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Newsletter Date N N P C G R O U P Energy in Brief
Moving forward, together
Mega Filling Stations Hotlines
Members of the public can provide useful
feedback and intelligence on operations of our
Mega and affiliate filling stations nationwide.
08057008021 08052195801 08100941174
February, 2016 Edition, Vol. 3
»
NNPC commences direct sale of crude for
refined petroleum products
In order to optimize high value return for Nigeria,
the previous off-shore crude oil exchange for prod-
uct arrangement by NNPC would be replaced with
the direct sales of crude and direct purchase of re-
fined petroleum products by NNPC with effect
from March, 2016.
The new arrangement when fully in place will cre-
ate opportunities for Nigerian businesses to partner
with NNPC in storage, marketing and distribution.
Nigeria is expected to save over 1 billion dollars in
revenue. While stressing the advantage of the new
arrangement, Minister of State for Petroleum Re-
sources and the GMD of NNPC, Dr Ibe Kachikwu
says transparency and accountability are key attrib-
utes of the new arrangement.
In January 2016, the Federal Government adopted a
price modulation approach to capture full value of
the fall in oil prices, the effect of which has result-
ed in appreciable revenue savings due to zero subsi-
dy claim for imported petroleum products.
The Federal Government had in 2015 spent 1.1 tril-
lion naira on fuel subsidy.
Content
Cover Page:
Page 2
Page 3
Page 4
NNPC DSDP
arrangement
Business Brief
Industry Watch
Sideline Stories
Twitter@NNPCgroup www.facebook.com/NNPCgroup
Newsletter Date N N P C G R O U P Energy in Brief
Moving forward, together
Mega Filling Stations Hotlines
Members of the public can provide useful
feedback and intelligence on operations of our
Mega and affiliate filling stations nationwide.
08057008021 08052195801 08100941174
February, 2016 Edition, Vol. 3
»
NNPC commences direct sale of crude for
refined petroleum products
In order to optimize high value return for Nigeria,
the previous off-shore crude oil exchange for prod-
uct arrangement by NNPC would be replaced with
the direct sales of crude and direct purchase of re-
fined petroleum products by NNPC with effect
from March, 2016.
The new arrangement when fully in place will cre-
ate opportunities for Nigerian businesses to partner
with NNPC in storage, marketing and distribution.
Nigeria is expected to save over 1 billion dollars in
revenue. While stressing the advantage of the new
arrangement, Minister of State for Petroleum Re-
sources and the GMD of NNPC, Dr Ibe Kachikwu
says transparency and accountability are key attrib-
utes of the new arrangement.
In January 2016, the Federal Government adopted a
price modulation approach to capture full value of
the fall in oil prices, the effect of which has result-
ed in appreciable revenue savings due to zero subsi-
dy claim for imported petroleum products.
The Federal Government had in 2015 spent 1.1 tril-
lion naira on fuel subsidy.
Content
Cover Page:
Page 2
Page 3
Page 4
NNPC DSDP
arrangement
Business Brief
Industry Watch
Sideline Stories
Twitter@NNPCgroup www.facebook.com/NNPCgroup
Brief
2015 NNPC Group Financial
Performance
FAAC Payments
update
Business
All figures are unaudited.
For more information on NNPC YTD performance,
Visit: http://nnpcgroup.com/NNPCBusiness/BusinessInformation/PerformanceData/MonthlyPerformanceData.aspx
2
A cumulative YTD deficit stands at ₦292 billion
₦1.095 Trillion
Equity Crude
& MF ORRI
Crude oil & Condensate Export for November, 2015 :Who gets what?
NNPC Equity
IOC Equity
IOC Shared Oil
IOC Carry Oil
IOC Equity
Balance of NNPC Equity
NNPC Equity
IOC Equity
Lifted by Partner
Lifted by NNPC
Lifted by NNPC
DPR
FIRS
Federation Account
Lifted by Partner
Lifted by NNPC for DPR, FIRS & Fed. Accounts with CBN
Alternative
Funding/MCA
Third Party
Financed
JV
Royalty Oil
Tax Oil
NNPC Profit Oil
PSC
65.49 million barrels of crude oil was lifted in November, 2015 by all parties: NNPC, Joint Venture
partners and Independent Operators…
Note: 61.09% of Y TD NNPC deficit is mainly accounted for by
claimable Pipeline repairs/management cost of ₦103.48Bn and Crude
& Product losses of ₦59.71Bn due to vandalized pipelines. Group Ex-
pense, Surplus/Deficits now included for NPDC Royalty.
