President Muhammadu Buhari has sought an approval of N4 trillion as payments for petrol subsidy this year.
This it s contained in a letter addressed to the House of Representatives, titled “Submission of the Revised 2022 Fiscal Framework”.
Femi Gbajamila, speaker of the house of representatives, read the letter during a plenary on Thursday.
In February, President Buhari had requested the provision of N2.557 trillion for petrol subsidy payments in 2022 as petrol subsidy payments gulped N1.43 trillion in 2021.
In the letter dated April 5, Buhari said the incremental provision by N442.72 billion from N3.557 trillion to N4 trillion was necessary in the face of current economic developments, including the increased market price of crude oil aggravated by the Russian-Ukraine war.
“As you are aware, there have been new developments both in the global economy as well as in the domestic economy which have necessitated the revision of the 2022 Fiscal Framework on which the 2022 Budget was based,” he said.
“These developments include spikes in the market price of crude oil, aggravated by the Russian-Ukraine war, signiﬁcantly lower oil production volume due principally to production shut-ins as a result of massive theft of crude oil between the production platforms and the terminals.”
According to him, the decision to suspend the removal of petrol subsidy at a time when high crude oil prices have elevated the subsidy cost has signiﬁcantly eroded government revenues.
“Following these developments, it has become necessary to adjust the fiscal framework and accordingly, amend the 2022 Appropriation Act to ensure its successful Implementation,” Buhari said.
He said the adjustments to the 2022 fiscal framework included an increase in the projected oil price benchmark, from $62 per barrel to $73 per barrel, up by US$11 per barrel.
“A reduction in the projected oil production volume by 283,000 barrels per day, from 1.883 million barrels per day to 1.600 million barrels per day,” the letter reads.
“An increase in the Estimated provision for PMS subsidy for 2022 by from N442.72 billion from N3.557 trillion to N4.00 trillion.
“A cut in the provision for federally-funded upstream projects being implemented by N152.80 billion from N200 billion to N352.80 billion.
Based on the above adjustments, the president said the federation account (Main Pool) revenue for the three tiers of government is projected to decline by N2.418 trillion, while FG’s share from the account (net of transfer to the federal capital territory (FCT) and other statutory deductions) is projected to reduce by N1.173 trillion.
He, however, noted that the amount available to fund the FG’s budget is projected to decline by N772.91 billion due to the increase in the projection for independent revenue (operating surplus remittance) by N400 billion.
“Given the urgency of the request for revision of the 2022 Fiscal Framework and 2022 Budget amendments, I seek the cooperation of the National Assembly for expeditious legislative action on this request,” Buhari said.
“Please accept. Right Hon. Speaker, the assurances of my highest consideration.”
The FG had proposed an 18-month extension for the implementation of the petroleum industry law to cater for subsidy shortfall.
More Boost for Nigeria as Oil Production Rises to 1.6mbpd
•NNPC shops for new American IOC for Bonga South-west Aparo FID in 2024
•NCDMB to get first dividend payment from Waltersmith Refinery by year end
•Security, cost optimisation, others at front burner as NLNG, IOCs seek solutions
Nigeria is speedily recovering from the months of under-production with oil production at 1.59 million barrels per day as of yesterday, according to the Nigerian National Petroleum Company Limited (NNPC).
The Chief Investment Officer, NNPC Upstream Investments Management Services (NUIMS), Mr. Bala Wunti, who represented the company’s Executive Vice President, Upstream, Mr. Adokiye Tombomieye, disclosed this during a panel session at the ongoing 11th Practical Nigerian Content Forum (PNC) in Uyo, Akwa Ibom State.
Wunti, also said the NNPC and its partners were making significant efforts with corresponding outcomes in the upstream oil sector, revealing that the company was bringing another American oil major to take part in the Bonga Southwest/Aparo Final Investment Decision (FID) billed to take place in 2024.
Also at the forum entitled, “Deepening Nigerian Content Opportunities in the Decade of Gas”, Waltersmith Petroman Oil Limited announced that the NCDMB would get its first dividend payment from its 5000 barrels per day modular refinery in Imo State by the end of the current financial year.
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However, issues bothering on challenges of the nation’s oil and gas industry including insecurity, high operational costs, enabling fiscal policies and other such bottlenecks were at front burner as the Nigeria Liquefied Natural Gas (NLNG) Limited, Shell, TotalEnergies and Chevron unanimously canvassed the need to address those problems to drive investments in the gas sector.
Speaking during the panel, which was on “Defining the Requisite Roadmap for Increased Gas Production,” Wunti said the achievement of the 1.59bpd production yesterday was resulted from the collaboration between the NNPC, its partners, the private security contractors and other stakeholders in the industry.
