South-South Govs Meet President Over Subsidy’s Effect On Derivation

* NNPC: Nigeria earns $47.257bn from oil in 13 months
* Forecloses upward review of price of petrol

President Muhammadu Buhari yesterday in the Presidential Villa
held a closed-door meeting with four of the six South-south
governors.
The meeting which held between 3 and 4p.m., was attended by
Governors Nyesom Wike (Rivers), Seriake Dickson (Bayelsa), Udom
Emmanuel (Akwa Ibom) and Ifeanyi Okowa (Delta).

After the meeting, Dickson who spoke on behalf of the governors,
failed to disclose the purpose of the meeting. He also failed to
give insight into discussions in the meeting.

Instead, the governor said they only came to see the president
over what he described as pertinent issues about Nigeria and the
Niger Delta.
He was, however, swift to add that the meeting had nothing to do
with party matters.

He said: “My colleagues and I came to have a meeting with the
president on issues that are pertinent to Nigeria and South-south
states and we had a robust discussion. Thank you. It’s not about
APC or PDP.”

However, THISDAY sources that were privy to the meeting said it
was to discuss the debilitating effect of Nigeria National
Petroleum Corporation (NNPC) huge spending on petrol subsidy on the
derivation that should accrue to the oil-producing states.

According to the sources, huge subsidy payment, which were being
made before oil proceeds are remitted to the Federation Account,
were adversely affecting the 13 per cent derivation that should
accrue to the oil-bearing states.

“The states are suffering because their derivation allocation
had reduced substantially, and they felt that this had to stop,
particularly because the practice is essentially unconstitutional,
therefore, illegal,” a source told our reporter, adding, “They felt
they could return to the Supreme Court to test the legality of the
practice, they felt it was better to discuss it with the president
first.”

The sources said Buhari told the governors that he would look
into the matter, pointing out that it was a sensitive matter that
needed a careful consideration.

As at August this year, the national oil corporation’s subsidy
had risen to N3billion daily.

Another THISDAY source said a recent Supreme Court landmark
judgment, which had ordered the federal government to adjust its
share of proceeds from the sale of crude oil whenever the price
exceeds $20 per barrel might have also been discussed.

This belief was spurred by the invitation of the
Attorney-General of the Federation and Minister of Justice, Mr.
Abubakar Malami, to the meeting after it had taken off.

The Supreme Court had on October 18, ruled on a suit brought by
the Attorneys-General of Rivers, Bayelsa and Akwa Ibom States on
the terms of settlement between AGF and the plaintiffs.

The seven-man panel of the Supreme Court led by the Chief
Justice of the Federation, Justice Walter Onnoghen, had in a
unanimous judgment, ruled that 13 per cent derivation accruable to
oil producing states should be paid upon recovery as provided for
in Section 162 of the 1999 Constitution (as amended).

The plaintiffs, that is, the Attorneys-General of Akwa Ibom
State, Mr. Uwemedimo Nwoko; Bayelsa State, Mr. Wodu Kemasukde; and
the Rivers State, Emmanuel Aguma (SAN), now deceased, had in
November 2017 sought the apex court’s interpretation of Section
16(1) of the Deep Offshore and Inland Basin Production Sharing
Contract Act in suit number SC964/2016 filed on their behalf by Mr.
Lucius Nwosu (SAN).

This section places an obligation on the federal government to
adjust the shares of crude oil revenue accruable to the federation
whenever the price exceeds $20 per barrel.
The plaintiffs had asked the court to determine if the federal
government was not obliged to abide by the provision of the
constitution as the grund norm of the land.

Accordingly, the matter was resolved in their favour as the
eminent jurists asked the federal government to accordingly adjust
the sharing formula once the price of crude oil exceeds $20 per
barrel.

In a swift reaction to the judgment, Dickson had through his
media aide, Fidelis Soriwei, praised the apex court for its courage
to uphold the tenets of the constitution, saying it had further
rekindled the confidence of the people of the Niger Delta whom he
said had been deprived of their rights, in the judiciary.

He said, “We commend the Supreme Court of Nigeria for upholding
the rule of law. The courageous intervention of the court in this
case and other cases is what is needed to bring confidence to the
long suffering people and communities of the Niger Delta and the
country at large.

“This judgment shows clearly that the judiciary is ready and has
the courage in deciding cases to uphold the rights of oppressed
people. We call on other courts in the judicial system to rise to
the occasion in order to give the assurance that oil majors and oil
block owners operating in our communities will respect the laws of
the land.”
It was therefore believed that the meeting was meant to work out
the modalities for the new sharing agreement.

NNPC: Nigeria Earns $47.257bn from Oil in 13
Months

Meanwhile, a new report by the Nigerian National Petroleum
Corporation (NNPC) has revealed that between May 2017 and May 2018,
Nigeria earned $47,257,178,735 from crude oil, representing an
increase of $13,112,090,598 from the $34,145,088,137 the country
earned between May 2016 and May 2017.

