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Nigeria to grow oil reserve to 40bn barrels —-targets four million barrel production capacity per day

 Eyewitness reporter

Nigeria has resolved to grow the country’s oil reserve to 40 billion barrels of crude oil while hoping to scale up its daily production capacity to four million barrels.

President Muhammadu Buhari, who stated this at the opening of the 4th edition of the Nigeria International Petroleum Summit (NIPS) in Abuja, reiterated the government’s determination to build up the nation’s crude oil reserves in few years to come.

Buhari, represented by Minister of State for Petroleum Resources, Chief Timipre Sylva, said the FG intends to achieve the crude oil reserve growth through the marginal oilfields commissioned by the NNPC.

The President said the buildup would be achieved notwithstanding that Nigeria now produces 1.7million barrels per day in compliance with the Organisation of the Petroleum Exporting Countries (OPEC) Plus production quota.

“My administration has demonstrated commitment to overhaul the oil and gas industry.

“The ambitious goal of ramping up crude oil production to at least 4.0 million barrels per day and building a reserve of 40 billion barrels remains sacrosanct and guiding principle to our overall outlook for the industry.

“Creating a conducive business environment for hydrocarbon industry to thrive is no longer a choice; it is a necessity.”

According to him, the theme of the summit “From Crisis To Opportunities – New Approaches to the Future of Hydrocarbon”, reflects the need to adopt new approaches to the future of hydrocarbons by redefining objectives and providing the pathway for rediscovery.

He said governments across the world were now more focused on managing the COVID-19 pandemic and its impact on economies than the quest for the energy transition.

The President said: “However, energy transition is real, renewable technologies are getting cheaper and investors are increasingly conscious of environmental issues, and are beginning to turn their back on hydrocarbon investments.

“Experts have projected that about 80 percent of the world’s energy mix in 2040 would still come from hydrocarbons.”

The President further noted that Nigeria must address short-term opportunities, using existing technology that can extend the life of mature fields.

President of the Senate, Ahmad Lawan, who was also in attendance said that the National Assembly would pass the much-awaited Petroleum Industry Bill (PIB) before the end of June.

He noted that the ninth National Assembly legislative agenda for 2019-2023 was for it to support the effort of the executive to deliver a PIB that would provide a win-win scenario for Nigeria and investors.

Speaker of the House of Representatives, Femi Gbajiabiamila, OPEC Secretary-General, Dr Mohammed Sanusi Barkindo, the Secretary-General of the Gas Exporting Countries Forum (GECF), His Excellency, Yury Sentyurin, as well as Dr Omar Farouk Ibrahim, Secretary-General of the African Petroleum Producers Organization (APPO), also spoke at the event.

Still on NIPS, the NNPC has disclosed plans to diversify its investment portfolio in a bid to transform into an international Energy Corporation away from a traditional oil and gas company.

The Group Managing Director of the NNPC said that the Corporation was considering a name-change to reflect its plan to diversify into renewables energy and non-oil and gas assets such as healthcare, research, technology, innovation, telecommunication and real estate.

Kyari also said the Corporation was working to maximize the exploration and exploitation of the massive hydrocarbon resources in the country before oil and gas lapse into economic irrelevance like coal.

The GMD asserted that the Nigerian Government was determined to create the right legislations and policies to support investment and growth through the passage of the PIB, stressing that there was a need for urgent exploration campaign as oil production in Sub-Saharan Africa would almost deplete significantly by 2050.

According to Kyari, Nigeria holds about 36.9billion barrels of oil and 203trillion cubic feet of gas reserves, which he said translates to 60 per cent and 78 per cent of the oil and gas reserves respectively in sub-Sahara Africa.

He said Nigeria remains focused on increasing domestic gas supply and utilization to fuel power generation and industries as parts of the Federal Government ‘Decade of Gas’ aspirations.

On emerging opportunities in Africa, Kyari said those relatively less explored countries in West and East Africa present opportunities as the next frontiers of exploration, stressing that new transform margin provinces include Sierra Leone, Ghana, Uganda, Kenya and Mozambique.

He hinted that NNPC would declare dividends for her shareholders when the 2020 Audited Financial Statement is released.

He said the Corporation’s commitment to transparency and accountability has paid off as it has opened doors of financing where others find it difficult to raise loans.

Also in the week, the Nigerian Senate commended the NNPC for its efforts towards entrenching transparency and stamping out corruption from its system.

The commendation was by the Chairman of the Senate Committee on Anti-Corruption and Financial Crimes, Sen. Suleiman Kwari, at a hearing in Abuja to assess the level of implementation of the National Anti-Corruption Strategy by government agencies and parastatals.

