NNPC Weekly: NNPC Ltd. intensifies efforts to address Africa’s energy poverty

The Nigerian National Petroleum Company Limited (NNPC Ltd.) started its activities for the new week with a call on stakeholders to intensify efforts to address abject energy poverty in Africa.

The GMD/CEO of NNPC, Malam Mele Kyari, made the call at the 2022 Africa Infrastructure Solutions Summit which recently held in Abuja.

At a panel session on Energy Transition at the summit organised by the Africa Finance Corporation (AFC) with the theme: Africa’s Energy Conundrum: A Pragmatic Approach to Net Zero, Kyari joined other energy experts to advocate for a practical approach to energy transition to guarantee cheap access to energy in Africa.

According to him, there should be a slow but proper energy transition process in Africa with emphasis on access rather than net zero status.

He called on developing countries to form a common front to address the irrational expectations of transiting to net zero, adding that African leaders must insist that there must be energy justice.

He said NNPC was at the forefront of efforts by Nigeria to rally the needed support and cooperation among African countries to promote gas sufficiency in order to eliminate energy poverty.

Kyari also canvassed for the integration of Africa’s infrastructure in the region.

The Session was moderated by AFC’s Executive Director for Financial Services, Mr Sanjeev Gupta.

Other panelists in the session include, Prof. Carios Lopez of the Mandela School of Public Governance of the University of Cape Town, South Africa, and Mr Temitope Shonubi, Executive Director, Sahara Group.

According to the panelists, there is need for African countries to reduce their dependence on foreign funds for projects and start looking inwards for financing.

For Shonubi, he spoke on the need for effective communication strategy during the campaigns with the African populace and the transition process just as he said that poverty needs to be addressed.

Meanwhile, the NNPC Ltd. has reiterated its commitment to ensuring that Nigeria enjoys energy security, especially in the area of petroleum products availability.

The GMD/CEO of NNPC, Malam Mele Kyari made the commitment at an aviation sector stakeholders’ meeting held at the instance of the leadership of the House of Representatives.

The meeting was to find solution to the lingering challenge of astronomical rise in the price of Aviation Turbine Kerosene (ATK) also known as aviation fuel or Jet A1.

It would be recalled that Nigerian airlines under the auspices of the Aviation Operators of Nigeria (AON) had threatened to withdraw their services over what they considered as arbitrary increase in the price of aviation fuel which had created operational difficulties for the airlines.

In a swift move to resolve the crisis, the Speaker of the House of Representatives, Rep. Femi Gbajabiamila, convened a stakeholders’ meeting to x-ray the issues with a view to averting the strike and finding lasting solutions to the challenges bedeviling the sector.

Addressing the gathering, Kyari explained that NNPC was doing everything within its powers to make petroleum products available for the smooth operations of every sector of the economy, including aviation.

According to him, there were lots of factors responsible for prices of petroleum products, stressing that in the case of aviation fuel which had been deregulated since 1999, there was nothing NNPC can do as its price was strictly determined by market forces.

Speaking earlier, the Vice President of Aviation Operators of Nigeria and Chairman of Air Peace, Mr Allen Onyema, highlighted the challenges that airline operators have been facing with aviation fuel marketers in terms of price of the product which he said has since exceeded the global threshold of 40 per cent of operation cost of airlines.

He said the AON could not follow through with the resolution of the last intervention by the House of Reps to apply for a license to import aviation fuel directly.

This he said was because they saw it as a long term solution which would involve huge infrastructural outlay like construction of tank farms and other storage facilities at the airports

On his part, the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, said the CBN was ready to provide financial assistance to the airlines on the condition that they met the credit criteria set by their respective banks.

Rounding off the meeting, the Speaker of the House of Representatives, summed up the resolution and urged the airline operators to cancel the strike altogether, rather than just suspend it.

In the meantime, NNPC GMD/CEO, Kyari assured members of the House of Representatives Ad-hoc Committee on the State of Refineries that the NNPC has nothing to hide.

Kyari gave the assurance at an investigative hearing of the committee into the state of the refineries.

Fielding questions from members of the committee, the GMD who went into the history of the maintenance of the refineries disclosed that the refineries had not been properly maintained over the past 20 to 25 years leading to a situation where they had to be shut down because they were no longer adding value.

