Heineken Lokpobiri, minister of state for petroleum resources (oil), says Nigeria will conform with the production quota set by the Organisation of Petroleum Exporting Countries (OPEC).

On June 2, OPEC extended Nigeria’s production quota of 1.5 million barrels of crude per day (bpd) to 2025.

OPEC said Nigeria should maintain the production level till December 31, 2025.

The oil cartel increased Nigeria’s production level to 1.5 million bpd for 2024 at its ministerial meeting on November 30, 2023.

However, Nigeria has been producing below the quota.

Speaking after OPEC’s 56th joint ministerial monitoring committee (JMMC) on October 2, the minister said Nigeria remains fully committed to the objectives of the body’s declaration of cooperation (DoC).

“Nigeria remains fully committed to the objectives of the DoC, and I can confidently confirm that our country is in conformity with the agreed production limits,” he said.

“While we continue to ramp up production in line with our national interests, we are doing so within the framework of OPEC’s guidelines, as we remain committed to balancing responsible production with our economic goals, and continue to meet our obligations under the DoC.”

OPEC RETAINS PRODUCTION OUTPUT POLICY

At the meeting, the oil cartel and its allies, known as OPEC+, retained its oil output policy, including a plan to start raising output in December.

According to a statement by OPEC, the group reviewed the crude oil production data for the months of July and August 2024 as well as current market conditions.

“During the meeting, the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation confirmed that they had achieved full conformity and compensation according to the schedules submitted for September,” the oil cartel said.

OPEC said the three countries reiterated their resolve to maintain full conformity and compensation throughout the remaining period of the agreement.

Final estimates of September’s crude oil production levels, according to the oil cartel, would be based on authorised secondary sources that would be accessible by the second week of October.

The oil alliance added that it will provide production figures for the nations that are part of the declaration of cooperation (DoC).

“The committee noted the three separate technical workshops between representatives from the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation and the secondary sources,” OPEC said.

“The meeting was aimed at discussing September production details and submitting their revised compensation plans that include the August overproduction as per the submitted plans to the OPEC Secretariat while also emphasising the need for some members to make further cuts to compensate for overproduction.

“The JMMC emphasised the critical importance of achieving full conformity and compensation. It will continue to monitor adherence to the production adjustments agreed upon at the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) held on 2 June 2024.

“The Committee will also continue to monitor the additional voluntary production adjustments announced by some participating OPEC and non OPEC countries as agreed upon in the 52nd JMMC held on 1 February 2024.”

Furthermore, according to OPEC, the committee would continuously assess market conditions.

OPEC said the next meeting of the JMMC is scheduled for December 1, 2024.

Petroleum marketers have raised an alarm that the Nigerian National Petroleum Company Limited, NNPCL, portal used for the purchase of Premium Motor Spirit (Petrol) has been shut down against dealers, making it impossible to apply for the commodity.

The spokesperson of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike disclosed this in a statement on Wednesday.

According to him, marketers have more than 2,000 pending tickets for the purchasing of 45,000 liters of petrol.

He hinted that the situation may lead to another round of fuel scarcity nationwide.

“I can’t confirm the price now because the portal is still shut down.

“We have more than 2,000 tickets for 45,000 liters (of petrol). That is 45,000 multiplied by 2,000, you can now know the number of million liters it will be. This is just an estimate, you know I don’t work with NNPCL and I don’t know what is on their system,” Ukadike stated.

He added that a 45,000-litre truckload of PMS is around N39.5 million, making N79 billion when multiplied by 2,000.

Reacting to the development, the spokesperson of NNPCL, Olufemi Soneye admitted that the state-owned firm has a significant backlog to address.

He said that the portal closure was intended to prevent the company from holding marketers’ funds for an extended period.

Soneye assured that the portal would soon be reopened; however, he failed to state the date when it would happen.

“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.

“It will be reopened once the backlog has been sufficiently reduced. We are working to address it as soon as possible,” he stated.

The development comes as Nigerians struggle with high energy costs.

Recall that NNPCL in September 2024 announced a fresh price increase for petrol nationwide after lifting the product from Dangote Refinery.

Nigerians currently buy petrol between N950 and N1,100 per liter nationwide.

The import of Automotive Gas Oil (Diesel) into Nigeria increased by 22.66 percent to 4.94 billion liters in 2023 from 4 billion liters in 2022.

The National Bureau of Statistics disclosed this in its latest Petroleum Products Distribution Data released recently.

