NETCO posts N3.37bn profit, declares N400m dividend for 2020

By Solomon Asowata

Lagos, July 22, 2021 (NAN) The National Engineering and Technical Company (NETCO), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has reported a profit before tax of N3.37 billion for the year ended Dec. 31, 2020.

The News Agency of Nigeria (NAN) reports that Mr Adeyemi Adetunji, Chairman, Board of Directors, NETCO, made the disclosure on Thursday at the company’s 2020 Annual General Meeting in Lagos.

Adeyemi said the profit before tax rose by 53 per cent when compared with N2.20 billion achieved in the corresponding of 2019.

Adetunji noted that 2020 witnessed the COVID-19 pandemic which led to socio-economic and humanitarian crisis worldwide thereby bringing economic activity to a near standstill.

He said: “In spite of these challenges, NETCO has posted a total profit before tax of N3.37 billion which represents an increase of 53 per cent from N2.20 billion in 2019.

“The company recorded a total revenue of N18.02 billion in the year under review, which represents 52 per cent decrease compared to 2019 revenue of N37.21 billion. ”

Adetunji said it was noteworthy that NETCO secured the contract award for the Project Management Consultancy/Owner’s Engineer Services for the NNPC’s three Refineries Rehabilitation Projects as the main consultant for the first time.

He said it was also laudable that the company’s performance on several projects in the year under review was undeterred by the lockdown and harsh economic terrain occasioned by the pandemic.

Adetunji commended the Group Managing Director of NNPC, Mr Mele Kyari, the NETCO management and staff as well as other stakeholders for the efforts toward achieving the company’s mandate.

Also, Mr Usman Baba, Managing Director, NETCO, explained that foreign exchange gains constituted 18.43 per cent of the 2019 profit before tax, while it accounts for 121 per cent in the year under review.

Baba noted that the pandemic resulted in negative growth in global businesses leading to low crude demand and reduced investments in most sectors, especially in the oil and gas industry.

He said the reduced industry translated to reduced industry activities for NETCO and other players in the sector, while some existing contracts were either suspended or renegotiated.

Baba said despite these challenges, NETCO was currently executing 15 key contracts in the industry and had continued to contribute to the development of in-country Engineering and Technical capacity.

He said NETCO had also concluded training programme for 17 youths from Iru land who were provided with entrepreneurial skills in fish farming, computer application/web design, catering, leather works, beads making and events management.

Baba said the management was targeting a revenue of N36.58 billion for 2021 financial year.

NAN reports that the board approved a gross dividend of N400 million, which translated to 40k per share for its shareholders. (NAN)

EKEDC Felicitates with Customers on 2021 Eid El Kabir Celebration

Eko Electricity Distribution Company (EKEDC) has felicitated with Muslim Faithfuls and customers as they celebrate this year's Eid-El-Kabir celebration. 

The Company in a goodwill message released on Monday by its General Manager, Corporate Communications, Mr Godwin Idemudia said “As we commemorate this year’s Eid El Kabir, we congratulate our Muslim customers for yet another celebration. There is no doubt, that among other lessons, Eid El Kabir offers a reminder that with total submission to the will of Almighty God, we can overcome our challenge and adversity”. 

“It is important that we continue to imbibe the lessons of Eid El Kabir particularly that of sober reflection, sacrifice, kindness, tolerance, compassion and obedience to the will of God.” 

Idemudia added that the true essence of Eid El Kabir is in giving and sharing with one another, he therefore encouraged everyone to see this period as an opportunity to show love and support, for the underprivileged. 

He also called for tolerance, peaceful coexistence, mutual understanding, and cooperation with the adherents of other faiths adding that these are imperative for national development. 

Idemudia assured customers of adequate power supply throughout the period of the celebration and beyond. He gave the assurance that the company’s technical team will be on hand to clear faults and resolve customer complaints all through the period of the holiday. 

He reiterated that the company's communication channels will be available at all times and encouraged customers to contact the Company using the website; ekedp.com, 24/7 Customer Complaints Unit line:07080655555, email; Customercare@ekedp.com and social media platforms (Twitter; @ekedp, Facebook; Eko Electricity, Instagram; ekedpng). 

 

DPR clarifies issue on subsidy removal

Mr Sarki Auwalu, Director, DPR

The Department of Petroleum Resources (DPR) has clarified reports credited to the agency regarding removal of subsidy on Premium Motor Spirit (PMS).

A statement issued by Mr Paul Osu, Head, Public Affairs, DPR on Tuesday in Lagos, debunked an online report credited to its Director and Chief Executive Officer, Mr Sarki Auwalu.

