NNPC Remits N1.7tn to FAAC in One Year

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  • Seven persons die in oil platform explosion

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Nigerian National Petroleum Corporation (NNPC) paid about N1.7 trillion to the Federation Account Allocation Committee (FAAC), between February 2019 and February 2020, the national oil company has said.

Figures from its full monthly financial report revealed that the NNPC also remitted N148.53 billion to FAAC in February 2020.
In dollar terms, the NNPC noted that it recorded a total export of $370.69 million in February, a decrease of 14.75 per cent compared to the previous month.

It added that crude oil export sales contributed $281.14 million (75.84 per cent) of the dollar transactions compared with $336.65 million contribution in the previous month; while the export gas sales amounted to $89.55 million in the month.
“In February 2020, NNPC remitted the sum of N148.53 billion to the Federation Account Allocation Committee (FAAC). From February 2019 to February 2020, total NNPC remittances to FAAC is N1.706 trillion; out of which federation and JV received the sum of N763.35 billion and N942.80 billion respectively.

“A total export sale of $370.69 million was recorded in February 2020; decreasing by 14.75 per cent compared to last month. Crude oil export sales contributed $281.14 million (75.84 per cent) of the dollar transactions compared with $336.65 million contribution in the previous month; while the export gas sales amounted to $89.55 million in the month.

“February 2019 to February 2020 crude oil and gas transactions indicated that crude oil & gas worth $5.19 billion was exported”, the report said.

The NNPC put total export receipt at $282.32 million for February 2020 as against $626.80 million in January 2019, stating that contribution from crude oil amounted to $171.24 million while gas and miscellaneous receipts stood at $85.65 million and $25.43 million respectively.

“Of the export receipts, $161.39 million was remitted to the Federation Account while $120.93 million was remitted to fund the JV cost recovery for the month of February 2020 to guarantee current and future production.

“Total export crude oil and gas receipt for the period of February 2019 to February 2020 stood at $5.38 billion. Out of which the sum of $3.70 billion was transferred to JV Cash Call as first line charge”, it stated.

According to the corporation, global oil demand growth in 2019 as revealed in the OPEC MOMR, decreased by 0.08 mb/d compared to last January’s assessment; to grow at 0.83 mb/d and reach 99.67 mb/d.

For the month under review, it said the OPEC crude oil production declined by 546 tb/d month-on-month to average 27.77 mb/d, while globally, oil supply in the month decreased by 0.29 mb/d m-o-m to average 99.75 mb/d, but increased by 0.78 mb/d year-on-year.

For the oil sector, it stated that real growth stood at 6.36 per cent (year-on-year) in Q4 2019, indicating 7.98 per cent points increase in comparison to the equivalent quarter of 2018.

The corporation said that in January 2020, total crude oil production in Nigeria increased by 3.46 mb or 5.69 per cent at 64.26 mb with daily average of 2.07 mb/d.

However, it added that “production was disrupted by the shutdown of the TFP at Forcados for repairs while Bonny NCTL was shut down due to leaks on ROW near Boro / Awoba axis.

“Production was also interrupted at Bonga, Egina, Brass, Erha, Usan, Amenam, Ogo Ocha and Ima terminals due to lube oil loss, pump issues, loss of power, riser protector replacement, pipeline repairs, and flare management.”

It stated that the release of the report was in line with the corporation’s commitment to becoming more accountable, responsive, transparent and a fact-based organisation.

Seven Persons Die in Oil Platform Explosion

Seven persons have been reported dead in an explosion that occurred at the Gbetiokun oil field in Oil Mining Lease (OML) 40, operated by the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

This is coming as the federal government is working on the establishment of an agency to be known as National Acreage Management Strategy (NAMSTRA) to take charge of oil bid rounds before the end of this year.

Located largely in Delta side of Benin River between Delta and Edo States, the field belongs to the NPDC/Elcrest Joint Venture.
NNPC, which confirmed the fatal incident that occurred on Tuesday, stated that other persons affected by the incident had been accounted for.

The corporation added that the accident happened during the installation of the ladder on a platform (Benin River Valve Station) for access during discharging of Gbetiokun production.

A statement by the NNPC’s Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, stated that detailed investigation of the cause of the explosion had commenced.

It said the Department of Petroleum Resources (DPR) had been duly notified and Form 41 was being prepared for the industry regulator as required in circumstances of that nature.

“The bodies of casualties have been deposited in a morgue in Sapele, while families of the personnel involved are being contacted by their employers: Weld Affairs and Flow Impact, which are consultants to NPDC,” the NNPC said.

The statement added that all personnel onboard the platform had been fully accounted for, adding that the Group Managing Director of NNPC, Mr. Mele Kyari, commiserated with the families of the bereaved.

FG to Establish Agency for Oil Bid Rounds

The federal government is working on the establishment of an agency to be known as NAMSTRA before the end of this year.
NAMSTRA will be saddled with the responsibility of putting in place strategies to determine the nation’s periodic bid rounds in the oil and gas industry.

The Director of the DPR, Mr. Sarki Auwalu, said yesterday at a webinar that establishing such an agency had become necessary given that the last bid round was about 17 years ago.

The webinar was organised by the Nigerian Association of Petroleum Explorationists (NAPE), with the theme: “Nigeria Marginal Field Bid Round: Implications, Challenges and Opportunities”.

Auwalu added that for the nation’s oil industry to remain competitive within the sub-Saharan region, there was a need to determine Nigeria’s potential oil basins and when to call for bid rounds.

According to him, with the nation’s available seven basins comprising the Benue (North-central), Sokoto (North-west border), Chad (North-east), Bida (Central, along the Niger valley), Dahomey (South- west), Anambra (South-east) Basins and the Niger Delta (South coastal), including the deep water, the establishment of NAMSTRA would help the country to decide the next bid round after assessing the commercial viability of these basins.

“NAMSTRA will also help to determine how prolific such basins will be in a bid round process,” he stated.
On the interest of investors in the current bid round, he added that no fewer than 10 companies had sought for each of the marginal field put out for bid this year.

He reiterated that about 600 companies have applied for pre-qualification in the bidding for the 57 oil fields.
Auwalu said: “First I will say that we have really witnessed an increase in bidders after the extension of the deadline to June 21. There has been almost 30 per cent increase in participation.

“If you are making a bid or auctioning any oil field, you need to get 10 people per field really going after the field. We have 57 fields and we have over 600 companies. So, we can say that we are celebrating success so far.
“After the extension, we are moving according to schedule and now we are in the phase where we do pre-qualification for the bidders to apply. Everything is going perfectly.”

However, the DPR director said oil and gas companies that have become successful in the 2020 marginal fields bid rounds had just two years to deliver their first oil.

According to him, the federal government expects bidders to already have both funding and technicalities already prepared for production and should launch into exploration immediately upon winning, adding that the bidding would be held electronically.
Auwalu explained that the federal government is poised to give support to the winners in terms of providing advisory roles to them on how to go about meeting the target.

“There is no magic to developing fields. Already, we have 16 marginal field operators producing in the country, and we have seen how they went about it. So, the government is prepared to help winners succeed by giving them aggressive work implementation tactics,” he said.

He added that before opening up this year’s bid rounds in June, the department had embarked on various studies to help investors become successful.

“We have seen how other marginal oil and gas firms became successful and as long as funding and other things are on the ground, it is possible to achieve first oil in two years,” he added.