The data also showed that 109.39 million liters of Diesel were locally produced in 2023, compared to 102.47 million liters reported in 2022.

This represents a 6.76 percent growth rate in locally produced diesel in Nigeria.

Comparatively, Nigeria heavily depends on the import of diesel to meet its consumption demand based on the NBS data for 2023.

On the other hand, the Data also showed that the import of Premium Motor Spirit (petrol) dropped 13.77 percent to 20.30 billion liters in 2023 compared to 23.54 billion liters in 2022.

Recall that in April 2024, Dangote Refinery commenced the domestic sale of diesel in Nigeria.

The Nigerian National Petroleum Company (NNPC) is prioritising supplying naira-denominated crude oil to the Dangote Refinery in the first phase of a naira-for-crude scheme, a development expected to positively impact the domestic fuel supply chain and enhance transparency.

Oil transactions in Nigeria are often conducted in US dollars, given the international nature of the oil market and the global reliance on the dollar for such trade.

However, the Federal Executive Council recently adopted a proposal by President Bola Tinubu to sell crude to Dangote refinery and other upcoming refineries in naira.

The federal cabinet approved that the 450,000 barrels meant for domestic consumption be offered in naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction.

Eche Idoko, publicity secretary of CORAN said the federal government had promised to only supply crude oil to the Dangote refinery as it was the “only refinery producing petrol”.

“We were present at the inaugural meeting where the federal government did make us understand that they would want to start the naira sales in phases. That they would start with refineries that are producing PMS first and extend it to other refineries and that’s where they are right now and we can say the first phase of the naira sales will start in October,” Idoko said.

“No other refinery (apart from Dangote refinery) is selling petrol at the moment but I know that there are other refineries working on their plants that would be producing petroleum like the Clairgold refinery which intends to produce PMS.

“There is also Aradel which is working on their PMS plant. There is also Azikel Petroleum Refineries, which is also working on producing PMS.

“The last I heard with respect to that arrangement, the October date still remains and we have spoken with people at Dangote and they said conversations are ongoing.”

However, he said the details of the transactions would be made known when the federal government makes the announcement.

“For instance, are they going to discounts as in the normal practice when you are selling crude to the international traders? If there is going to be a discount, that is what will guarantee the reduction in price of petroleum products,” Idoko said.

“We also want to know at what rate is the exchange rate pegged. Is the federal government intending to maintain the N1,600 exchange rate?”

He said Nigerians would know the potential price of petroleum products when all the details are unveiled.

On September 13, 2024, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency announced that the Federal Executive Council under the leadership of President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.

“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.

The chairman of the Technical Sub-Committee is Zacch Adedeji, who doubles as chairman of the Federal Inland Revenue Service.

Dare Adekanmbi, the special adviser on media to the FIRS Chairman told Journalists that the committee is working day and night to ensure that things go according to plans.

The panel explained in September that this initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.

“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” Adedeji had stated.

While stating that crude would be sold to Dangote in naira from October 1, the committee chairman and FIRS boss said, “In return, the Dangote refinery will supply PMS (petrol) and diesel of equivalent value to the domestic market to be paid in naira.

“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”

Adedeji explained that the technical committee that worked to flesh out the initiative would transition to an implementation execution and monitoring committee working out of Lagos for the next three to six months.

The committee, which includes Lydia Jafiya; the permanent secretary of the Federal Ministry of Finance; the FIRS boss, as well as representatives from NNPC, Central Bank of Nigeria, AfreximBank, and the Nigerian Upstream Petroleum Regulatory Commission, was set up to craft a robust template that will ensure the successful implementation of the initiative.

THE Nigeria Extractive Industries Transparency Initiative (NEITI), says outstanding collectible revenues due to the Federal Government in the oil and gas industry have risen to 6.071 billion dollars and N66.4 billion as at June 2024, respectively.

According to the News Agency of Nigeria (NAN), NEM disclosed this on Thursday in Abuja at the public presentation of its 2022 and 2023 Independent Oil and Gas Industry Reports.

The News Agency of Nigeria (NAN) reports that the report is being prefered by the NEITI Board and the National Stakeholders Working Group (NSWG).

The report was unveiled by Mr Ola Olukoyede, Chair-man, Economic and Financial Crimes Commission (EFCC), alongside Senator George Akume, Secretary to the Government of the Federation and Chairman, NSWG, NEITI and other dignitaries.

He promise to address the findings that the industry owed the government $6 billion and N66 billion.