Osu said the publication stating that the price of PMS could rise up to N1,000 per litre upon the subsidy removal without alternative energy was misleading.

According to him, the comments of the director was clearly taken out of context.

"The director specifically created a scenario of price instability of PMS based on current dollar to naira differentials to the effect that if Nigeria continues to rely on the importation of PMS without creating alternative energy sources like CNG, LNG, AUTOGAS etc which will provide price buffers for consumers and ultimately crash the price of PMS, then the product will be subject to prevailing market forces. 

"The Director further re-emphasised that the strategy for alternative energy sources is  a cardinal programme of the government which has led to the declaration of the Decade of Gas (DoG) with the objective to migrate the Nigerian economy to a gas based economy by 2030."

He said the DPR would continue to enable businesses and create opportunities through its downstream focus on Quality, Quantity, Integrity and Safety.

Hybrid Saharalympics sparks excitement, gold quest at Sahara Group

Leading energy conglomerate, Sahara Group has commenced Season 4 of the Saharlympics, which is the Group's biennial sporting competition that features several games contested by employees across Africa, Asia  Europe and the Middle East.

Mr Bethel Obioma, Head Corporate Communications, Sahara Group, said the Saharalympics is a celebration of "competiveness and camaraderie" and provides a platform for enhancing employee collaboration, recreation, and productivity.

"The Saharalympics made its debut in 2014 and has ever since become a flagship event at Sahara Group that reinforces the role of sports in enhancing excellence, team performance and sustainability. 

This Season 4 is particularly special for us as it coincides with the celebration of Sahara's 25 years of transformative impact and leadership in regional and global energy sectors, " he said.

Obioma said a hybrid approach had been adopted for the 2021 edition that would see 16 teams from Sahara's Power, Upstream, Midstream, Downstream, Infrastructure and Technology businesses compete for medals and glory.

Games for the online version of the Saharlympics include Chess, Scrabble, PlayStation Football and Need for Speed, and Kahoot. 

Football, athletics, volleyball, basketball and other novelty games will be played during the physical games under strict compliance with covid-19 protocol. The online Saharalympics is underway. The physical edition will be held in October.

"The excitement right now in Sahara is palpable and our Saharalympians are ready to trade tackles and moves fairly and expertly in the spirit of the Saharalympics. 

While Saharians will smile home with individual medals, ultimately, just like the conventional Olympic Games, everyone is a winner with the Saharalympics," Obioma added.

The Saharalympics also involves the participation of prominent sports men and women in line with Sahara Group's commitment to celebrating and promoting excellence. 

Previous editions featured Nigeria’s first individual gold medalist at the Atlanta Games in 1996, Chioma Ajunwa, 1996 400m  bronze medalist,
Falilat Ogunkoya and former Super Eagles Captain, Joseph Yobo.

FG targets Nigeria's dominance of West African oil,gas market - DPR

Mr Sarki Auwalu, Director, DPR

The Federal Government says it is targeting Nigeria's dominance of the oil and gas market in the West African region with its ongoing Refinery Revolution and Decade of Gas initiative.

Mr Sarki Auwalu, Director, Department of Petroleum Resources (DPR) , made this known on Wednesday night in Lagos at the Second Quarter, 2021 Business Dinner of The Petroleum Club Lagos.

The topic of the session was: 'A Discussion on the Future of the Nigerian Petroleum Industry'.

Auwalu said  Nigeria must rewrite its history and reverse the resource curse syndrome which had plagued the country for decades by ensuring utilisation of its vast oil and gas resources for national development.

He said the country had the population size and was geographically positioned to be a dominant player in the regional oil and gas market.

The DPR boss said the target of the government was to increase its oil reserves 40 billion barrels and grow gas reserves to 220TCF by 2030.

He said the government also planned to increase production capacity to three million barrels per day.

"This is achievable with the ongoing rehabilitation of the nation's refineries, the coming on stream of the Dangote Refinery and other modular refineries that are under construction

"None of the West African countries have a refinery producing Premium Motor Spirit and this presents a great opportunity for us.

"We can take over the market and it is a future we are looking forward to", Auwalu said.

He said the focus on development of the nation's gas resources would help transform Nigeria to a gas-based economy which would create employment opportunities for the populace.

Auwalu said the passage of the Petroleum Industry Bill (PIB) by the National Assembly was needed to drive these initiatives because it would provide clarity in legal framework, institutional alignment and improved investment climate.

