By Udeme Akpan

WITH the coronavirus pandemic, unstable oil supplies and uncertainty that held sway in the volatile global oil market, the year 2021 was challenging to oil and gas producing and exporting countries, including Nigeria. The situation was also worsened by pipeline vandalism, oil theft, illegal refining and environmental pollution.

Despite these and other challenges, the nation recorded many milestones, through the instrumentality of the Nigerian National Petroleum Company (NNPC) Limited, which drives the government’s interests in the oil and gas industry. For instance, it facilitated the emergence of the passage of Petroleum Industry Act (PIA), the nation’s comprehensive legislation, clearly the most profound highlight of the industry in the last 20 years. As a national oil company, the NNPC was at the forefront and provided the stimulus for the executive and the legislature to successfully midwife the passage of the Petroleum Industry Bill (PIB) into law (Petroleum Industry Act 2021). The passage of this law is envisaged to foster investment in the industry and delineate responsibilities to the various institutions.

Impact of PIA

The PIA culminated in the establishment of a commercialized NNPC Limited, entrenching accountability and good governance and promoting the exploration and exploitation of the petroleum resources in Nigeria for the benefit of all Nigerians as well as and foster the sustainable development of the host communities. It would ensure the efficient and effective technical and operational regulation of the upstream, midstream and downstream sectors of the oil industry through the activities of the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Regulatory Authority, among others.

In line with the PIA, steps have been taken toward the enhancement of Transparency, Accountability and Performance Excellence (TAPE) in NNPC as a strategic roadmap for NNPC to attain efficiency and global excellence with a view to placing the Corporation on the path of profitability. Within the period under review, the GMD/CEO, NNPC and his top management team continuously monitored 2021 Key Performance Indicators of the various directorates, ensuring profitability, practicability, cost optimization and transparency. It is worthy to mention that the drive for efficiency, effectiveness, and accountability within the new NNPC Ltd yielded immediate results with the organisation posting profit for the first time in 44 years.

Transparency, Accountability

Besides, NNPC partnered with the Nigeria Extractive Industries Transparency Initiative (NEITI) and others to ensure clarity of purpose in communication with its primary stakeholder, Nigerians, through transparency and accountability. Also, the Extractive Industries Transparency Initiatives (EITI), a multi-stakeholder coalition that promotes extractive transparency and accountability across the world commended the GMD/CEO of NNPC for his commitment to promoting and deepening the culture of transparency and accountability in the Corporation.

Projects, Programmes

Furthermore, the NNPC and its partners in the Brass Fertilizer and Petrochemical Company Limited (BFPCL), namely DSV Engineering Limited and Nigerian Content Development and Monitoring Board (NCDMB) took the Final Investment Decision (FID) for the construction of the first-ever methanol plant in Nigeria at the cost of $3.6 billion. The plant, an integrated methanol and gas project in Odioma, Brass Island, Bayelsa State, which is scheduled to come into operation in 2024, is expected to produce 10,000 tons of methanol daily. The facility, which would be the largest methanol plant in Africa and the first in Nigeria is expected to create 35,000 direct and indirect jobs and additional 5,000 permanent jobs during the operations phase.

Additionally, it also works towards the execution of a US$260 million funding agreement for ANOH Gas Processing Company Limited (AGPC) among the NNPC, Seplat and a consortium of seven banks. It is envisaged that the gas project will significantly contribute to the realisation of the Federal Government’s initiatives towards increasing natural gas utilization in the domestic market. The project will deliver 300 million standard cubic feet of gas per day and 1,200 megawatts of electricity to the domestic market. It would also expand gas infrastructure in Nigeria, taking Federal Government’s aspirations to make natural gas the future energy for Nigeria one step further.

It launched the Nigerian Upstream Cost Optimization Programme (NUCOP), targeted at driving down the cost of crude oil production in the country so as to remain competitive in the global market. The company also awarded the $1.5 billion contract for the Rehabilitation of the Port Harcourt refinery. The rehabilitation project, which has since kicked off was largely commended by the visiting Federal House of Representatives Committee on Petroleum Downstream.

READ ALSO: Ownership of N’Delta crude oil: Obasanjo mischievous — PANDEF

In the area of gas commercialization, NNPC signed a gas development deal with Sterling Oil Exploration and Production Company (SEEPCO) to unlock 1.2 trillion Cubic Feet (TCF) of gas in September 2020. The gas commercialization strategy for OML 143 is in line with the Federal Government’s National Gas Expansion Programme (NGEP). Gas in the block is processed at the Ashtavinayak Hydrocarbon Limited (AHL) 125 million standard cubic feet (mmscf) Gas Processing Facility, which is currently in operations and located in Kwale, Delta State.

The company further delved into the execution of OML 118 (Bonga) Agreements between NNPC & Partners (Shell, Total, Exxon and Eni) to pave the way for the renewal of the PSC for an additional 20 years. The deal marked an end to about 15years of long-standing disputes over the interpretation of the fiscal terms of the production-sharing contract between NNPC and its partners.

It signed the Shareholder Agreement for Brass Petroleum Product Terminal (BPPT). When completed, the BPPT will help close the infrastructure gap in the distribution of petroleum products which will consequently stabilise petroleum product prices in the riverine communities of the Niger Delta. The BPPT will also checkmate illegal refining and create over 10,000 jobs. The terminal will also serve as a strategic reserve for the country and is expected to provide a depot for a 50 million-litre facility, two-way product jetty, automated storage and automated bay for Automotive Gas Oil (AGO), Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK) and Aviation Turbine Kerosene (ATK).

The NNPC partnered with China Machinery Engineering Company (CMEC) and General Electric (GE) to execute an Engineering, Procurement Construction (EPC) contract for the procurement of equipment for a 50MW Emergency Power Project in Maiduguri, Borno State. The project is an integral part of NNPC’s efforts to deepen Nigeria’s domestic gas utilization for the nation’s socio-economic growth. More than that, it posted a profit after tax of N287 billion due to the aggressive cost-cutting measures adopted by the Corporation, cost savings through renegotiation of contracts by up to 30 percent, improved efficiency through business automation, emphasis on commercially focused investment and non-interference in the management of the corporation’s affairs among other factors.

Among the highlights of the 2020 Audited Financial Statement, AFS is the Corporation’s group profit which rose from a loss position of N1.7 billion in 2019 to a profit of N287 billion in 2020, for the first time in 44 years.

The company also constructed/rehabilitated 21 roads under Federal Government’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme. The Federal Executive Council (FEC) approved N621.2 billion for NNPC to take over the reconstruction of 21 federal roads across the six geo-political zones of the country. The construction and rehabilitation of the selected roads are meant as a strategic intervention under the Federal Government Road Infrastructure and Refreshment Tax Credit Scheme. It also succeeded in sustaining petroleum products supply, thus guaranteeing energy security for Nigerians.

Expectations

However, expectations are high that the PIA would bring about increased local and foreign investment in the industry. As a major player, the NNPC Limited is expected to assist in directing investment to areas capable of adding much value and impact to the nation’s economy.

It is also expected that it would work with others to tackle many problems, especially pipeline vandalism, oil theft, illegal refining and environmental pollution in the industry.