threat to national security

By Abubakar Yunus Abuja

Vice-President Yemi Osinbajo says oil theft and sabotage of oil assets pose a “clear and present danger” to the economy and national security.

Osinbajo spoke in Abuja at a stakeholders conference on oil theft and losses in Nigeria.

He said the acts also have a negative effect on the revenue accrued to the federation and the business opportunities for oil and gas investors.

“All theft and sabotage of oil and gas assets are a clear and present danger to our economy and national security,” he said.

“Not only do they pose a serious threat to all exploration and our energy economy, they also impact negatively on what is accrued to the federation and the business prospects on investors in the oil and gas sector.”

If left unchecked, Osinbajo said, the menace will fuel crises that will paralyse the government and leave the country extremely vulnerable to shocks and other unexpected consequences.

He added that large-scale theft of crude oil undermines government efforts to optimise its intended vision.

“Nigerian Extractive Industry Transparency Initiative (NEITI) put the audited figure of oil theft and losses at something in the order of 619.7 million barrels of crude oil daily,” he said.

“And this is valued at $46 billion or N16.25 trillion; and all of these losses occurred between 2010 and 2020.

“In addition, Nigeria lost about 4.2 billion litres of petroleum products from refineries, which were valued at over $1.4 billion at the rate of 140,000 barrels per day from 2009 to 2018.

“This is just an average, because there are peaks where we see losses between 200,000 to 400,000 barrels in a day.

“As part of our strategy for value optimization and increased production from our national oil and gas reserves, the commission has focused on regulatory initiative aimed at reviving declining wells through enhanced oil recovery approach,” he said.

Komolafe added that the commission is working with operators to identify candidate wells and appropriate interventions that would lead to increased production.

“In addition, the commission is focusing on shut-in wells which can be revived. In pursuance of this, the commission inaugurated a committee on June 23, 2022, to conduct industry-wide study on reactivation of shut-in strings,” he said.

“The committee has submitted its report, and includes recommendations categorised into ‘quick wins’, medium- and long-term initiatives that will enhance national oil and gas production volumes.”

The NUPRC boss said findings from the report revealed that “over 900,000 barrels of oil per day can be earned from the quick win interventions while the medium- and long-term initiatives could potentially add 1.2 million barrels of oil per day if properly and fully implemented”.

He said the total number of strings that need to be revived is also known and “we have commenced engagement with the relevant operators to operationalise the initiative”.

“We have also completed the 2020 marginal field bid round and issued fifty (50) petroleum prospecting licenses (PPLs) to deserving awardees. It is expected that with the existing discoveries in the awarded fields, early field development plan (FDP) would be pursued by the awardees leading to incremental oil and gas production,” Komolafe said.

“On its part, the commission is facilitating timely approvals for expedited re-entry and early production.

“The estimated incremental production from the awarded fields is approximately 58,000 bpd and 87mmscf/d.

“In the short/medium term, we expect an estimated incremental volume of 461,000bpd and 565mmscf/d from new wells and well reentry.

“In the long term, we expect an estimated incremental volume of 162,000bpd and 868mmscf/d from FDPs which have been approved and are at various stages of execution.”

Report: CBN in talks with R3, US-based firm, for tech revamp of eNaira

By Abubakar Yunus Abuja

The Central Bank of Nigeria (CBN) is in talks with potential technology partners to develop a new system to run and manage the eNaira, Bloomberg is reporting.

The newspaper cited two sources familiar with the matter who asked not to be named due to confidentiality issues.

The sources said that the apex bank had discussed the plans

— which are in the early stages —with R3, a New York-based technology firm.

They said the new software for the eNaira would be created to allow the CBN to have full control of the effort.

In 2021, the CBN engaged Bitt Inc, a global fintech company, as its technical partner for the digital currency, eNaira.

When it was rolled out in October 2021, Nigeria became the first country in Africa to launch its own central bank digital currency.

The sources told Bloomberg that the new technology partner, whether R3 or another company, would not be expected to take over Bitt Inc’s job immediately, but would work with CBN to achieve their long-term objective “to control the underlying technology.”