This is coming as the corporation has also clarified that even
though it has been bearing the high cost of importation of petrol
as the sole importer of the product since October 2017, it has no
plan to review upwards, the N145 per litre price of the
commodity.

The NNPC in a summarised copy of its June 2018 monthly
operations and financial report, which THISDAY in Abuja sighted
yesterday, disclosed that the money was the value for 774,166,187
million barrels (mb) of crude oil that was produced from oil
fields.

The figures, production and revenue, were, however, different
from what was recorded by the country between May 2016 and May
2017.

According to the corporation’s records for May 2016 and May
2017, oil production was 685,800,421mb, with the accrued revenue
amounting to $34,145,088,137.

The NNPC explained in the June 2018 report which also showed a
difference of about N11 billion in its trading profits between the
months of May and June 2018, that the $47,257,178,735 earned was
however shared between the Nigerian government, International Oil
Companies (IOCs) and alternative financing (AF) entities.

The NNPC’s report which is yet to be published on its webpage,
came at a time the corporation said the federal government has no
plans to review the pump price of petrol it currently subsidises in
the country.

In the report, the corporation indicated that the federal
government within the period got $14,991,801,512 as its share of
the oil revenue from 247,413,205mb of oil it lifted as against
$10,980,402,262 it previously got for the same period from lifting
220,199,527mb of oil.

The IOCs, which included independent producers and NNPC’s
subsidiary – the Nigerian Petroleum Development Company (NPDC), got
$30,354,101,114 as their share from lifting 497,817,456mb of oil,
different from $22,681,908,242 they previously got from lifting
445,983,713mb of oil.

For AF entities, the NNPC report stated that they got
$1,911,276,109 from their lifting of 28,935,026mb of oil for the
period which is different from $482,777,634 they got from lifting
9,617,181mb of oil between May 2016 and May 2017.

The NNPC’s report also indicated the corporation recorded a
trading surplus of N7.17 billion which was N10.97 billion less than
the N18.12 billion it said it recorded as profit in the previous
month of May 2018. NNPC in this regards blamed the decline in oil
production and liftings of NPDC for the revenue shortfall.

NNPC Forecloses Review of Price of Petrol

Meanwhile, the NNPC in a statement from its Group General
Manager, Public Affairs, Mr. Ndu Ughamadu, has stated that the
federal government has no plan to review prices of petrol either
downwards or upwards.

Ughamadu added that despite the fact that NNPC, since October,
2017, had been the sole importer of petrol into Nigeria, bearing
the associated burdens, it had no plan to review the market prices
of products for now.

He thus cautioned people he described as rumour mongers to be
wary of the impacts their acts could cause on prices of petroleum
products especially petrol as the festive period draws near.

According to him, if not checked, the insinuation of
unsubstantiated price review could lead to artificial scarcity and
hoarding of products by consumers which in turn may result in
unwarranted queues and suffering of Nigerians at fuel stations.

He further asked members of the public to report to the offices
of the Department of Petroleum Resources (DPR) nationwide any
station which sells petrol above the N145 per litre recommended
price, saying the DPR had the mandate to monitor and regulate
activities in the industry.

Ughamadu said the recent statement of the corporation’s Group
Managing Director, Dr. Maikanti Baru that NNPC had 37 days stock of
petrol subsists, and that NNPC has mapped out strategies to ensure
that Nigerians have a hitch-free festive period.

Further, in another statement, Ughamadu, disclosed that NNPC’s
shipping subsidiary, NIDAS Shipping Services, has got back into the
business of international shipment of crude oil and petroleum
products, seven years after falling out of reckoning in the global
oil freighting trade.

He said the re-entry of NIDAS into the global petroleum shipping
business was in tandem with the ongoing strategic re-engineering of
some NNPC subsidiaries to ensure multiple income streams and value
addition to the corporation.

According to him, as a first step to regain its market position,
NIDAS has established a robust chartering and operation desk in its
United Kingdom (UK) office to help it secure sea-going vessels from
spot market and foster strong competitive edge.

He explained that already, the company’s presence had begun to
generate some positive traction in the international freight space
as global tanker fixture’s report last week acknowledged the
chartering of LRI tanker, MV Atlantica Bridge by NIDAS to load jet
fuel from El Dekheila Port, Egypt for delivery to Nigeria for Duke
Oil.
The fixture report it said also captured NIDAS booking of tanker
Res Cogitans to load Mercuria’s gasoline cargo for early-November
loading from Europe’s ARA (Amsterdam-Rotterdam-Antwerp) region to
Offshore Lagos.

NNPC said that as part of strategy to ensure effective
participation in the entire supply value chain, NIDAS would
optimise right of first refusal offer in the NNPC annual crude oil
term and Direct-Sale-Direct Purchase (DSDP) agreements with
off-takers.

It noted that under the terms of the deal, the off-takers are
obligated to offer the NNPC shipping subsidiary the right of first
refusal in freighting of cargoes, adding that the long-term
aspiration of the company is to own and operate fleet to secure a
significant market share in the global shipping market.