Energy
NLNG laments over $355 million loss due to ‘illegal’ blockade by NIMASA
• Court case continues
BY: Justice Godfry
Nigeria’s flagship company, the Nigeria LNG Limited, has suffered revenue losses of over $355 million due to illegal blockade by the NIMASA, which persisted in spite of court orders, News Express can report this morning.
This is even as the legal battle between the two organisations is far from being over – going by the Certified True Copy of the March 29, 2019 judgement of the Federal High Court Lagos sighted on Thursday by News Express.
The 45-page judgement delivered by Justice Mohammed Lawal Garba says unequivocally: “The case is hereby ordered to be sent back to the Administrative Judge of the Lagos Division of the Lower Court to be assigned to a Judge thereof for expeditious determination on the merit.”
The foundation of the case dates back to May 3, 2013 when at about 4:20 p.m., a tug boat blockaded at the instance of NIMASA acting through Global West Vessel Specialists Limited, LNG Adamawa, an NLNG chartered vessel.
The blockade was a self-help effort to extract levies purportedly owed NIMASA by NLNG. According to NIMASA, these include shipping levies based on gross freight on exports and imports.
NLNG has consistently argued that the NLNG Act exempts it from payment of the Sea Protection Levy, the 3% freight levies on cargo exports shipped by NLNG, and the 2% Cabotage Levy.
NIMASA eventually lifted the blockade on May 5, 2013 after a meeting between the management of NLNG and NIMASA, in which it was resolved for lasting solutions to be sought under the rule of law.
On June 21, 2013, and in flagrant disregard of a subsisting court order barring it from further blockade of the Bonny Channel, NIMASA effected another illegal blockade of the Bonny Channel, preventing NLNG vessels and vessels belonging to its buyers from accessing or leaving the NLNG terminal.
After a three-week illegal blockade, during which NLNG was compelled to start making the disputed payments “under protest”, NIMASA ended the illegal blockade.
“Owing to the illegal blockade which persisted in spite of court orders, NLNG lost revenues of over $355 million,” a top source at NLNG said.
The dispute finally moved to court in June 2013 when NLNG filed a case at the Federal High Court, Lagos, seeking judicial clarity and interpretation on the legality or otherwise of the various levies imposed on NLNG by NIMASA.
In October 2017, the court delivered judgment in favour of NLNG against NIMASA, over applicability of the NIMASA levies. According to the court, NLNG was not liable to make the said payments to NIMASA, and all such payments already made by NLNG to NIMASA “under protest” should be refunded to NLNG forthwith. The court further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG and went further to restrain NIMASA from taking or continuing any steps to block, restrain, seize, detain or restrict NLNG (or its shareholders or subsidiary vessels or chartered vessels).
The said judgment of the Federal High Court was however reversed last week Friday, March 29, 2019, following an appeal filed against the same by NIMASA, with the Court of Appeal directing that the case between the two parties be remitted to the Federal High Court for a re-hearing.
“This decision,” according to a source, “gives the parties right to either go back to the Federal High Court for a re-hearing or appeal the decision to the Supreme Court.”
Continuing, the source said: “Where the case is to be heard afresh, the position of the parties would revert to what it was as at the time the case was filed, in which case no payments of the levies in dispute would be made by NLNG to NIMASA pending the re-hearing and determination of the suit. Where on the other hand the right of appeal to the Supreme Court is exercised, the status quo as of the date of the Court of Appeal judgment will be maintained, which is to the same effect.”
An NLNG official who spoke with News Express on Thursday said that the company is determined to remain a good corporate citizen in spite of its travails in the hands of NIMASA and “will continue to live up to its name and vision of ‘being a global company…helping to build a better Nigeria’.”
“In addition,” according to the source, “NLNG remains a good and responsible corporate citizen, committed to conducting its business in accordance with the laws of the Federal Republic of Nigeria, and abides with all applicable laws including those that confer exemptions on and grant fiscal/other incentives to businesses, as a way of sustaining its operations and growing the economy. By doing so, NLNG has recorded several feats in helping to build a better Nigeria:
“NLNG has monetised over 6.37 Trillion Cubic Feet of Associated Gas to Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs), thus helping to reduce gas flaring by upstream companies from over 60% to well under 20%.
“From the monetisation of gas hitherto being flared, NLNG has generated over $100 billion revenue since inception; paid over $36 billion to Shareholders as dividends, of which 49% of that total has gone to the Federal Government by virtue of its shareholding stake.