He disclosed that he has authorised the transfer of over #1 billion of funds recovered funds through previous NEITI audits, into the Federation Account.

“Over the years, as an anti-corruption agency in the country, we are part of the success of the work of NEITI.

Where the work stops at the level of presenting this report, then we take off from there to ensure that the recommendations therein and revelations therein particularly as relates to criminal infractions, and violation of our financial laws, it is taken up seriously.

“I am also happy to announce to you that as of yesterday (Wednesday), I still approved that over a billion so remitted to the Federal Government account as a result of the work of the last report of NEITI.

“Since then we have been making recoveries. We have cases in court we are prosecuting and with this report 2022 and 2023. We are also going to do everything within our power, deploying all our resources to ensure we implement the recommendations therein,” EFCC boss he said.

The breakdown of the report showed that outstanding liabilities were 6.049 billion dollars and N65.9 billion in unpaid royalties and gas flare penalties, due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as collectible revenues by Aug. 31, 2024.

It also provided a detailed analysis of the information and data regarding who owes what in outstanding revenues due to the government.

A further breakdown showed outstanding petroleum profit taxes, company income taxes, withholding taxes, and Value Added Tax (VAT), due to the Federal Inland Revenue Service (FIRS), amounting to 21.926 million dollars and N492.8 million as of June 2024.

On fuel importation, the latest NEITI report disclosed that a total of 23.54 billion litres of Premium Motor Spirit (PMS) were imported into the country in 2022, while 20.28 billion litres were imported in 2023.

This represented a reduction of 3.25 billion litres, or a 14 per cent decline, following the removal of the fuel sub-sidy.

A detailed 10-year trend analysis (2014-2023) in the NEITI report showed that the highest annual PMS importation into the country, 23.54 billion litres, was recorded in 2022, while the lowest, 16.88 billion litres recorded in 2017.

The NEITI report also disclosed that a total of N15.87 trillion was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714 trillion, recorded in 2022.

On crude production, fiscalised crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11 per cent decline.

However, in 2023, NEIT’s independent report revealed total fiscalised production of 537.571 million barrels, and 46.626 million-barrel or 9.5 per cent increase from total production recorded in 2022.

A 10-year trend (2014-2023) of fiscalised crude oil production in Nigeria showed the highest production volume of 798.542 million barrels was recorded in 2014, while the lowest, 490.945 million barrels, was recorded in 2022.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has advised the Federal Government to increase its stake in Dangote Refinery to 45 per cent from the current seven per cent.

Its President, Mr Festus Osifo, made the call yesterday while presenting a communique and recommendations from the third edition of the “PENGASSAN Energy and Labour Summit” in Lagos to newsmen.

This, PENGASSAN said, is in order to foster product availability to meet local demand and ensure energy assurance and security for the citizens.

The union said the refineries should be modeled after the Nigerian Liquefied Natural Gas (NLNG), which appears to have been successful.

He said: “Ramping up efforts to make the Nation’s four refineries work; once operational, the government should divest majority shareholdings.

“And own at most 49per cent of the shareholding in the four refineries. Core investors will be brought in to take the 51per cent as applicable in NLNG.”

Bemoaning a situation whereby the inter land petroleum depots in six geopolitical zones of the country are dilapidated, Osifo stressed the need for the government to get the depots fixed in collaboration with the private sector so as to ensure smooth distribution of petroleum products and enhance the national strategic reserve.

PENGASSAN also called for the expansion of pipelines that could be used in the delivery of refined petroleum products across the length and breadth of the country as this would reduce the pressure put on the roads by trucks carrying the products.

The group also recommended digital intervention to curtail crude oil theft; reengineer security architecture; and ensure ease of doing business, by reducing bureaucracies or complex regulations that make the gas investment unattractive to investors, among others.

Osifo said those caught for crude oil theft should be punished severely by competent courts of jurisdiction to serve as a deterrent to others.

He said participants were worried that three years after the passage of the PIA the section of the act had not been implemented at all.

The act stipulated that three per cent of the operational revenue of the oil companies should be contributed to the host community fund.

He enjoined the government to also create a business friendly environment by creating incentives for more investors to tap into the nation’s abundant gas resources.

In the upstream, it suggested an amendment of the PIA to include the divestment framework, noting that the previous divestments are not yielding results as the companies lack financial capacity to sustain and expand the divested oil wells.

The group also enjoined the Nigerian energy sector to leverage Artificial Intelligence (AI) advancement to improve productivity and sustainability, tackle oil theft and smuggling.