Kwari said it was heartwarming that the NNPC was making great strides towards profitability and urged the Corporation to sustain the gains recorded so far for the good of the country.

The NNPC GMD, during his presentation, said the Corporation, as part of its commitment to the war against corruption, has set up processes and structures that would ensure transparency and accountability.

He said the Corporation, in collaboration with security agencies, had reduced the incidences of pipeline vandalism to four percent across the country.

He, however, decried the rise in smuggling of petroleum products, which he said had become a national challenge that must be addressed urgently to stem the huge loss to the nation.

Still in the week under review, the NNPC recorded over 1million euros through the monetisation of its carbon credit in the operation of its Joint Venture partnership with TotalEnergies.

The Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr Bala Wunti, who disclosed this on the sidelines of the recently concluded NIPS in Abuja, spoke on the benefits of a Carbon credit.

Wunti described Carbon credit as a permit that allows a country or organization to produce a certain amount of carbon emissions which can be traded off or converted to cash if the full allowance is not used.

He stated that the positive carbon credit which was converted to more than 1 million euros is an additional revenue inflow that could be replicated in the emerging energy transition scenario.

Wunti explained that the transition to renewables has led to a lack of investments in hydrocarbons by the IOCs which could lead to a shortage of supply in the future if not properly managed.

He also identified the delay in the passage of the Petroleum Industry Bill (PIB), security and high cost of operation as impediments to the competitiveness of Nigeria’s oil and gas industry.

He said the passage of the PIB, improved collaboration among stakeholders in the industry to curb insecurity as well as the reduction of cost of crude oil production to 10 dollars per barrel would make Nigeria a top investment destination.

Also in the week, the NNPC called on the international oil companies operating in Nigeria to invest in the Downstream Sector to boost product availability and sustainable growth in the oil and gas industry.

The Group General Manager, Crude Oil Marketing Division, Billy Okoye, who also spoke on the sidelines of NIPS in Abuja, commended private companies that were currently investing in refineries in the country.

He said the cost optimization programme was central to a successful energy transition as funds would be freed to invest in renewables and gas optimization projects.

On a concluding note, NNPC congratulated the President of the Nigerian Guild of Editors (NGE)), Mr Mustapha Isa, on his re-election as the president of the Guild.

Kyari, in a congratulatory letter, stated that Isa’s re-election did not come to him as a surprise.

He stated that his re-election was a reaffirmation of his integrity, dedication, work ethics and outstanding contributions to the Guild, urging him to take the guild to greater heights in his second tenure.

It will be recalled that Isa was re-elected at the 2021 Biennial Convention of the Guild which held recently in Kano.

At the global market, oil prices rose for a second session on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the United States of America secretary of state said sanctions against Tehran were unlikely to be lifted.

Brent crude futures were up 32 cents, or 0.4 percent at 72.54 dollars per barrel, having earlier touched 72.83 dollars, the highest since May 20, 2019, while the United States of America West Texas Intermediate (WTI) crude futures climbed 31 cents, or 0.4 percent to 70.36 dollars per barrel, after rising to as high as 70.62 dollars, highest since Oct. 17, 2018.

Meanwhile, the Market Intelligence Department of NNPC’s London Office reported that global inventories have continued to draw in spite of recent demand setbacks, notably in India, the world’s third-largest oil importer.

The Organisation of the Petroleum Exporting Countries (OPEC) plus has shown that it remains in control and will return inventories to their pre-COVID-19 baseline.

This maintains the backwardation of the price curve, which is clearly the bloc’s preferred price structure.

Yet some analysts note that stockpiles are still sizable and that speculative pressure in the paper markets has waxed bullish on oil prices, somehow deepening backwardation in spite of evidence of a large and resilient supply surplus.

Once the current round of tapering finishes in late July, producers will still be keeping about 5.8 million barrels per day of production offline, according to Energy Intelligence balances.

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Breaking: Tinubu sacks Emefiele as CBN Governor, appoints Cardoso, four other deputies

Dr. Olayemi Cardoso, New CBN Governor
The Eyewitness Reporter
The Federal government has finally decided the fate of the suspended governor of the Central Bank of Nigeria (CBN), Godwin Emefiele as President Bola Ahmed Tinubu has appointed Dr. Olayemi Cardoso as the substantive CBN governor.
Emefiele, who was suspended in June, has been charged to court, and since then, he is still being held by the Department of State Service (DSS).
However, in a statement signed by the President’s Special Adviser on Media and Publicity, Ajuri Ngelale, Friday,  the nomination of Cardozo with four other deputies was dependent on their confirmation by the Senate.