Twitter@NNPCgroup www.facebook.com/NNPCgroup
Brief
2015 NNPC Group Financial
Performance
FAAC Payments
update
Business
All figures are unaudited.
For more information on NNPC YTD performance,
Visit: http://nnpcgroup.com/NNPCBusiness/BusinessInformation/PerformanceData/MonthlyPerformanceData.aspx
2
A cumulative YTD deficit stands at ₦292 billion
₦1.095 Trillion
Equity Crude
& MF ORRI
Crude oil & Condensate Export for November, 2015 :Who gets what?
NNPC Equity
IOC Equity
IOC Shared Oil
IOC Carry Oil
IOC Equity
Balance of NNPC Equity
NNPC Equity
IOC Equity
Lifted by Partner
Lifted by NNPC
Lifted by NNPC
DPR
FIRS
Federation Account
Lifted by Partner
Lifted by NNPC for DPR, FIRS & Fed. Accounts with CBN
Alternative
Funding/MCA
Third Party
Financed
JV
Royalty Oil
Tax Oil
NNPC Profit Oil
PSC
65.49 million barrels of crude oil was lifted in November, 2015 by all parties: NNPC, Joint Venture
partners and Independent Operators…
Note: 61.09% of Y TD NNPC deficit is mainly accounted for by
claimable Pipeline repairs/management cost of ₦103.48Bn and Crude
& Product losses of ₦59.71Bn due to vandalized pipelines. Group Ex-
pense, Surplus/Deficits now included for NPDC Royalty.
Twitter@NNPCgroup www.facebook.com/NNPCgroup
Business brief contd.
3
Business Intervention
Programmes
Organizational restructuring in-
tended to improve performance
will be anchored on four autono-
mous business units with a lean
CHQ.
Renegotiated OPA contract and
initiated crude direct sales and
direct purchase of petroleum
products for value addition.
Total value of 80.34 billion naira
was received as sales revenue for
petroleum products in the month
of December,2015 compared
with 66.96 billion naira received
in the month of November, 2015.
Ensures uninterrupted fuel supply
through improved product import
storage and distribution across
the country.
Key Achievements Key Challenges
Securing national crude oil and
products pipelines across the coun-
try remained a significant challenge
to NNPC operations. 2,832 vandal-
ized points recorded from January
to December, 2015, resulting in a
loss of 59.71billion naira of crude
and products value.
Pushing for reforms in the refineries
and implementation of new business
model is essential to attaining
greater refinery performance. Industry Watch
NNPC cost control key to
our reform-Kachikwu
An important element of the
NNPC reform programme under
the 20 Fixes Restructuring is on
cost reduction and maximization of
opportunities. To this end, and in
pursuit of this objective, NNPC
and its JV partner Chevron signed
an epoch project financing ar-
rangement that would significantly
impact on oil and gas project fi-
nancing especially in Africa and
the Middle East. The 1.2 billion
dollar multi-year drilling financing
would cover 23 onshore and 13
offshore wells on Oil Mining Leas-
es 49, 90, and 95 covering the year
2015-2018.
The objective of the alternative
project financing is to help miti-
gate production decline and en-
hance oil and gas production.
China’s imported oil increased to
over 60 percent last year amid
falling oil prices and steadily-
growing domestic energy de-
mand.
China imported 328 million tons
of oil, up 6.4 percent, accounting
for 60.6 percent of China's total
oil consumption in 2015. Oil con-
sumption rose 4.4 percent to 534
million tons during the same peri-
od, a report released by the Eco-
nomics & Technology Research
Institute of China National Petro-
leum Corporation, stated.
According to the report, China’s
reliance on foreign crude will in-
crease to 62 percent this year
(2016) with total imports estimat-
ed at about 357 million tons.
Crude demand will rise by 4.3
percent to 566 million tons during
the same period.
But some experts have said, the
expanding oil imports pose risks
to the country's energy security.
Analysts believe that by 2020,
nearly 65 percent of the oil con-
sumed in China will have to be
imported. China is not only the
world's largest oil buyer and con-
sumer, but also a seller of refined
oil. As a result, it is estimated
that exports of China refined oil
will increase 31 percent to 25 mil-
lion tons this year.
