Nigeria: President Jonathan sacks NNPC's GMD

On 1 August it was announced that President Goodluck Jonathan had dismissed both Nigerian National Petroleum Corporation’s (NNPC) Group Managing Director (GMD), Andrew Yakubu, and Hamidu Namtari, Managing Director of the NNPC’s upstream subsidiary, Nigerian Petroleum Development Company (NPDC).

The President’s special media and publicity adviser, Dr. Reuben Abati, released a statement naming Borno State’s Dr. Joseph Dawha as NNPC’s new GMD and Anambra State’s Anthony Ugonna Muoneke as NPDC’s new GMD. The statement continued that “All the appointments are with immediate effect,” but refused to comment on the reasons behind the dismissals. 

Reports in Nigeria, however, suggest that the dismissals are linked to the allegations by the Central Bank of Nigeria’s former governor, Lamido Sanusi, over the NNPC’s misuse of public funds and an upcoming PWC audit of NNPC finances and revenue losses. 

The statement continued that President Jonathan had approved a further shake-up of NNPC management with Ms. Aisha Mata Abdurrahman reassigned to the corporation’s Commercial and Investment GMD and Dr. Attahiru Yusuf’s appointment as its Business Development Group Executive Director.

This week’s issue of Nigeria Politics & Security and the August issue of Nigeria Focus will provide expert analysis about the changes and the reasons behind them.

IOCs and Nigerian Interagency Group wide apart

The refusal of the federal government's Interagency Group
to back down on its plans to use the Petroleum Industry Bill to change the measurement point for crude production for tax purposes has become one of the biggest bones of contention with the international oil industry.

Up to now, Nigeria has made the measurement point the same as the point of transfer for crude, i.e., the terminal. However, Tim Okon, general manager for strategy at the Nigerian National Petroleum Corporation (NNPC) and a leading figure in the Interagency team, has been insisting that it be moved to the point of production, i.e., the field.

The proposed change has massive consequences for the IOCs, in particular in the onshore environment. In effect it means they would be obliged to pay tax and royalties on sometimes substantial volumes of stolen crude that is drawn off between the field and the terminal. A source with one IOC says, 'A loss of 10 per cent is entirely possible and that could make the difference between whether you break even or not in Nigeria.'

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates

Nigeria and China in negotiations over an $8 billion oil refinery deal

Nigeria and China are in negotiations over an $8 billion oil refinery, which will be built locally, once the agreement is approved by the Nigerian National Petroleum Corporation (NNPC).

The two countries, agreed to $23 billion of funding to build three new oil refineries and a petrochemical complex in the West African nation, back in early May. The construction of the facilities is aimed to aid Nigeria produce the estimated 750,000 b/d needed to curb imports of refined petroleum products.

At present Nigeria's four existing refineries have a combined capacity of 445,000 b/d, however some are unable to produce maximum output due to ineffective equipment and poor maintenance, which has forced Nigeria to depend on imports to meet its refined-fuel demand.

It is expected that the new refinery could potentially raise Nigeria's refining capacity above 40ml litres of petrol compared with the current capacity of 18ml. The general manager of Greenfield Refineries, Mr Adebayo Ibirogba, said that the deal will be negotiated between NNPC and a delegation of Chinese representatives.

“Although the talks have been exploratory for now, we're positive that a deal can be signed after further discussions with the Chinese who will be in the country by Monday (5th July),” Ibirogba said in an interview.

Source: Nigeria Tribune

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.