Cardoso is a former commissioner for budget and economic planning during the first term of Tinubu as the Lagos state governor Lagos.

“This directive is in conformity with Section 8 (1) of the Central Bank of Nigeria Act, 2007, which vests in the President of the Federal Republic of Nigeria, the authority to appoint the Governor and four Deputy Governors for the Central Bank of Nigeria, subject to confirmation by the Senate of the Federal Republic of Nigeria,”

The statement is titled, ‘President Tinubu nominates new CBN governor and management team for senate screening and confirmation.’ ⁣

Tinubu also approved the nomination of four new Deputy Governors of the Central Bank of Nigeria, for a term of five years at the first instance, pending their confirmation by the Senate.⁣

They include Mrs. Emem Usoro, Mr. Muhammad Dattijo, Mr. Philip Ikeazor, and Dr. Bala M. Bello.

“In line with President Bola Tinubu’s Renewed Hope agenda, the President expects the above-listed nominees to successfully implement critical reforms at the Central Bank of Nigeria, which will enhance the confidence of Nigerians and international partners in the restructuring of the Nigerian economy toward sustainable growth and prosperity for all,” the statement added

Dr. Yemi Cardoso is a financial and development expert with over thirty years of experience in the private, public and not-for-profit sectors.

His private sector experience includes an illustrious career with Citibank, Chase and Citizens International Bank.
He has served on the board of several leading companies including Texaco and Chevron Oil Plc.

He is a member of the Belgian-based Cities Alliance Think Tank which aims to shape and influence policy and decision-making on urban development in Africa and has strong relationships with key international donor agencies.

He has his first degree from the University of Aston, United Kingdom and his second degree from Harvard University, USA.

In 2017, he was awarded an honorary doctorate degree in business administration by his alma mater, Aston University, in recognition of “his outstanding contributions to business and society.

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Customs, 62 government agencies may lose revenue- collection functions to FIRS.

The Eyewitness Reporter
The Nigeria Customs Service is set to lose one of its critical functions of revenue collection to a sister agency, Federal Inland Revenue Service (FIRS).
This proposal was being touted by the Presidential Committee Tax Policy and Fiscal Reforms, which was set up Tuesday by President Bola Ahmed Tinubu.
Announcing the significant shift in revenue collection procedures of the federal government, Taiwo Oyedele, the Committee’s Chairman and a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), said that the Nigeria Customs Service and 62 other Ministries, Departments, and Agencies (MDAs) of the Federal Government will no longer directly collect revenue.
Oyedele, who was speaking on a current affairs program on Channel Television Wednesday, Sun Rise,
 said the responsibility for revenue collection for these MDAs will be transferred to the Federal Inland Revenue Service (FIRS) which is best suited for the purpose
Oyedele stated that Nigeria’s revenue collection from taxes is among the lowest globally, while the associated cost of collection remains disproportionately high.

 He emphasized that many MDAs, which were not originally designed for revenue collection, have been burdened with this task, diverting their focus from their core functions that are essential for economic facilitation.

“The objective is to enable organizations like Customs to concentrate on trade facilitation and border protection, and regulatory bodies like the Nigerian Communications Commission (NCC) to focus solely on telecommunications regulation.

” This realignment will enhance efficiency, decrease collection costs, and promote transparency in revenue management.”

He acknowledged that there might be resistance from stakeholders who currently benefit from the existing process, but underscored the committee’s intention to ensure that revenues are directed to the government as intended.

“Ironically, our cost of collection is one of the highest. And the reason for that is that we’ve got all manners of agencies. The Federal Government alone, we have 63 MDAs that were given revenue targets last year, no; actually in the 2023 budget,” he said.
“And two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy. Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.
“So, move those revenue collection functions to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.
“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly. It is also a way of holding ourselves to account as to how we spend the money we collect from the people.” declared Oyedele.
Stakeholders believed that asking the FIRS to take over the revenue collection function of the customs will mean posting the tax officials to the Ports, border posts and industrial areas where Customs normally collect these monies.
While lamenting the distortions in customs operations this innovation will cause, they also claimed it will further increase the cost of goods clearance at the ports.
Some other port operators also liken the proposed takeover of the revenue collection function of the customs by the FIRS to the time when a group of Accountants under the name of Professional Import Duty Administrators(PIDA) were brought into the port to collect revenue on behalf of the Customs.
The PIDA regime was introduced under the regime of the late maximum ruler, General Sani Abacha.
His then Finance Minister, Anthony Ani, an accountant, introduced the system before it was abolished by the government of  Olusegun Obasanjo.
It could be recalled that the economic team of President Tinubu had in recent times proposed the merger of the Customs with NIMASA and the FIRS, a proposal that may have been stood down due to the public outcry, especially from the maritime industry, against it.
It should also be recalled that the controversial  Customs Modernisation project is another assault on the revenue collection function of the service.
If the latest proposal sails through, the Customs will be restricted to its other two critical functions of trade facilitation and anti-smuggling operations.
It is yet to be seen if the government will defer to the proposal of the committee which was inaugurated by President Bola Tinubu on Tuesday and tasked with delivering tax reforms achievable in 30 days.
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Olawepo- Hashim foresees economic boom under Tinubu’s multi- pronged reform programmes