Slump in oil prices fuels increase in China's
crude imports
Twitter@NNPCgroup www.facebook.com/NNPCgroup
Business brief contd.
3
Business Intervention
Programmes
Organizational restructuring in-
tended to improve performance
will be anchored on four autono-
mous business units with a lean
CHQ.
Renegotiated OPA contract and
initiated crude direct sales and
direct purchase of petroleum
products for value addition.
Total value of 80.34 billion naira
was received as sales revenue for
petroleum products in the month
of December,2015 compared
with 66.96 billion naira received
in the month of November, 2015.
Ensures uninterrupted fuel supply
through improved product import
storage and distribution across
the country.
Key Achievements Key Challenges
Securing national crude oil and
products pipelines across the coun-
try remained a significant challenge
to NNPC operations. 2,832 vandal-
ized points recorded from January
to December, 2015, resulting in a
loss of 59.71billion naira of crude
and products value.
Pushing for reforms in the refineries
and implementation of new business
model is essential to attaining
greater refinery performance. Industry Watch
NNPC cost control key to
our reform-Kachikwu
An important element of the
NNPC reform programme under
the 20 Fixes Restructuring is on
cost reduction and maximization of
opportunities. To this end, and in
pursuit of this objective, NNPC
and its JV partner Chevron signed
an epoch project financing ar-
rangement that would significantly
impact on oil and gas project fi-
nancing especially in Africa and
the Middle East. The 1.2 billion
dollar multi-year drilling financing
would cover 23 onshore and 13
offshore wells on Oil Mining Leas-
es 49, 90, and 95 covering the year
2015-2018.
The objective of the alternative
project financing is to help miti-
gate production decline and en-
hance oil and gas production.
China’s imported oil increased to
over 60 percent last year amid
falling oil prices and steadily-
growing domestic energy de-
mand.
China imported 328 million tons
of oil, up 6.4 percent, accounting
for 60.6 percent of China's total
oil consumption in 2015. Oil con-
sumption rose 4.4 percent to 534
million tons during the same peri-
od, a report released by the Eco-
nomics & Technology Research
Institute of China National Petro-
leum Corporation, stated.
According to the report, China’s
reliance on foreign crude will in-
crease to 62 percent this year
(2016) with total imports estimat-
ed at about 357 million tons.
Crude demand will rise by 4.3
percent to 566 million tons during
the same period.
But some experts have said, the
expanding oil imports pose risks
to the country's energy security.
Analysts believe that by 2020,
nearly 65 percent of the oil con-
sumed in China will have to be
imported. China is not only the
world's largest oil buyer and con-
sumer, but also a seller of refined
oil. As a result, it is estimated
that exports of China refined oil
will increase 31 percent to 25 mil-
lion tons this year.
Slump in oil prices fuels increase in China's
crude imports
Twitter@NNPCgroup www.facebook.com/NNPCgroup
© NNPC GROUP Energy in Brief, 2016
S ideline stories
Nigerian Airforce to partner NNPC
on pipelines surveillance drone
Nigerian Airforce has indicated its interest to
partner with NNPC to enhance pipeline secu-
rity across the country.
Making a presentation on its prototype drone
surveillance aircraft to the management of
NNPC, the Nigerian Airforce said the Aircraft
is built on home based technology that ad-
dresses the peculiarity of the Nigerian terrain.
It solicited NNPC to partner with it to support
the manufacturing of the aircraft on need ba-
sis. The craft code named Gulma, is the first
indigenous unmanned aerial vehicle, UAV
built by the Nigerian Airforce. It has the ca-
pacity to fly for 12 hours of surveillance oper-
ations with crew and state of the art radio and
video communication.
Speaking, the Minister of State for Petroleum
Resources and the Group MD, of the NNPC,
Dr. Ibe Kachikwu, represented by the Group
Executive Director, Commercial and Invest-
ment Dr. Babatunde Adeniran expressed
confident on the ability of the Nigerian Air
force to support NNPC in curbing the men-
ace of pipeline vandalism in the country.
In a bit to fully appraise
the monumental challenges
facing the distribution of
petroleum products across
Nigeria, the Minister of
State for Petroleum Re-
sources and the GMD of
NNPC Dr. Ibe Kachikwu
together with senior man-
agement staff of the Cor-
poration undertook a facil-
ity tour of storage and dis-
tribution installations at
the Robert Island in Lagos.