He said that meant that a significant quantity of the lost production volume had been recovered, adding that it represented an average of about 250,000 barrels over the last six months.
Wunti said, “I like talking about outcome and matching the outcomes with the efforts. We do know that in January, our budget is 1.8 million barrels per day.
“I’m sure His Excellency has not been getting the money that he should get from the treasury because the budget was anchored on 1.8 million barrels.
“It degenerated somewhere in July, August to about one million barrels. I’m glad to say, with the collaboration of every one of us and the private security contractor that we put in place, our production today is about 1.59 million barrels this morning. That means we have recovered significant quantity.
“On the average, about 250,000 barrels over the last six months, but on a snapshot, we have seen the 400,000 barrels increase that was deferred earlier as a result of significantly either stealing or as a result of our inability to produce as a result of environmental reasons and some other reasons.”
He, however, revealed that the company was bringing another American oil major to take part in the Bonga Southwest/Aparo Final Investment Decision (FID) billed to take place in 2024.
Bonga Southwest/Aparo is a conventional oil development located in deepwater in Nigeria and is operated by Shell Nigeria Exploration and Production Company Limited.
Discovered in 2001, Bonga Southwest/Aparo lies in block Oil Mining Licence (OMLs 118, 140 and 132, with water depth of around 4,395 feet.
The project is currently in approval stage and was expected to start commercial production in 2026. The FID of the project was to be approved in 2022 and the development of the asset would involve the drilling of approximately 24 wells and includes Floating Production, Storage and Offloading (FPSO) and subsea trees.
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Production from the project was expected to begin in 2026 and was forecast to peak in 2027, to approximately 146,765 bpd of crude oil and condensate and 157 Mmcfd of natural gas. Based on economic assumptions, the production would continue until the field reaches its economic limit in 2059.
Also, the field was expected to recover 759.56 million barrels of oil equivalent (Mmboe), comprised of 644.86mbbl of crude oil and condensate and 688.17bcf of natural gas reserves.
The field is owned by Shell, Eni, TotalEnergies, Chevron, Exxon Mobil and Luke Oil.
“I did mention that we’re going for FID on Bonga North either last quarter of this year or first quarter next year. I did mention that Bonga South-west is going to sleep, we’re going to focus on 2024. We’re aligning with all our partners to focus on doing Bonga South-west/Aparo.
“We’re bringing one American more to make it for Aparo. So we’re targeting the FID in 2024. Several other projects with Chevron, we hope to do the FID before the end of first quarter of 2023 – the Agbami Gas Project. All these are coming with significant gaseous hydrocarbon,” he noted.
He said the current improvement in electricity supply was a result of the security architecture, which has enabled the generation of additional 500 million standard cubic feet (scuf) of gas, assuring that the NNPC would be sending additional 250 million scuf to NLNG and 250 million scuf to the domestic market.
“That increase is making Egbin and all the other power plants around Lagos very stable. And we’re making sure that all the efforts we make we can measure them. I was very excited when I saw Simbi putting the outcome versus the input. So in upstream today, we don’t look at only the input and the output, but we go all along to capture and commend the outcome”, Wunti added.
Delivering the sponsor’s keynote address, the Chairman of the Independent Petroleum Producers Group (IPPG) and Waltersmith Petroman Oil Limited, Mr. Abdulrazaq Isa, announced that the NCDMB, which is an investor in the 5000 barrels per day Waltersmith modular refinery would be receiving its first dividend by the end of the 2022 financial year.
According to Isa, “After just 27 months of operations, NCDMB will receive its first dividend payment from the refinery for this financial year. We also forecast that by Q2 2023, the refinery will have paid off all its debt and commenced installation of another module of 5000 bpd.
“The Waltersmith Refinery which was enabled by NCDMB has been phenomenally successful.”
Isa also stated that the Minister of State for Petroleum Resources, Chief Timipre Sylva, had been instrumental in driving the Decade of Gas policy, which aims to unlock over three billion cubic feet of gas per day.
He added that this would create significant benefits for Nigeria by attracting Foreign Direct Investments (FDIs) in excess of $10 billion in addition to creation of millions of jobs across the gas value chain.
He posited that unlocking this gas potential within the decade would certainly involve big gas development projects, where the local content successes recorded on similar projects could be replicated.
He said the commitment of funds under the NCDMB’s commercial ventures partnership programme continues to stimulate investment and promote in-country capacity, adding that it was imperative that the role NCDMB had played through strategic investments and as a business catalyst on impactful projects were highlighted.
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Isa maintained that the Waltersmith refinery was a notable example of efforts of the NCDMB to promote local content through active financial participation in businesses that have huge local values.
