August 2022

Articles  ·  Events
NNPC TRANSITION- A NEW DAWN FOR A NEW ERA

The Gas Aggregation Company Nigeria Limited (“GACN”) attended the official transitioning of the Nigerian National Petroleum Corporation (“NNPC”) into a limited liability company on Tuesday, 19th July 2022 at the banquet hall in Abuja, attended by the acting MD, Mr. Chijioke Uzoho. President Muhammadu Buhari while formally unveiling the new NNPC emphasized that he was privileged to sign the PIA in 2021 and the transformation of the Petroleum Industry will strengthen the growth of the new company. The leadership of NNPC and other dignitaries were all in attendance. The Minister of State for Petroleum Resources, Mr. Timipre Sylva in his speech said, the new NNPC is a new vintage for partnership while the CEO Mallam Mele Kyari added that the new company would be managed like a private sector enterprise and is expected to become more efficient in its operations.

NNPC was established on 1st April 1979 under the statutory-decree No 33 by a merger of Nigerian National Oil Corporation (“NNOC”), with its operational functions and the Federal Ministry of Mines and Power with its regulatory responsibilities. NNPC is a major player in both the upstream and downstream sectors. Its products include crude oil, gas, petroleum products and petrochemicals, products transportation as well as marketing.

On 16th August 2021, the (Petroleum Industrial Bill) PIB was signed into law which became PIA (Petroleum Industrial Act), the PIA is an act that will regulate the oil and gas sector. It will lead to a drastic transformation in the sector by attracting huge investment and collaborations within the sector.

The Nigerian National Petroleum Corporation on 19th July 2022 was formally unveiled as Nigerian National Petroleum Company Limited by President Muhammad Buhari, which means the status of the corporation has changed and it will be run as a limited liability company, whose operations will run in compliance with the provisions of the companies and the Allied matters act (2020).

The transition indicates among others but is not limited to:

  • The new NNPC will be a commercial entity thereby having new operational structural changes and transformation.
  • It will be a profit-driven entity, by providing a more productive fiscal, commercial and regulatory framework to support competition and investment by creating a fully commercial entity.
  • The new NNPC will declare dividends to its shareholders and retain 20% profit which means the Nigerian populace can also invest in the company.
  • The new structure of the company will strengthen and boost the interest and confidence of investors while attracting foreign direct investment to the energy sector.
  • It will Increase the revenue of the Federal Government by paying its share of all fees, royalties, oil shares and taxes.
  • The new NNPC will list its shares on the stock exchange mid 2023 according to its Group Chief Executive Officer Mallam Mele Kyari.
  • The new company will no longer bear the burden of petroleum subsidy but will continue to support in supplying petroleum products to the Federal Government at a commercial value.
  • The new company will be IPO (Initial public offer) ready which means that you have the system processes and a company that can account to its shareholders and stakeholders.
  • As a commercial entity, the company will no longer contribute to the Federal account but pay taxes and royalties to Federal Government and divided to shareholders and deliver value to 200 million shareholders.
  • The new company will be free from institutional regulations such as treasury single account.
  • The new NNPC is incorporated under the Companies and Allied Matters Act to be known as NNPC Limited.

 

Gas Aggregation Company Nigeria (“GACN”) in line with its new objectives and mandates is also on its way to transitioning in to a limited liability company, with a change in its operational and structural changes to reflect the change. GACN can leverage on and replicate its major shareholder and stakeholder, NNPCL in its transitioning phase within it space and limitations, there by having more value-added commercial engagement and partnership with the new NNPC.

Articles  ·  Events
NIGERIAN OIL AND GAS CONFERENCE 2022

The Nigerian Oil and Gas Conference in its quest to actualise the energy revolution in the country in the “DECADE OF GAS” once again has captured the way forward to level up with the energy sector in terms of engagement and collaboration. The 21st edition of the (“NOG”) conference themed “Funding the Nigerian Energy Mix for Sustainable Economic Growth” took place from 4th July through 7th July 2022 and was held at the International Conference Centre Abuja. In attendance were notable figures in the Oil and Gas industry in Nigeria including, The Group Managing Director NNPC Mallam Mele Kyari, Managing Director and Chief Executive TotalEnergies SE Mr. Mike Sangster, the Chairman and Managing Director Chevron Nigeria/Mid African Business Unit, Mr Richard Kennedy were all distinguished stakeholders that attended and participated in sessions to deliberate on issues and prospect of the industry.

Gas Aggregation Company Nigeria Limited (“GACN”) was represented by the acting MD, Chijioke Uzoho who attended the event and actively took part in brainstorming on issues bothering the industry that need urgent attention, for more business opportunities and partnerships for sustainable economic growth.

The conference involved a more robust and integrated discussions by stakeholders, investors, and industry leaders and the entire oil and gas professionals. Issues around the oil and gas industry was elaborated and challenges, obstacles, solutions and resolutions were discussed and agreed upon.