He thanked the members of the Petroleum Club for their contribution to the industry in the past decades, adding that the government would continue to partner with the private sector to achieve its vision for the oil and gas industry.

Earlier in his remarks, Dr Layi Fatona, President, Petroleum Club Lagos, said the association was a think-tank of persons who had played a key role in the petroleum industry and were desirous of improving its contribution to the economy.

Fatona said the COVID-19 pandemic and the global energy transition had made it imperative for Nigeria to make use of its vast petroleum resources within the shortest possible time for national development.

PIB: Stakeholders, TUC reject limiting fuel importation to refiners

Stakeholders in the oil and gas industry and the Trade Union Congress (TUC) have frowned at the provision in the Senate version of the Petroleum Industry Bill (PIB) that allowed only active refinery licence holders to import petroleum products into the country.

The stakeholders, including the NUPENG and PENGASSAN, who spoke on the implications,  noted that the provision, though encouraged local development, might force existing players out of the market, leaving a monopolistic market for the national oil company and big refiners.  

According to them, the development is against business ethics and will deprive the nation all the potential in the recently passed bill.

Speaking, a former President of the Society of Petroleum Engineers Nigerian Council, Joseph Nwakwue, expressed concern that the provisions would create a duopoly in a price deregulated environment, thereby, destroying the Nigerian downstream industry.

Nwakwue said: “In the near term, only NNPC and Dangote will have domestic refining capacity for PMS for instance, so they will be the only importers. This takes the industry back and could not have been the intention of the Bill.

“Moving from a state-owned monopoly in a price regulated market to a duopoly in a price deregulated market is not what Nigeria needs now as it takes the industry backward and exposes Nigerians to exploitation and further hardship. This, in my humble view, is not reformatory.”

He said that rather than seek to protect refiners, the Nigeria should seek to protect consumers by liberalising and expanding petroleum product supply sources. 

According to him, that is the only way prices will be ‘market-determined’ and consumers made to pay fair value for the products they buy. 

"The viability of local refining is not determined or enhanced by locking out competition, it is rather achieved through price deregulation, which has been done in Section 205. This clause gives statutory unfair advantage to private players rather than through market competition,” he added.

Also, the Trade Union Congress of Nigeria (TUC)  described the planned move to limit fuel imports to only owners of refineries as monopolistic and a deliberate attempt to frustrate the challenges the Petroleum Industry Bill (PIB) is intended to solve

The TUC President, Mr Quadri Olaleye and the Secretary General, Mr Musa-Lawal Ozigi, said the country could not afford to continue toying with the oil and gas sector as it remains the only major source of foreign exchange.

“The labour chiefs are surprised, dismayed and irritated by the conspiracy to waste another opportunity to fix the sector, noting that from the lawmakers’ position and body language, one could infer they are serving the interest of some few individuals to the detriment of the over 97 per cent of the country’s population but the congress will not allow that to happen.

“The labour leaders urge the lawmakers to rise up and provide true leadership instead of serving the interest of few capitalists. It is high time ‘these principalities and powers’ removed their knees from the neck of Nigeria and Nigerians," TUC said in a statement jointly issued.

 

Reacting, the leadership of PENGASSAN and NUPENG, which appreciated the National Assembly for the passage of the PIB to unlock the fortune of oil and gas industry, called for removal of the clause restricting importation license to few operators.

"As we intensify effort to make our refinery work, we should ensure that the PIB does not monopolies the importation of PMS as currently provided in the senate version of the bill. This is to ensure that there is competition in the downstream oil and gas industry. 

"Leaving this national security issues to few individuals will shortchange the larger Nigerian populace. We should avoid running from one ugly scenario to an uglier situation that is avoidable," the NUPENGASSAN said in a statement jointly issued by Mr Lumumba  Okugbawa  (PENGASSAN General Secretary), Mr Festus Osifo, (PENGASSAN President), Mr Olawale Afolabi, (NUPENG General Secretary) and Mr Williams Akporeha (NUPENG National President).

According to the group, inclusion of PENGASSAN and NUPENG on the board of the industry regulator(s) is crucial for the attainment of one of the key objectives of this bill, which is to ensure accountability and transparency in the industry. 

"All Civil societies and labour strongly clamored for the inclusion of the two Unions in the sector to be on the board of the regulators for reasons of global best practice currently being practiced in most climes. 

"The needs and justifications for this are many and enormous as it will also ensure that the regulators are further strengthened in ensuring that issues bordering on the welfare of workers would have been championed from the cradle of the bill," the NUPENGASSAN said.

