From its take-off on 1st April 1977 as a merger of the Nigerian National Oil Corporation (NNOC) and the Federal Ministry of Petroleum and Energy Resources, the Nigerian National Petroleum Corporation (NNPC), now called Nigerian National Petroleum Company (NNPC) Limited, has witnessed key transformations towards a value addition pathway. With key deliverables woven around the investment of about $3.9 billion (about N1.604 trillion) in the first-ever methanol plant project and expansion of gas processing plant and a N287bn first-ever profit this year, Daily Trust in this piece chronicles some of these milestones.
It was a first for the company as it partnered with other agencies in the Brass Fertilizer and Petrochemical Company Limited (BFPCL) comprising DSV Engineering Limited and the Nigerian Content Development and Monitoring Board (NCDMB) to reach the Final Investment Decision (FID) for the construction of first-ever methanol plant in Nigeria at $3.6bn project cost.
The integrated methanol and gas project in Odioma, Brass Island in Bayelsa State is expected to begin operation in 2024, when it will produce 10,000 tons of methanol daily, which will significantly cut the importation of methanol used in various industries. NNPC Ltd collaborated with NCDMB to stake $670 million in the project, its year-to-date record obtained yesterday indicated.
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The facility, which would also be the largest methanol plant in Africa, would create 35,000 direct and indirect jobs and another 5,000 permanent jobs when it begins operation.
The national oil company also reached a $260m Funding Agreement for the ANOH Gas Processing Company Limited (AGPC), partnering with Seplat and a consortium of seven banks. While domestic gas supply is an issue at the moment with the price of cooking gas (liquefied petroleum gas, LPG) skyrocketing, the management of NNPC Ltd is hopeful that the gas project will significantly contribute to more domestic use of gas. The AGPC will deliver 300 million standard cubic feet of gas per day and 1,200 megawatts (MW) of electricity to the domestic market.
This year also, NNPC Ltd commercialized the Oil Mining Lease (OML) 143 Gas by signing a gas development deal with Sterling Oil Exploration and Production Company (SEEPCO) to unlock 1.2 Trillion Cubic Feet (TCF) of gas in September. Gas in the block is processed at the Ashtavinayak Hydrocarbon Limited (AHL) 125million standard cubic feet (mmscf) Gas Processing Facility which is currently in operation and located in Kwale, Delta State. Gas supply from the project will raise Nigeria’s gas production profile and will provide dry gas available for a proposed 950MW NNPC/SEEPCO Independent Power Plant towards increase electricity o the national grid.
More so, it executed the OML 118 (Bonga) agreements between its partners comprising Shell, Total, Exxon and Eni for the renewal of the Production Sharing Contract (PSC) for another 20 years. This was after a 15-year dispute on the revenue terms; now the deal will yield about $780m in immediate revenue to Nigeria and will bring in over $10bn of investments.
NNPC Ltd also entered another agreement with NCDMB and ZED Energy for the Brass Petroleum Product Terminal (BPPT) to help distribute products in the riverine areas and stabilise the price of products in those areas in the Niger Delta. The terminal will also tackle illegal refining, scheduled to create 10,000 jobs with a 50m-litre capacity depot for diesel, petrol, kerosene and Aviation Turbine Kerosene (ATK), among other facilities.
Also, in the year under review, NNPC posted N287bn net profit for the 2020 business year, being the first in 44 years. The profit came as a surprise after it posted a N1.7bn loss in 2019. The year-review record showed that under the Group Managing Director, Mr Mele Kyari, NNPC had some aggressive cost-cutting measures, saved funds by 30 percent after renegotiating contracts and made commercially focused investments.
Then came the passage of the Petroleum Industry Bill (PIB) in July and its subsequent signing into law by President Muhammadu Buhari in August to become the Petroleum Industry Act (PIA). The bill which had spent about 20 years in deliberation had a lot of stimulus by NNPC in midwifing it.
With the PIA 2021, NNPC Limited was incorporated under the Company and Allied Matters Act (CAMA) by the Corporate Affairs Commission (CAC), to on behalf of the Federation, take over assets, interests and liabilities of NNPC. The president received the Certificate of Incorporation on the 8th of October 2021.
NNPC said it has been promoting Transparency, Accountability and Performance Excellence (TAPE) in operations to make the corporation more operationally transparent and accountable. This formed the crucial leverage for its posting of a profit for the first time in 44 years, the company stated.
NNPC Ltd amidst kicks awarded a $1.5bn contract for the rehabilitation of the Port Harcourt Refinery to Tecnimont spA of Italy. The key here is that NNPC Ltd got a credible lender – African Export-Import Bank (Afreximbank) to raise $1bn for the project while the corporation would adopt the Operate & Maintain (O&M) model as a strategy in the execution of the rehabilitation project. And as it is, the rehabilitation project is ongoing and has been lauded by the visiting Federal House of Representatives Committee on Petroleum Downstream, the NNPC year review stated.
In the early part of the year, Maiduguri was thrown into outage after insurgents destroyed a section of a 330 kilovolts (kV) power transmission line; while the Transmission Company of Nigeria (TCN) fixed it, another section was destroyed. NNPC Ltd then intervened to build a 50MW Emergency Power Project in Maiduguri, Borno State, also to boost domestic gas use. NNPC Ltd said it is increasing investment in gas-fired power plants to produce about 5,000MW more power on the national grid.
In ending the year, NNPC Ltd concluded the take-off of the construction and rehabilitation of 21 roads under the Federal Government’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme. The projects worth N621.2bn across the six geopolitical zones are to promote efficient road networks for product distribution.
Also, to guarantee energy security for Nigerians, NNPC said it leveraged on its existing Direct-Sales-Direct-Purchase (DSDP) product supply arrangement to stop the incessant disruptions of petroleum product supply affecting the country and as the holidays came, the anticipated queues at the fuel stations vanished.