Oando Plc Favour Ifeoluwa & Akinola Ajibade Oando Plc says it has completed and won the bid for the operatorship of oil block KON 13 in Angola. The firm which recently acquired Eni of Italy’s oil assets in Nigeria, said that the award of the oil block located in Angola’s onshore Kwanza Basin followed a competitive bidding process by the country’s oil and gas sector regulator. It further said hat the asset in which it owns 45 per cent participating interest, has estimated prospective resources of 770 to 1,100 million barrels of oil. Oando is handling its operations relating to the asset through its upstream subsidiary, Oando Energy Resources (OER). “Oando Plc, Africa’s leading indigenous energy solutions provider listed on both the Nigerian Exchange Limited and Johannesburg Stock Exchange is pleased to announce that its upstream subsidiary, Oando Energy Resources (OER), has been awarded operatorship of Block KON 13 in Angola’s Onshore Kwanza Basin, following a...
By Favour & Akinola Ajibade
The Federal Government's decision to remove fuel subsidy has saved the Nigerian National Petroleum Company, NNPC Limited from bankruptcy, the Chief Executive officer, NNPC Limited,Mallam Mele Kyari has said.
The government had on May 29th 2023, announced the removal of subsidy, after several failed attempts.
Kyari said this during the opening ceremony of the PENGASSSN Energy and Labour Summit, tagged PEARLS 2023 in Abuja.
According to him,the law providing for subsidy effectively ended in 2022, adding that the extra budgetary provisions made to support subsidy till June this year was an initiative of the National Assembly.
NNPC, Kyari said, single handedly shoulder the burden of paying subsidy to extent that it was fast heading towards bankruptcy before President Tinubu intervened.
He added:”The law was very clear, that starting from the 17 of February, 2022 there can be no possibility of having subsidy on PMS. And that the market should determine the price, that the state should take every step possible to protect the consumers from the issues come with market price of petroleum products.
“But the last National Assembly in its wisdom made provision for subsidy to carter for subsidy from February 2022, to 2023 in the budget, not a single Kobo was paid into into NNPC for the purpose.
“And I can tell that since 2022 when that provision was made until the 29th of May, 2023, not a single Naira was paid to the NNPC Limited as cost of subsidy. That means we were carrying it entirely on the balance sheet of the NNPC”.
“The value of subsidy was seen exceeding N400 billion in a month, the NNPC Limited’s fiscal obligations could not cover subsidy, so we were heading towards what you could technically call the bankruptcy of the NNPC.
“By end of June 2023 we would have been in negative cash flow. NNPC would have been bankrupt if that decision was not taken by the President”.
According to him, even though there was absence of credible data for fuel consumption in the country, evacuation records are well known and the realities is that volume evacuation from the depots declined by 30 per cent as a result of the removal of fuel subsidy.
He noted that subsidy had done nothing but stiffles the growth of the downstream sector of the petroleum industry in the country.
“If there was one thing that stiffles growth of the downstream sector of the petroleum industry it is the existence of subsidy. That is the realities. As at today, there are close to 25 licenses to create refineries, build and operate refineries but nobody could take because as long as you do not have certainty around pricing and crude to pay for that differences no one can take.
“And as long as you have arbitrage, once there is a price differential between one location and another that is substantial, there is no way you can control fraud of all forms. It is impossible. And people will do everything possible to load products between locations. Whatever it is whether it is drugs or petroleum products. People will cut corners as long as market forces determine the price”.
He further disclosed works are underway to ensure that in 2024, Nigeria will become a net exporter of petroleum products.
Comrade Festus Osifo, PENGASSAN President,in his remarks noted that the theme of the (PEALS) 2023 summit: “Petroleum Downstream Deregulation and Gas Utilization for a Sustainable Energy Future in Nigeria” was carefully chosen given the multifaceted challenges and opportunities inherent in the nation’s energy sector vis a vis the global energy demand, to illuminate the path towards a sustainable energy future for Nigeria and by extension Nigerians.
According to Osifo, over the next three days, PENGASSAN will engage in enlightening discussions, sharing nsights, and formulating strategies to address critical issues such as divestment, PMS subsidy removal, and the place/role of the ever-ready Nigeria workers in the oil and gas industry and its concomitant value chains.
“We are witnessing a significant shift in the landscape of the energy sector in the country, marked by the divestment actions of companies such as Mobil Producing Nigeria, Nigeria Agip Company, SPDC, and others, which has impacted the presence of international oil and gas companies in Nigeria”.
The PENGASSAN President said the removal of subsidy and the current state of the nation’s refineries are of paramount importance which are touching the lives of every Nigerians.
1963900cookie-checkHow Fuel Subsidy Removal Saved NNPC From Bankruptcy-Kyari
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