contributed 2.3 million tonnes of carbon dioxide to the atmosphere and had the potential to generate 4,300 GwH of electricity.

In the same period in 2023, companies operating onshore, caused the country a loss of $130 million (N150.93 billion), from the flaring of 37.1 billion SCF of gas, which has power generating potential of 3,700 GwH and contributed two million tonnes of carbon dioxide emissions, while penalties payable by the companies stood at $74.3 million (N86.262 billion).

On the other hand, companies operating offshore flared gas valued at $144.7 million, accounting for 49.28 per cent of total gas flared in the first three months of 2024.

Specifically, the companies flared 41.3 billion SCF of gas; 5.63 percent higher than the 39.1 billion SCF flared in the same period in 2023; while the quantity flared elicited penalties of $82.7 million, carbon dioxide emission of 2.2 million tonnes and had power generation potential of 4,100 GwH.

Comparatively, in the same period in 2023, offshore companies flared 39.1 billion SCF of gas valued at $136.9 million, with power generation potential of 3,900; carbon dioxide emission of 2.1 million tonnes and penalties payable of $78.2 million.

Some of the offending companies, according to NOSDRA include Shell Petroleum, Development Company (SPDC), Nigerian Petroleum Development Company (NPDC), Chevron Nigeria, Mobil Oil, Elf Petroleum Nigeria, Nigeria Agip Oil Company (NAOC), Addax Petroleum, Texaco Overseas (Nigeria), Esso Exploration and Production Nigeria, Allied Energy Resources, Ultramar Petroleum, Atlas Petroleum; Cromwell and South Atlantic Petroleum, among others.

These companies flared gas from Oil Mining Leases (OML) 04, 05, 11, 13, 14, 17, 18, 22, 28, 23, 24, 38, 40, 42, 43, 72, 49, 54, 90, 95, 67, 70, 104, 59, 99, 100, 101, 102 and Oil Prospecting Licences 222, 3.