“$28 billion paid to Joint Ventures (JVs) feedgas suppliers. 55% to 60% of that amount has gone to the Federal Government courtesy of its stake in the JVs.
“NLNG is by far the highest individual payer of Companies Income Tax in Nigeria. In 2018, the company’s corporate income tax paid to the Federal Government amounted to about $864 million, over 40% of what was paid in 2017.
“World Class Operations at NLNG, ranked number 1 in Plant Reliability in 2018 with the achievement of 98.4% Plant Reliability, projecting Nigeria’s image positively.
“Ranked fourth LNG Company worldwide by market share.
“NLNG is arguably number 1 in CSR in Nigeria. It has spent over N25 billion on community projects over the years; spent over N2 billion on building world-class engineering laboratories in six Nigerian Universities through the University Support Programme; spending N120 billion on the construction of Bonny-Bodo Road in Rivers State. Furthermore, the company signed an MOU with the Bonny Island community to provide N3 billion each year for 25 years for the overall development of the Kingdom.
“NLNG’s planned expansion with the construction of Train 7 will increase plant production by 35%, attracting huge Foreign Direct Investment (FDI) – $2 billion in upstream investment; some $5 billion in construction; creating over 10,000 jobs during construction etc. The 35% increase is expected to significantly impact on revenue, dividends, taxes profiles and CSR contribution in Nigeria.”
Energy
NNPC, Dangote Strengthen Strategic Partnership
Bot partners reaffirmed commitment to Healthy Competition Towards National Prosperity, reports SANDRA ANI
As part of ongoing efforts to promote mutually beneficial partnerships and foster healthy competition, the Nigerian National Petroleum Company Limited (NNPC Ltd.) and Dangote Petroleum Refinery & Petrochemicals (DPRP) have pledged to deepen collaboration aimed at ensuring Nigeria’s energy security and advancing shared prosperity for Nigerians.
This commitment was made during a courtesy visit by the President/Chief Executive of Dangote Group, Mr. Aliko Dangote, and his delegation to the Group CEO of NNPC Ltd., Mr. Bashir Bayo Ojulari, and members of the company’s Senior Management Team at the NNPC Towers, on Thursday.
During the visit, Dangote pledged to collaborate with the new NNPC Management to ensure energy security for Nigeria.
“There is no competition between us, we are not here to compete with NNPC Ltd. NNPC is part and parcel of our business and we are also part of NNPC. This is an era of co-operation between the two organizations.” Dangote added.
While congratulating the GCEO and the Senior Management Team on their “well-deserved appointments,” Dangote acknowledged the enormity of the responsibility ahead, noting that the GCEO is shouldering a monumental task, which he expressed confidence that, with the capable hands at his disposal in NNPC, the task is surmountable.
In his remarks, the GCEO, Mr. Bashir Bayo Ojulari assured Dangote of a mutually beneficial partnership anchored on healthy competition and productive collaboration.
Ojulari highlighted the exceptional caliber of talent he met in NNPC Ltd., describing the workforce as a dedicated, highly skilled and hardworking professionals who are consistently keen on delivering value for Nigeria.
Expressing the company’s readiness to build a legacy of national prosperity through innovation and shared purpose, Ojulari said NNPC will sustain its collaboration with the Dangote Group especially where there is commercial advantage for Nigeria.
Both executives also committed to being the relationship managers for their respective organisations through sustained productive collaboration and healthy competition, thereby envisioning limitless opportunities for both organizations.
Energy
AVEVA is providing data management support for renewable natural gas projects
Reporter: Godwin Ezeh
Key Highlights
● AVEVA’s industrial information infrastructure has been selected by Archaea Energy to provide key data management support
● AVEVA’s industrial software to optimize performance across Archaea’s RNG plants
AVEVA, a global leader in industrial software driving digital transformation and sustainability, has been selected by Archaea Energy, the largest renewable natural gas (RNG) producer in the US, to build a comprehensive operations data management infrastructure.
Using AVEVA’s software, Archaea Energy can collect, enrich and visualize its real-time operations data, enabling performance analysis across its growing network of plants.
Using AVEVA PI Data Infrastructure, a hybrid solution with cloud data services, the plants will be able to share data to highlight operational opportunities and optimize efficiency.