He disclosed that the refinery has enhanced value-add from the industry by increasing local refining capacity, creating employment opportunities, and delivering diesel, kerosene, naphtha and High Fuel Oil (HFO) into the domestic market.
In his remarks, the Executive Secretary of NCDMB, Mr. Simbi Wabote, revealed that the board has achieved 54 per cent local content retention level in the Nigerian oil and gas industry in 2022.
According to him, the push for Nigerian Content as envisaged in the agency’s 10-year Strategic Roadmap has continued to yield results in the last five years, pointing out that out of the 96 initiatives under the strategic roadmap, NCDMB has completed 77.
“It is my pleasure to announce that the 2022 Nigerian Content level in the Nigerian oil and gas industry is 54 per cent based on our monitoring and evaluation of industry activities which bring the average in the last five years to 44 per cent Nigerian Content level.
“Once again, this performance is well above the minimum target of 42 per cent NC set for 2022 by the Board’s Project Management Office (PMO) just like we outperformed the 38 per cent NC target set for 2021 by achieving 42 per cent Nigerian Content.”
He listed the top-three performers of in-country spend in 2022 as Fabrication and Construction at 99 per cent NC, Manpower at 81 per cent NC, and Project Management at 80 per cent NC, while the bottom-3 performers were Procurement at 34 per cent NC, Engineering at 46 per cent NC, and Services at 50 per cent NC.
He noted that the Practical Nigerian Content Forum was a flagship event of the Board which attracts major stakeholders in the oil and gas industry from across Nigeria.
“The event serves as an opportunity to showcase the practical investment opportunities and achievements by NCDMB in the Nigerian oil and gas industry and its linkage sectors.
“It also hosts senior government officials, heads of International and Indigenous Oil Companies, and exhibitions of industry products and services in the upcoming event.”
However, in their separate interventions during the panel session moderated by the pioneer Executive Secretary of NCDMB, Dr. Ernest Nwapa, the Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company Limited (SPDC), Mr. Osagie Okunbor; Managing Director of TotalEnergies Upstream Nigeria Limited, Mr. Mike Sangster; Managing Director of Chevron Nigeria Limited, Mr. Rick Kennedy; and Deputy Managing Director of NLNG, Mr. Olalekan Ogunleye, harped on the need to address the challenges confronting operators in the nation’s oil and gas industry.
They listed such issues as insecurity, high operational costs, unfavourable fiscal policies and other such bottlenecks that make Investments in the industry especially achieving the Decade of Gad agenda difficult.
Used car market booms as Nigeria’s imports rise by 100%
As automakers and dealers of new vehicles in Nigeria are lamenting poor sales, used car market is experiencing a boom as the latest report from the National Bureau of Statistics has revealed.
The report covering the third quarter of this year showed that Nigerians spent about N195bn on fairly used cars, motorcycles and auxiliary cycles between July and August this year.
Specifically, it states that a total of N194.8bn was spent on the imports of fairly used vehicles, motorcycles and cycles fitted with an auxiliary motor.
This shows an increase of over 100 per cent compared to N83bn spent on used cars sourced from the United States (N79.66bn) and Italy (N4.33bn) in the previous quarter.
The revelation came amid calls for patronage of Nigeria-assembled vehicles in line with a presidential directive to all government’s ministries, departments and agencies.
The country has indigenous car makers with notable names such as Innoson Motors, Nord Automobile and Stallion Motors.
The NBS said, “Manufactured goods mainly imported were ‘used vehicles, with diesel or semidiesel engine, of cylinder capacity 2500cc’ from the United States of America and Italy worth N75.15 billion and N3.27 billion, followed by ‘Filters’ from China and United Arab Emirates valued at N56.66 billion, N0.99 billion respectively
Just in: CBN limits ATM withdrawals to N20,000 weekly
The Central Bank of Nigeria has restricted cash withdrawals through the automated teller machine (ATM) to N20,000 per week, as part of measures to promote its cashless policy.
The CBN also imposed a limit of N100,000 weekly and N500,000 weekly on over-the-counter cash withdrawals for individuals and corporates respectively.
It announced this in a circular with reference number, BSD/DIR/PUB/LAB/015/069 directed to banks and other financial institutions dated December 6, 2022.
The circular is titled, ‘Letter to All Deposit Money Banks (DMBS) and Other Financial Institutions (Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs):
According to the apex bank, withdrawals above the limits attract five per cent processing fee for individuals and 10 per cent for corporates.
The development is coming two weeks after the bank unveiled its newly redesigned notes of N1,000, N500 and N200 note on November 23, 2022.
The bank had in October lamented that 85 per cent of the money in circulation are not in the bank vaults and is hoarded by the public.
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