PPPRA Increases Fuel Importers to over 40 Firms

100412T.Diezani-Alison-Madueke

As part of measures to avoid fuel crisis following the failure of many Oil Marketing and Trading (OM&T) companies to access credit facilities from banks to import petrol, the Petroleum Products Pricing Regulatory Agency (PPPRA) has expanded the list of importers to over 40 companies for the third quarter 2013 import allocations. About 30 oil companies were previously accredited for the exercise in the second quarter.

The list of the importers for the third quarter includes Oando Plc, which won the biggest allocation of 135,000 tonnes, while Total Nigeria Plc and Folawiyo Oil and Gas won 90,000 tonnes each.

The announcement of the import allocations for the third quarter coincided with the disclosure by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, Tuesday that Nigeria’s crude oil production now averages about 2.30 million barrels per day (mbpd) despite an increase in illegal oil bunkering and crude oil theft.

Before the Executive Secretary of PPPRA, Mr. Reginald Stanley, came on board in November 2011, the business of fuel importation into the country was an all-comers’ affair, resulting in manipulations and malpractices that swelled subsidy claims to about N2 trillion, which was considered by the federal government as unsustainable.

A total of 128 companies were engaged in fuel importation in the old regime thus providing an opportunity for the abuse of the system.
However, in the first import permit handled by Stanley in the first quarter of 2012, the number of participating companies was reduced from 128 to 42, before it was further reduced to 39 in the third quarter of 2012 and beyond.

The volume of imported products also dropped from 5.036 billion litres in the first quarter of 2012 to 4.20 billion litres in the third quarter.
But due to growing concerns that the inability of these accredited importers to access credits from the banks could fuel another crisis in the system, the PPPRA has expanded the list for the third quarter 2013 to over 40 participating companies.

Efforts yesterday to get the official position of the PPPRA on the matter were not successful but a source within the agency told THISDAY that the list was slightly expanded because of the failure of some of the previous participants to exhaust their allocations.
“The approved list was amended to include more firms because some of the previous suppliers failed to perform due to difficulty in accessing credits. The Central Bank of Nigeria (CBN) had directed the banks against granting credits to these importers. That is why more companies were brought in to avoid fuel crisis,” he said.

The list compiled by Reuters using information from five sources showed that about 3.4 million tonnes of petroleum products were allocated for the third quarter to more than 40 companies.
The successful companies for the third quarter of 2013 were firms that were given a clean bill of health in the various subsidy probes conducted last year.

Some of the successful companies include Oando Plc, Folawiyo Oil and Gas, Total Nigeria Plc, Masters Energy Oil and Gas Limited, Techno Oil Limited, MRS Oil and Gas Limited, Nepal Energy, Fresh Synergy, Matrix Energy and Ibafon.
The Federal Ministry of Finance had previously said even companies indicted in the subsidy probes would not be delisted so long as they paid back money owed to the federal government.

The ministry would, however, not comment on specific companies but showed Reuters a document that showed that N14 billion or about six per cent of the N232 billion fraudulently paid to the importers had so far been recovered from some of the indicted firms.
However, at a media briefing yesterday in Abuja on the activities of her ministry in the last two years of the Jonathan administration, the minister of petroleum resources said oil production now averages about 2.30mbpd despite an increase in illegal oil bunkering and crude oil theft.

Alison-Madueke also said the country’s crude oil reserve base as at the end of 2012 stood at 36.8 billion barrels while its total gas reserves by then was at 182 trillion cubic feet (Tcf).
The crude oil reserve figures, she added, represents about 0.06 per cent decrease as compared to the 2011 yearend figures as well as a 0.01 per cent drop in gas reserve as compared to the 2011 yearend.

The minister explained that sustaining crude oil production at these levels is being challenged by increasing pipeline vandalism and crude theft, which intermittently results in production falling below the programmed 2.46mbpd and rebounding following government intervention to stem the menace.

She noted that the government is tackling the problem of crude oil theft through proactive enforcement and the crude oil fingerprinting initiative, as well as efforts by President Goodluck Jonathan to co-opt his colleagues from other countries of the world to discourage consumption of stolen crude oil from Nigeria.

According to her, the period under review also witnessed some significant upstream activities that helped the improvement of overall industry performance.

She listed projects such as the Usan Floating Production Storage and Offloading (FPSO) and the new deep offshore Production Sharing Contract (PSC) field, which is currently producing at about 103,000 bpd, as part of the events that have led to improvement in the sector.

She added that the next major project in Nigeria’s deep water is Egina project, which has been awarded and is expected to cost about $15 billion and add 180,000 bpd to the country’s production capacity.
The minister said: “A total of 19 exploration wells were drilled comprising eight exploration wells in the JV and 11 wells (three exploration and eight appraisal wells) under the PSC. 93 development wells were drilled comprising 55 development wells under JV while the PSC delivered 38 development wells.

“Within the same year, 33 work-over wells were also drilled consisting of 32 work-over wells under JV and one work-over well in PSC. Nigeria has nine basins of which the most prospective is the Niger Delta. Others such as Anambra and Chad basins are also known to be rich in hydrocarbon. Presently, exploration has been stepped-up in the entire inland basins of Chad, Anambra, Benue, and Bida/Sokoto/Dahomey.”

Providing figures on crude oil and gas reserves of the country, Alison-Madueke said: “As at end of year 2012, the crude oil reserve base stood at 36.8 billion barrels; representing 0.06% decrease as compared to year end 2011 figures. Gas reserves at end of year 2012 was 182Tcf representing a 0.01% drop as compared to year end 2011 figures.
“In line with government’s strategy of growing NPDC through asset transfer, NPDC’s reserve base has grown to 1.7 billion barrels through strategic divestment initiatives.

“Crude oil production (including condensate) has been consistently maintained above an average of 2.30 million barrels per day (MBOPD) despite illegal oil bunkering, crude oil theft and pipeline vandalism. Following the federal government’s amnesty programme, Nigeria’s production rose from an average of 1.9 mmbopd in 2009 to a peak of 2.62 mmbopd in October 2010.

“Sustaining production at these levels continues to be challenged by increasing pipeline vandalism and crude theft, which intermittently results in production falling below the programmed 2.46 mmbopd and rebounding following government intervention to stem this menace. The government is tackling this problem through enforcement and the crude oil fingerprinting initiative.”

As part of improving accountability with regards to Nigeria’s oil production, Alison-Madueke stated that the ministry had concluded a pilot scheme for real time crude oil production monitoring, adding that the programme, which is referred to as National Production Monitoring System (NPMS), is a remote monitoring system emplaced not only to monitor real time production, but also other field parameters needed for effective reservoir management and administration.

When asked to explain reasons for the seeming lull in investment in Nigeria’s downstream petroleum sector and by extension the lack of privately funded refineries, the minister said: “We cannot eat our cake and have it back; we cannot have investment in the downstream sector when there is the subsidy regime. We need to deregulate the sector because we cannot eat our cake and have it back.”

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2 comments on “PPPRA Increases Fuel Importers to over 40 Firms
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