Caspar Herzberg, CEO, AVEVA, stated,
“Through this collaboration and the use of AVEVA PI Data Infrastructure, Archaea’s growing network of plants will have streamlined operations with accurate performance analysis throughout the expansion. AVEVA’s CONNECT software platform leverages industrial intelligence from a central location, making it easier to deploy additional digital solutions in the future.”
“As the largest RNG producer in the United States, we are dedicated to delivering reliable, clean energy,” said Starlee Sykes, chief executive officer of Archaea Energy. “This relationship will allow us to optimize operations and offer detailed performance analysis as we continue to expand across the country.”
…OML 13 Asset Eyes 80,000 bpd by End of 2025
In a major boost for Nigeria’s crude oil production, revenue generation and economic growth efforts, the NNPC Ltd has officially unveiled its latest crude oil grade, the Utapate crude oil blend, before the international crude oil market.
It would be recalled that in July, 2024, NNPC Ltd and its partner, the Sterling Oil Exploration & Energy Production Company (SEEPCO) Ltd introduced the Utapate crude oil blend, following the lifting of first cargo of 950,000 barrels which headed for Spain.
During a ceremony held at the Argus European Crude Conference taking place in London, United Kingdom, on Wednesday, the Managing Director, NNPC E & P Limited (NEPL), Mr. Nicholas Foucart described the introduction of the Utapate crude oil blend into the market as a significant milestone for Nigeria’s crude oil export to the global energy market.
“Since we started producing the Utapate Field in May 2024, we have rapidly ramped up production to 40,000 barrels per day (bpd) with minimum downtime. So far, we have exported five cargoes, largely to Spain and the East Coast of the United States; while two more additional cargoes have been secured for November and December 2024, representing a significant boost to Nigeria’s crude oil export to the global market,” Foucart told a packed audience of European crude oil marketers.
He added that since its introduction into the global market, the Utapate crude oil blend has enjoyed a positive response from the international crude oil market, due to its highly attractive qualities.
Foucart said the Oil Mining Lease (OML) 13, fully operated by NEPL and Natural Oilfield Services Ltd (NOSL), a subsidiary of SEEPCO Ltd, boasts a huge reserves of 330million barrels of crude oil reserves, 45 million barrels of condensate and 3.5 tcf of gas.
“We have a number of ongoing projects to increase our production from the current 40,000bopd to 50,000bopd by January 2025 and 60,000bopd to 65,000bopd by June 2025. Essentially, we are targeting opportunities to increase production to 80,000bopd by the end of 2025,” Foucart added.
He said the Utapate crude oil terminal is sustainable, affordable and fully compliant with the rigorous environmental regulations and sustainability principles especially those aimed at reducing carbon emissions and other ecological effects.
Also speaking, the Managing Director of NNPC Trading Ltd (NTL), Mr. Lawal Sade said the pricing structure of the Utapate crude oil blend is similar to that of Amenam crude as it is a light sweet crude which is highly sought after by refiners across the world due to its low sulphur content, efficient yield of high-value products, API gravity and other similarities.
He said in bringing the new crude oil blend to the global market, NNPC Ltd wanted to optimise value for both its producers and counterparties across the globe.
He added to ensure predictability and sustainability of supply, the NNPC Trading intends to run a term contract on the Utapate crude oil blend cargoes, principally targeting off-takers from the European and the US East Coast refineries.
Produced from the Utapate field in OML 13 in Akwa Ibom State in Nigeria, the Utapate crude oil blend is similar to the Nembe crude oil grade. It has a low sulphur content of 0.0655% and low carbon footprint due to flare gas elimination, fitting perfectly into the required specification of major buyers in Europe.
The NNPC E&P Ltd and NOSL partnership is also committed to operating in a manner that is safe, environmentally responsible, and beneficial to the local communities.
The Utapate field development plan, executed between 2013-2019 and approved in October, included converting wells and facilities from swamp/marine to land-based operations.
The plan involved a multi-rig drilling campaign for 40 wells and the development of significant infrastructure such as production facilities, storage tank, a subsea pipeline and an offshore loading platform to facilitate crude oil evacuation and loading.
The entry of the Utapate crude oil blend into the market is coming barely a year after the NNPC Ltd announced the launch of Nembe crude oil, produced by the NNPC/Aiteo operated Oil Mining Lease (OML) 29 Joint Venture (JV).
This remarkable achievement signals the commitment of the NNPC Ltd to increasing Nigeria’s crude oil production and growing its reserves through the development of new assets.
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