- No cause for alarm, we have 1.3bn litres in reserves, says Baru
Barely four months after the federal
government adjusted the pump price of petrol upwards from N86.50 to N145
per litre to stabilise product importation and distribution, oil
traders have raised concern over likely scarcity of the product.
The fear expressed by the marketers
stemmed from the alleged inability of the Nigerian National Petroleum
Corporation (NNPC) to supply crude to some oil traders and refineries in
exchange for refined products, under the Direct Sales-Direct Purchase
(DSDP) contractual arrangements initiated with some selected oil traders
and foreign refineries some months ago.
The marketers were also alarmed by the
increasing challenges facing them in accessing foreign exchange, and
threatened that they might abandon petrol importation in the hands of
only the NNPC, potentially plunging the country into another energy
crisis.
They warned that the pegging of the pump
price at N145 was based on N285 exchange rate and that the depreciation
of the Naira in the inter-bank market to an average of N315 has created
a huge gap left to be filled. Warning that it was not feasible for the
price to remain at N145 with the current FX reality.
But the Group Managing Director of NNPC,
Dr. Maikanti Baru has dismissed the fear of possible scarcity, saying
that the corporation has continued to meet its obligations to marketers
and foreign refineries in the areas of foreign exchange allocation and
supply of crude oil under its DSDP contracts with the oil traders.
While the marketers alleged that the
corporation has defaulted in the supply of crude oil to the foreign
refineries, Baru dismissed this claim, revealing that NNPC currently
accounts for 90 per cent of petrol imported into the country and has 1.3
billion litres of petrol in reserves “and is not about to let the
country go through another crisis of scarcity”.
Following the controversy, which trailed
the NNPC’s Offshore Processing Arrangement (OPA, the corporation had
adopted the DSDP framework under which it provides crude to selected
traders and refineries in return for petroleum products in full and
extra margins, unlike the OPA.
DSDP also eliminates all the cost
elements of middlemen and gives NNPC the latitude to take control of
sales and purchase of crude oil transaction with its partners.
But sources close to the marketers told
THISDAY that the corporation had defaulted in the supply of crude oil to
the foreign refineries, thus threatening the steady supply of petroleum
products in the country.
According to them, lack of crude oil due
to the attacks on oil facilities in the Niger Delta, has hampered the
corporation’s ability to meet its contractual obligations under the
DSDP.
THISDAY gathered from the marketers that
since the programme started, the NNPC had not been able to supply crude
oil to the oil traders.
“The militants stopped almost all the
onshore production and because of this, NNPC has no crude to supply to
the traders. The oil traders supplied petrol initially but stopped when
the NNPC was not bringing crude. The traders had to stop because they
did not want a repeat of the 2008/2009 crisis when they were indebted to
the tune of over $3 billion due to NNPC’s inability to meet
obligations. Fresh crisis is looming,” one of the sources told THISDAY.
THISDAY gathered that having lost over 70 per cent onshore and shallow water production to militant attacks, the NNPC can no longer access the 445,000 barrels per day allocation to the refineries, which is used to service the corporation’s DSDP agreement.
THISDAY gathered that having lost over 70 per cent onshore and shallow water production to militant attacks, the NNPC can no longer access the 445,000 barrels per day allocation to the refineries, which is used to service the corporation’s DSDP agreement.
With the loss of production from the
traditional terrains, the country’s oil revenue is currently derived
solely from deep offshore production where the NNPC has Production
Sharing Contracts (PSCs) arrangement with some international oil
companies (IOCs).
The deep offshore fields sustaining
Nigeria’s crude oil production include: Shell’s 225,000 barrels per day
capacity Bonga field; Chevron’s 250,000 barrels per day capacity Agbami
field; Total’s 185,000 bpd Akpo and 180,000 bpd Usan deepwater fields;
as well as ExxonMobil’s 190,000 barrels per day Erha field.
THISDAY also gathered that Total’s
200,000 bpd Egina deepwater field being developed at the cost of $16
billion will start production in 2017 after the $3.3 billion Floating
Production Storage Offloading (FPSO) vessel arrives the country in March
or April 2017.
However, some of the five producing fields have not attained their nameplate production capacity.
Baru however told THISDAY in a telephone chat yesterday that there was no looming scarcity.
Baru however told THISDAY in a telephone chat yesterday that there was no looming scarcity.
On the issue of alleged non-supply of
crude to the traders, Baru said “at the moment, we have been giving them
and I have also done a tender as a backup in case I have any issue.”
“So, there is no cause for alarm,” he added.
“So, there is no cause for alarm,” he added.
Also speaking on the foreign exchange
challenges, Baru stated that NNPC has been assisting some of the
marketers with proven financial capacity to pay for foreign exchange
provided by International Oil Companies (IOCs).
“The criteria is important because we
could give some of them the foreign exchange, but they may not have the
capacity to pay for it. We checked with their banks to confirm that they
have the financial capacity because we don’t want a situation where we
give them the forex and its diverted or they can’t pay for it. So we
carry out a thorough evaluation. We have NNPC, Central Bank and also
PPPRA representatives on the committee that evaluates them on the basis
of capacity to perform.
“And once we are satisfied on that
basis, we now give them forex. To say there is no forex, I don’t think
it is correct. At the moment as I am talking to you, I have over 1.3
billion litres and that is more than enough for this September. We have
sufficient quantities and not in any scarcity. And we also have direct
sales, direct purchase where I give them crude oil and they bring in
petrol for me or any product that I choose to bring in,” Baru explained.
But some marketers who faulted Baru’s
claim, alleged that the challenges of accessing foreign exchange has
also hampered their ability to import petrol, thus threatening product
availability.
0 comments:
Post a Comment