On the current stage of the rehabilitation work and the process of awarding the contract, the Group Executive Director, Refineries and Petrochemicals, Mr Mustapha Yakubu, said everything was on track.

Chairman of the Committee, Rep. Ganiyu Johnson, said the leadership of the House of Representatives felt there was need to understand exactly what was happening with the refinery rehabilitation considering how much money was voted for the project.

He requested NNPC to furnish the committee with more documents relating to the surveys carried out on the plant before the rehabilitation contract was awarded and status report on work done and payments made so far.

Johnson stressed that the committee was ready to work with NNPC to come up with legislations that would support its growth.

Managing Directors of Kaduna and Warri Refineries, Mr Babatunde Bakare and Mr Ezekiel Osarolube, were with the GMD at the investigative hearing.

Group General Manager Public Affairs Division, Garba Deen Muhammad; Technical Adviser to the GMD on Refineries, Mr Ibrahim Onoja and the General Manager, External Relations, Mrs Iyabode-Ayobami Ojo, were also at the hearing.

Meanwhile, the GMD has assured that the queues at fuel stations in Abuja would soon clear with the measures put in place to ensure robust supply of petrol to the city.

Kyari said the queues were not as a result of scarcity of petrol as NNPC currently had enough fuel in the country to last 47 days even if no product was imported in the intervening period.

Still in the week under review, the Federal Government said the country would continue to partner with stakeholders to improve the West African Gas Pipeline (WAGP) Project.

This was disclosed by the Minister of State for Petroleum Resources, Chief Timipre Sylva, at the meeting of the Committee of Ministers of the West African Gas Pipeline Authority (WAGPA) project which held in Abuja.

WAGPA is an international institution established by the treaty on the West African Gas Pipeline (WAGP) Project signed by the Heads of States of Benin, Ghana, Nigeria Togo.

Sylva said the Nigerian government had over the years shown leadership in ensuring that WAGPA was properly positioned to guarantee the achievement of its objectives.

The minister described the meeting as a commitment to the success of the project – a true proof of economic integration and cooperation in the sub-region.

According to him, the meeting is holding at a very critical time when the socio-political landscape is changing due to the Russian-Ukrainian war that has put pressure on global gas demand across Europe.

He listed some of the achievements of the WAPGA Committee to include, Open Access which was implemented in 2012; Improved Gas Availability; the Takoradi-Tema Interconnection Project (TTIP), which had significantly increased gas flow through the WAGP.

Other achievements were lifting of Force Majeure by the Nigeria Gas Company (NGC) between June 2013 and October 2020, Reforms of the Access Code to the WAGP network code; and the ongoing amendment to the WAGP Act and the WAGP Regulations.

He said the amendment of the WAGP Act and the WAGP Regulations would ultimately give licensing power to WAGPA to oversee the activities of the shippers as related to the WAGP for a free and fair business environment.

“However, there are more to achieve and we are determined to get to the zenith of our targets, which are to deepen gas supplies and utilisation within the ECOWAS sub-region.

“The global community has classified gas as part of renewable energy.

“Since we cannot but join the global energy transition train we must hurry to exploit the abundant natural gas deposits within the borders of our respective countries.”

On the institutional level, he said the meeting was a follow-up on the extraordinary meeting of the committee held in Accra, Ghana on Nov. 16, 2021, to consider issues related to the appointment of the director-general of WAGPA.

He said the solution that emerged from its discussions in Accra, in November 2021 to move ahead with the appointment of a Nigerian as director-general for WAGPA was very critical.

“In the circumstances, therefore, I will seek the understanding and cooperation of all to be guided by the provisions of the AGPA Treaty in reaching a sustainable, profitable and fair decision on this matter,” he said.

Furthermore, he appreciated the effort of its partner, the West African Gas Company Ltd. (WAPCo), as operator of the pipeline to implement the International Project Agreement and assure transportation of natural gas from entry points to customers in the state parties.

He said the ECOWAS commission had initiated the West African Gas Pipeline Expansion Project (WAGPEP) and was currently working with the Nigeria-Morocco Gas Pipeline (NMGP) Project for possible synergy between the two projects.

“I also know that WAPCo and WAGPA are working closely with the entities to provide technical assistance and experience to achieve the synergy to increase the potential to deliver natural gas for more countries in the ECOWAS sub-region and beyond,” he said.