Articles  ·  Events
2ND WEST AFRICA LPG EXPO AND NLPGA SUMMIT 2022

As an ardent advocate of the Decade of Gas, the Gas Aggregation Company Nigeria (“GACN”) attended a summit on Thursday, 23rd June, and Friday, 24th June 2022 at Balmoral Convention Centre, Federal Palace Hotel Lagos hosted by the Gas Academy and the Nigeria LPG Association (NLPGA) with the theme “ENERGISING THE FUTURE: LPG AS A SUSTAINABLE FUEL IN AFRICAN ECONOMIES”.

To further deepen GACN’s Gas penetration and commercialization in the domestic market, the conference offered valuable insights into the LPG market while highlighting the key challenges in the sector. GACN also had the chance to network with LPG experts across the value chain. 

Furthermore, Nigeria with an average annual growth rate of more than 20% over the past 10 years, has one of the fastest growing LPG markets and is also one of the largest markets for new LPG cylinders and equipment. Industry players, financiers, stakeholders, and a host of others graced the event while giving a brainstorming session, in particular experts made presentations as such:

Mr. Nuhu Yakubu, President of the Nigerian LPG Association and MD Banner Energy Ltd specified that (NLPGA) LPG penetration will rise from the current 7.5 cylinders per year to 10 million cylinders per year.

The Deputy Managing Director of NLNG, Mr. Lekan Ogunleye stated that NLNG is a great supplier of the Decades of Gas. Until the advent of NLNG, the Nigerian LPG market was mainly supplied by refinery production and imports. He added, that in 2007, NLNG commenced LPG allocation for the domestic market supply with 50,000MT/annum, and in 2008, it increased to 150,000MT/annum. Since then, there has been a steady increase in NLNG’s LPG allocation to the domestic market. As of 2020, NLNG supplied about 40% (450,000mt) of its LPG production to the domestic markets and has now decided to supply 100% of its LPG production to the Nigerian market, reducing LPG exports. He further stated that NLNG is committing 89.2b to the development of the Bonny Road linking to the plant and that NLNG is making financial commitments for the renovation of 3 jetties in Nigeria. He however acknowledged the challenges facing the LPG Industry in Nigeria:

  • Industry-inadequate infrastructure.
  • A lack of storage facilities.
  • Limited local production capacity.
  • Mismatches in the demand and supply for LPG.

The Chairman of the Natural Gas Expansion Program (NGEP) Dr. M.M Ibrahim emphasized that NGEP was established to help better the utilization of gas and its development in the domestic market, with the major objective to expand gas supply by utilizing all the assets and resources, adding that Nigeria should be classified as an Oil and Gas Exporting Nation as we export 42% of gas through NLNG.

The CEO of National Petroleum Authority (NPA) Ghana, Dr. Mustapha Abdulhamid gave a brief that Ghana started using LPG in 1990. He went further to add that there has been a steady movement to promote gas penetration by the Federal Government.

The rise of LPG in Ghana, according to him prompted its neighbors from Burkina Faso and Mali to come to Ghana for LPG offtake but the promotion of LPG came with additional risks of explosion and the Federal Government banned all future expansions in the LPG market due to a recent explosion in 2017, which resulted in the LPG penetration in Ghana to stall considerably.

Engineer Simbi k. Wabote the Executive Secretary of NCDMB; also had this to say that NCDMB has a goal to develop strategies for organic penetration to make Energy Sources available, accessible, acceptable, and affordable before 2030.

The event was graced by the former President of Nigeria, Chief Olusegun Aremu Obasanjo who gave a keynote speech about the policy he initiated in 2005 during his tenure which states in a nutshell that the international oil companies and gas producers in Nigeria, rather than export all the gas should commit a certain volume to the domestic market. It was on the premise of this policy that the Domestic Gas Supply Obligation (DSO) was implemented.

Chief Olusegun Aremu Obasanjo also encouraged other Oil and Gas majors to remain committed and look at how to develop the local liquefied petroleum gas sector as a way of showing appreciation to a country in which they have benefited enormously.

Notwithstanding, there are some major challenges in the Nigerian LPG markets:

  • Inconsistencies in regulations and their interpretations across states.
  • Infrastructure deficit,
  • Limited and inadequate LPG receiving terminals and storage in Nigeria.
  • Stakeholders are not enlightened about major interventions that are ongoing.
  • Unavailability of raw materials for the production of cylinders.
  • Multiple taxation and changes including transportation levies.
  • This causes the price of LPG to go up and will be borne by the end users.
  • Capacity building.

Hence, GACN in its pursuit of business partnership and collaboration always leverages opportunities like this to foster and strengthen its commercial assurances for a stronger agreement, understanding, and engagement.