Nigeria's NNPC takes over 133 stations

In a bid to end the perennial artificial fuel scarcity in the country, the Nigerian National Petroleum Corporation, NNPC, said that it has concluded arrangements with some Independent Marketers to take over their filling stations in order to sustain steady fuel supply.
Group Managing Director of the Corporation, Dr Mohammed Barkindo, who gave the hint during a two-day consultative meeting between the Federal Government and labour leaders on deregulation at the Labour House, Abuja, stated that the NNPC has already taken over 133 filling stations from independent marketers who are willing to partner with the Corporation.

Meantime, the Federal Government has announced the commencement of the issuance of licences to interested operators and investors in the nation's oil and gas sector.
The move by the NNPC is also seen as part of plan to fully transform the Corporation into a commercial company in line with the reforms recommended by Petroleum Industry Bill, PIB.

Barkindo noted that the arrangement would expand the mega and floating stations across the country which now stand at 37 and 12 respectively.
"In all developing countries, their national oil companies operate across the supply chain, including the strategic downstream sector and it is not only seen from commercial perspective but also from national security implications. You cannot hand over that sector to a group of people, private individuals, whose political coloration you cannot predict; cannot predict the decision they may take and the implication of such decision," he said.

The NNPC GMD maintained that the move was informed by the determination of the corporation to break the monopoly of the marketers who play key roles in the supply chain.
According to him, "Today, it only needs a text message round the marketing companies that simply says, stop loading in Mosimi for one day and you will see the multiplier effects across the country, from Sokoto to Maiduguri. If they don't load for one day, you will see queues across the country. Why? They have the monopoly over the supply chain. About 15,000 stations in the country are not owned by the NNPC nor are they owned by the Product and Pipeline Marketing Company (PPMC). They are owned by these marketing companies. Once we sell products from the depot, they take over in terms of where they will supply the products."

Barkindo further averred that the corporation was empowered to regulate the operations in the petroleum sector within a commercial framework but got its function wrong when it evolved as an appendage of Government therefore functioning as a civil service outfit.
He attributed the inability of the refineries to distribute petroleum products to the incessant vandalization of pipelines, noting that the non-functional refineries have been a drain on resources as their workers and other logistics are kept and serviced without any work and added value to the system. In his address, the president of the Nigerian Labour Congress, Abdulwaheed Omar observed that the meeting was an avenue for dialogue with Government saying that the National Executive Council of the NLC would meet soon to deliberate over the contentious issue.

Licence for 2 refineries
And speaking at the third quarterly briefing of the Department of Petroleum Resources, DPR, in Lagos, the Director, Mr Billy Agha said that the Federal Government has issued licence to Anexion Petroleum to build a refinery while Authority to Construct (ATC) has been awarded to Amakpe refinery.
According to him, about five applications are currently being processed by the DPR, for which licences will soon be issued. He noted that none of the previous licences issued could actually take off as the applicants were not having genuine intentions to invest, rather some of them thought with the availability of a license they would be able to lift crude oil for refining purpose which they could then use as they desire.

Agha who was recently confirmed as the Director of Petroleum Resources after several months in acting capacity stated that the Federal Government is not happy with products importation and its taking this step as a way of increasing local refining capacity. The Director also used the opportunity to seek support for the full deregulation of the downstream sector.
According to him: "The billions of naira being expended on the subsidy of petrol could be channelled into other sectors of the economy which are currently begging for attention. Aside from this, the subsidy is being funded from the excess crude account and that is not very good for our economy," he said.

He added that DPR will continue to seek the cooperation and partnership of all stakeholders in the value chain of petroleum product imports, storage and distribution together with the Nigerian people and press, as their contribution to the success of deregulation of the sector cannot be overemphasised.
"All operators and retail outlets are to be captured in DPR database through Geographic Positioning System (GPS) by Q1 2010for effective monitoring. DPR will take the lead in bulk certification of petroleum products through our well-equipped laboratories nationwide. Agency will propose acceptable and effective technology for pump seal/lock, and automatic volume count mechanism to check sharp practices and appropriately review all existing sanctions and penalties for infringement on provisions of regulations by operators Capacity building and material resources will be enhanced to meet anticipated challenges. Any retail outlet found to be hoarding will be sanctioned by auctioning of product and dealer fined twice the amount of product."

Meanwhile, the director also declared that the total estimated gas production for the 3rd quarter of this year was 534.297 bn cf.
A total of 329.015 bn cf or 66.52 % of the total gas produced was utilized while the remaining 204.37 bn cf representing 33.48 % or an average of 0.063 x 109 cmpd (2.221 x 109 cfpd) was flared.