Mr. Gbenga Olawepo-Hashim,
 The Eyewitness Reporter

A stakeholder in Nigeria’s Energy Sector and a former Presidential Candidate, Mr. Gbenga Olawepo-Hashim, has predicted a phenomenal economic rebound in Nigeria owing to the current financial and economic reforms embarked on by the newly inaugurated administration of President Bola Ahmed Tinubu in the past one month.

The new administration, according to a report, inherited a floundering economy, with gross domestic product (GDP) growth rates for 2022 at 3.1 percent and for the first quarter of 2023 at 2.31 percent.

The 2022 trade surplus of only $2.85 billion dwindles in comparison to 2014’s $54.1 billion.

Also, Foreign Direct Investment (FDI) into Nigeria’s economy fell from $2.2 billion in 2014 to $0.47 billion in 2022, while budget deficit rose by 370.54 percent from 2016 to 2023.

Total public debt as of June 2013 was N7.93 trillion. It’s now at around N77 trillion.

But in the last one month, the President has announced two major economic reforms.

These include ending the debilitating petrol subsidies and the unification of the naira’s multiple exchange rates.

The petrol subsidies, experts agree, have strained Nigeria’s public accounts, contributing to a situation where higher global oil prices hurt, rather than help the economy.

Addressing journalists in Abuja, the nation’s capital on Monday, Olawepo-Hashim noted that the current policy reforms have eliminated distortions in the foreign exchange management on the one hand; and the removal of the corrupt system of oil subsidies on the other hand.

Before now, in Nigeria, there are four foreign exchange (FX) markets: the Interbank FX market, the Investors and Exporters (I&E) window, Bureau De Change (BDC) window, and the Small and Medium Enterprises (SME) window.

 However, due to the limited FX supply from exporters and foreign investors, the CBN played a significant role in supplying FX (in this case, USD) to these windows.

Olawepo-Hashim however stated that the policy to unify the exchange windows should have a long-term positive effect on foreign exchange rate and free flow of capital in the country while also yielding a positive impact due to increased confidence in the new government.

According to him, the removal of the subsidies regime in the pricing of Petroleum products is expected to lead to more investment in Mid and Downstream sub sectors of the oil and gas sectors with a net effect of the creation of value-added needed jobs.

He stressed that the new law on decentralization of electricity generation, transmission, and distribution, if properly implemented with concomitant policies, is capable of attracting about 300 billion US dollars over 5 to 7 years into the electricity sector from local and foreign financing sources.

Olawepo-Hashim equally explained that Nigeria per capital comparison with South Africa needs to generate, transmit and distribute about 200,000 MW of electricity, adding that “we can if we stay steadfast to needed reform.

 “Nigeria recorded that feat before with liberalization  of the telecom sector as she moved from a nation of 400,000 telephone lines in 1999 to a nation of 222 million active lines now.”

While stressing the importance of a naira exchange rate based on market indicators and informed projections to settle around 660 Naira to 1 US Dollar in the exchange market within the next 6 to 9 months, he urged the government to pay attention to immediate deployment of relevant social intervention programmes to cushion the effect of inflation on the burgeoning numbers of the poor.

He also emphasized that “our economic growth expectations must be inclusive and must not leave the majority of our people behind.

“It is a great season of hope and confidence for Nigeria. The nation is steadily on to an assured future as an economic powerhouse and great nation.”

Olawepo-Hashim argued that “Nigeria with the right policy mix will exceed the projection of Price Water Cooper that Nigeria will be the 9th largest economy in the world by 2050 adding that “we are capable of hitting the great economic Milestone predicted by PWC much earlier and climbing higher on the ladder.”

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