Commenting on the development, Bitt said that it is cognizant of the fact that the

CBN collaborates with a variety of partners on its technical advancements.

The company further explained that it is working closely with the apex bank in developing “additional features and enhancements” for the eNaira system.

Recently, the CBN asked Nigerians to embrace eNaira and internet banking as alternatives to cash transactions.

PenCom: Contributory pension scheme reforms have eased challenges faced by employees

By Abubakar Yunus Abuja

The National Pension Commission (PenCom) says reforms under the contributory pension scheme (CPS) have eased challenges encountered by employees.

The commission said this recently in a video message to Nigerians.

The contributory pension scheme (CPS) is an arrangement where both the employer and the employee contribute towards the payment of the worker’s pension at retirement.

In a bid to improve the sector, PenCom said it has implemented several reforms including the recovery of over N10 billion outstanding pension contribution, and the payment of outstanding pension liabilities.

The commission recently approved the increase of monthly pensions for retirees on “programmed withdrawal” under the CPS.

“The online enrollment and verification exercise, multi-fund structure, non-interest fund, retirement savings account transfer system, and data recapture exercise have eased all the challenges that contributors experience,” it said.

PenCom said it has also ensured that all pension fund administrators (PFAs) increase their share capital to at least N5 billion.

“As we speak, the total pension assets in the country has amounted to over N14 trillion and PenCom has launched the new edition of pension enhancement for retirees on programme withdrawal under the contributory pension scheme,” the commission said.

“The most exciting benefit is that [it is] not only public and civil servants will be enjoying pension in our country; private sector, traders, tailors, fashion designers, shoemakers, civil societies — almost all citizens — can enrol in the pension scheme under the micro pension plan.

“This means that everyone can begin to plan for their lives and in the future, and the national security problem will end in our country.”

PenCom further lauded the federal government for revamping the pension scheme, enjoining Nigerians to make wise use of them.

FAAC accuses NNPC of using lower FX rate for crude oil revenue

By Abubakar Yunus Abuja

The Federation Account Allocation Committee

(FAAC) has accused the Nigerian National Petroleum Company (NNPC) of using an exchange rate lower than the Central Bank of Nigeria (CBN) official rate for the sale of domestic crude oil between 2015 and 2022.

The committee said this in a report signed by Kabir. M. Mashi, chairman of its post mortem subcommittee (PSMC).

The report was presented the sub-committee at FAAC’s monthly plenary meeting held on Tuesday, January 17, 2023.

The FAAC sub-committee said it observed some underpayments of N185.45 billion to the federation account as a result of the low exchange rate applied by the NNPC.

“On the exchange rate application by NNPC on domestic crude, FIRS PSC crude and NUPRC royalty crude sale values, the sub-committee observed some under payments of N185,458,842,270.76 to the federation account as a result of NNPC using exchange rate lower than the CBN official rate on domestic crude sale for the period 2015 to 2022,” the report reads.

FAAC also said the CBN has confirmed that “NNPC did not use the rate advised” by the bank.

It added that the national oil firm has not yet responded to the matter after “several months of being given the analysis to review”.

“Despite the concerns of FIRS, NUPRC and other stakeholders, NNPC Limited has continued to use a different exchange rate in remittances to the federation account till date,” the committee.

Consequently, the FAAC subcommittee recommended that the plenary should take a decision on the appropriate exchange rate to be used by NNPC Limited on remittances to the federation account going forward to avoid underpayments to the federation account.

It also said the plenary should engage a third party forensic auditor to validate the established underpayments to the federation account by NNPC.

Meanwhile, in a related development, the FAAC subcommittee said it also observed that within the post-mandated period, the issue of nonapplication of mandated rates by CBN for the months of March, April, and May 2020 resulted in the underpayment to the forex equalisation account by N67. 1 billion.

The sub-committee said it had earlier submitted its report to FAAC and awaits its investigation with CBN to ascertain why mandated rates were not used in the months under reference.