The union also advocated for a single regulator in the best interest of the industry and the nation at large, saying that it would serve as a one-stop-shop for current and aspiring investors.

According to the statement, the NUPENG and PENGASSAN are hoping that the grey areas, especially monopoly to be granted to few refiners, should be addressed by both houses of the Assembly before the Bill is sent to President Muhammad Buhari for assent.

The oil workers believe that if the grey areas are not addressed now before the Presidential assent to the Bill, it would hinder the full potential of the bill.

The workers said that the clause remained one of the major drawbacks of passed bill.

Speaking on the condition of anonymity, a respected industry player said that unless the clause is removed, there may not be a level playing field in the industry. 

“As price control is being removed, supply must be competitive, inclusive, transparent and seen to encourage efficiency,” he stated. 

On their part, the oil marketers said that any provision that did not guarantee a free and open market would give room to price inefficiencies and eventually kill off small businesses in the downstream sector.

The marketers said that allowing imports by major players across the supply chain would protect consumers by ensuring that local pump prices were not higher than regional or international prices.

“MOMAN and DAPPMAN remain committed to the sustainability and institutionalisation of a viable downstream petroleum industry for the social and economic growth of Nigeria," the marketers said.

The PIB and Nigerian Downstream: Crisis looms

The PIB and Nigerian Downstream: Crisis looms

By Jerry Lazarus, Public Affairs analyst

I finally had an opportunity to go through the senate and house committee reports on the PIB. 

The main thrust of the bill is to open up the Nigeria oil and gas industry to investment, strengthen industry governance and regulation to expand, grow and maximize value capture for Nigeria and her citizens.

This is long overdue and we must commend the Executive and the National assembly for prioritizing this bill.

I however, have some concerns about certain provisions of the bill as it affects the downstream. 

While the bill removed price controls on petroleum products in section 205, the senate version of the bill has a clause that constrains market competition by restricting importation of products to only players with local refining capacity. 

This clearly counters the provision of 205(1).

“Subject to the provisions of this Section, from the effective date, wholesale and retail prices of petroleum products shall be based on unrestricted free market pricing conditions.”

The inserted section 317(8) in the senate bill are here re-produced:

(1) The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining. 

(2) To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. 

(3) Import volume to be allocated between participants based on their respective production in the preceding quarter. 

(4) Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme.

(5) To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February, 2020 on adoption of the Afri-Fuels Roadmap.

I think the provisions above will create a duopoly in a price deregulated price environment thereby destroying the Nigerian downstream industry as we know it today. 

It limits importation of all petroleum products, including PMS, diesel, aviation fuel, lubricants, base oil – products which are already deregulated, to only players with local refining capacity. In the near term, only NNPC and Dangote will have domestic refining capacity for PMS for instance, so they will be the only importers. This takes the industry back and could not have been the intention of the bill.

Moving from a state-owned monopoly in a price regulated market to a duopoly in a price deregulated market is taking the industry backward and exposing Nigerians to exploitation and further hardship. This in my humble view is not reformatory.

Rather than seek to protect refiners, we should rather seek to protect the consumers by liberalizing and expanding supply sources. That is the only way prices will be “market determined” and consumers pay fair value for the products they buy. 

The viability of local refining is not determined or enhanced by locking out competition, it is rather achieved by price deregulation which has been done in section 205.

This clause gives statutory unfair advantage to private players rather than through market competition. Indeed, the law and the authorities have an obligation rather to protect the market (other players including Nigerian entrepreneurs) and the consumers rather than to encourage monopoly/duopoly by locking out competition.

This clause does not create a level playing field for all players in the sector, and can indeed destroy existing Nigerian businesses that engage in importation of other petroleum products like diesel, Aviation fuel etc with attendant loss of jobs and more economic misery for Nigeria and Nigerians.

Governments all over the world do not create and encourage monopolies or duopolies and that is why anti-trust laws are enacted and enforced to protect industries and consumers. 

Nigeria should not be doing the reverse. A case can always be made about protectionist policies for nascent or pioneer industries, but this is not the case with a long established, once-thriving Nigerian downstream. 

This clause needs to be expunged from the PIB. 

The Authority should be left to develop regulations that are fair, inclusive and transparent for petroleum product importation that ensures open and diverse market supply and hence competition, only then would the objectives of the bill be achieved.

 It is worth repeating that as price control is being removed, supply must be competitive, inclusive, transparent and seen to encourage efficiency. Then, and only then will Nigerians and Nigerians win.