The Island is a major re-
ceiving terminal for im-
ported petroleum products
that are pumped via pipe-
lines to major coastal stor-
age tanks in the country
for distribution across Ni-
geria.
The Minister was quick to
sum up his impression of
the visit: ‘What I have
seen here is amazing, very
frustrating and an eye
opener for the problem
NNPC is facing – I don’t
think Nigerians understand
the magnitude of the prob-
lems at hand- the more so-
lutions you bring the more
problems show up.’ Dr
Kachikwu, was reacting to
the large scale destructions
of oil pipelines and out-
right stealing of petroleum
products across the length
and breadth of the commu-
nity where oil facilities and
other critical infrastructure
lays.
Over, 2,832 vandalised
pipeline points have been
recorded in the country in
past twelve months dis-
rupting efforts at ensuring
steady supply and distribu-
tion of petroleum products
in the country.
Kachikwu expresses concern over pipelines
vandalism
4 All correspondence to: [email protected]
Minister of State for Petroleum Resources and the GMD of NNPC Dr.
Ibe Kachikwu together with GED C&I, Dr. Babatunde V. Adeniran
with senior security officials inspecting a major NNPC pipeline vandal-
ized on Robert Island in the Atlas Cove area in Lagos.
The Nigerian Airforce Unmanned Aerial Vehicle, (UAV)
code named Gulma.
© NNPC GROUP Energy in Brief, 2016
S ideline stories
Nigerian Airforce to partner NNPC
on pipelines surveillance drone
Nigerian Airforce has indicated its interest to
partner with NNPC to enhance pipeline secu-
rity across the country.
Making a presentation on its prototype drone
surveillance aircraft to the management of
NNPC, the Nigerian Airforce said the Aircraft
is built on home based technology that ad-
dresses the peculiarity of the Nigerian terrain.
It solicited NNPC to partner with it to support
the manufacturing of the aircraft on need ba-
sis. The craft code named Gulma, is the first
indigenous unmanned aerial vehicle, UAV
built by the Nigerian Airforce. It has the ca-
pacity to fly for 12 hours of surveillance oper-
ations with crew and state of the art radio and
video communication.
Speaking, the Minister of State for Petroleum
Resources and the Group MD, of the NNPC,
Dr. Ibe Kachikwu, represented by the Group
Executive Director, Commercial and Invest-
ment Dr. Babatunde Adeniran expressed
confident on the ability of the Nigerian Air
force to support NNPC in curbing the men-
ace of pipeline vandalism in the country.
In a bit to fully appraise
the monumental challenges
facing the distribution of
petroleum products across
Nigeria, the Minister of
State for Petroleum Re-
sources and the GMD of
NNPC Dr. Ibe Kachikwu
together with senior man-
agement staff of the Cor-
poration undertook a facil-
ity tour of storage and dis-
tribution installations at
the Robert Island in Lagos.
The Island is a major re-
ceiving terminal for im-
ported petroleum products
that are pumped via pipe-
lines to major coastal stor-
age tanks in the country
for distribution across Ni-
geria.
The Minister was quick to
sum up his impression of
the visit: ‘What I have
seen here is amazing, very
frustrating and an eye
opener for the problem
NNPC is facing – I don’t
think Nigerians understand
the magnitude of the prob-
lems at hand- the more so-
lutions you bring the more
problems show up.’ Dr
Kachikwu, was reacting to
the large scale destructions
of oil pipelines and out-
right stealing of petroleum
products across the length
and breadth of the commu-
nity where oil facilities and
other critical infrastructure
lays.
Over, 2,832 vandalised
pipeline points have been
recorded in the country in
past twelve months dis-
rupting efforts at ensuring
steady supply and distribu-
tion of petroleum products
in the country.
Kachikwu expresses concern over pipelines
vandalism
4 All correspondence to: [email protected]
Minister of State for Petroleum Resources and the GMD of NNPC Dr.
Ibe Kachikwu together with GED C&I, Dr. Babatunde V. Adeniran
with senior security officials inspecting a major NNPC pipeline vandal-
ized on Robert Island in the Atlas Cove area in Lagos.
The Nigerian Airforce Unmanned Aerial Vehicle, (UAV)
code named Gulma.