Category Archives: Nigeria Business

Nigeria’s Refineries Count N50 Billion Loss In First Quarter of 2020

Nigeria’s refineries have recorded a combined loss of N50 billion in the first quarter of this year.

The proclamation was made by Mr. Joseph Nwakuwe, during a webinar seminar titled ‘Repositioning the newsroom to respond to changes in the oil sector in a COVID-19 era’ organized by Accountability Workstream Facility for Oil Sector Transformation (FOSTER 11) yesterday.

Nwakuwe, who is the Chairman of Society for Petroleum Engineers(SPE), said the refineries post an average of N10 billion on a monthly basis, saying the country cannot afford to record losses in that huge number.

The oil expert warned that should the country fail to sell the refineries now, they may not get value for it anymore.

He said the refineries have outlived its usefulness and should be sold as soon as possible to those who can add value to it, adding that the amount of money spent on the endless rehabilitation of the refineries was no longer sustainable.

He added that country must come up with a fiscal policy that drives development in the midstream and downstream sectors so that they are more energized.

Nwakuwe lamented that the country was not getting value for its crude oil because a larger chunk of the resources was exported in its crude form and later returned as imported petroleum products.

This, he said, was not good for the industry and the economy as a whole.

From January to October 2019, refineries under the management of the Nigerian National Petroleum Corporation(NNPC) made a cumulative loss of N123.25billion.

An analysis of data in the October 2019 oil and gas report of the NNPC showed that all three entities recorded losses during the period under review.

Findings showed that while Kaduna Refining & Petrochemical Company (KRPC) posted a loss of N49.3billion in the 10-month period, Port Harcourt Refining & Petrochemical Company (PHRC) and Warri Refining & Petrochemical Company (WRPC) lost N36.7billion and N37.24billion respectively during the same period.

It was further observed that the actual revenue made by the three facilities during the period was N68.82billion while their expenses were put at N192.1billion.

Of the three refineries, WRPC made the highest revenue of N59.1billion during the period, even as it posted the highest loss of N96.32billion.

KRPC and PHRC made N6.23billion and N3.46billion as revenues in the 10-month period but lost N55.59billion and N40.16billion respectively.

For October 2019 alone, the facilities posted a cumulative loss of N11.72billion.
Their individual losses in October were N5.24billion, N3.38billion and N3.1billion for KRPC, PHRC and WRPC respectively.

On subsidies, the oil and gas expert said, the time to suspend further funding of fuel subsidy was now as the monies expended on same since 2006 was capable of building about five refineries.

Fire Guts Delta Market, Properties Worth Millions Destroyed

A midnight fire has reportedly razed down an office/storage building at Burutu Market in Burutu council area of Delta state.

It was learnt that goods and properties worth millions destroyed in the inferno, which started around 3am on Tuesday.

As at the time of filing this report, the cause of the fire was still not known.

Able-bodied men from the community were said to have expended several hours in an effort to put out the raging fire. Though no life was lost in the tragic incident, wares were consumed with traders lamenting and counting their losses.

The financial secretary of Burutu community, Engr. Aminu Suyei, who described the fire as “mysterious,” said the affected building houses the market’s regulatory office, as well as a store for food items.

According to him: “a lot of goods and commodities were lost to the mysterious inferno and up till now, the cause is yet to be ascertained”.

The Delta State Police Command confirmed the development.

Its Public Relations Officer, DSP Onome Onowakpoyeya said: “no, the cause is not yet ascertained. I think they said it is a shop that got burnt or somebody’s office.”

Four Financial Effects of Covid-19 On Nigerians

Things are no longer the same all around due to the coronavirus pandemic. As at Monday night, more than five million cases have been recorded all over the world with thousands of people dying from it.

In Nigeria, as at Monday night, 8,068 people have contracted the virus with, with 233 deaths. There are fears that this figure will continue to rise, until a lasting solution is found.

The pandemic has also taken a toll on the finances of Nigerians. Here are four ways Nigerians are affected financially by the health crisis:

1. Increased fare

One measure to prevent contracting COVID-19 is social distancing. This means one has to be two-meters apart from the other person. Transporters have been forced to adhere to this “new” rule and as such they have increased the transport fare of the few passengers that board their vehicles.

2. More consumption of food

It is becoming increasingly difficult for people to eat three times in a day during coronavirus crisis. Prices of foodstuff are increased, leaving people with little or no income.

3. Salary cuts

This is one sad reality coronavirus has brought to many Nigerian workers. Companies and industries have explained the difficulties they are passing through to operate and have no option than to either lay off some staff or cut salaries. This has left a sour taste in the mouth of Nigerian workers.

4. Fewer working hours

The Federal Government has mandates offices to open only between 8am and 3pm, meaning people work less hours with fewer productivity. When productivity is lower, revenues will be affected, leading to salary cuts and less fulfilment.

‘Treat Workers Well or Risk Losing Your Firms’ NLC Threatens Chinese Quarry Operators

Nigerian Labour Congress (NLC) in Ogun State has threatened showdown with Chinese quarry operators who allegedly treat Nigerian workers “like animals.”

The NLC expressed worry that many quarries owned by Chinese companies in the state treat their workers badly in terms of condition of service and remuneration, deploying what they termed “use-and-dump tactics.”

The NLC State Chairman, Emmanuel Bankole spoke at the weekend during a meeting with representatives of the quarry owners at the NLC Secretariat, Abeokuta.

The meeting which was facilitated by the State chapter of Nigeria Union of Mine Workers (NUMW) was attended by the Federal Comptroller of Labour, Comrade Anthony Olawoyin, the Federal Mining Officer, Bunmi Ayelabola, and the Chairman of the State NUMW, Comrade Fasiu Abiola.

According to the NLC Chairman, the quarry operators, apart from poor condition of service, have no adequate provision of Personal Protective Equipment (PPE) to protect workers from hazards.

“Information at our disposal revealed that many quarries owned by the Chinese, operating in the State hire Nigerians for cheap labour. They hire and fire at will; they use Nigerians as casual workers.

“The NLC law says a company is only allowed to employ a worker as casual staff for six months, after which such worker must be made a staff; but these quarries employ Nigerians for more than 27 years as casual workers,” he said.

Bankole alleged that many of the quarries do not allow their workers to unionise, saying “Unionisation is a fundamental human right that nobody and no employer can take away. If people are willing to unionise, you cannot take it away from them. They are free to unionise, to join any union of their choice.”

“The NLC shall take this no more, we are ready to contend with you (quarry owners). This is Nigeria and we will not allow anybody under any guise to come to Nigeria and use Nigerians anyhow they want. This is a country that is governed by rules and regulations.

“This meeting is not to witch hunt anybody but we are doing this for our country. It is because Nigeria is good, that they (Chinese) are here to do business. If Nigeria is not conducive, they will go back to their country. But this is our own country, and we have nowhere to go. This is why we owe it a duty to protect the weak,” Bankoke said.

While responding, one of the representatives of the quarry operators, Fase Olukayode denied the allegations.
Olukayode, a consultant to CCECC quarry, a Chinese company said, “As far as we are concerned, these allegations are not true. For the quarries that I’m consulting for, we have union, we have union leaders on our sites and there is no way the union will be looking at the Chinese maltreating our people; this is not possible,” he said.

Nigeria loses $1bn in law suit against Shell, Eni in the UK

A court in the United Kingdom has dismissed a $1bn bribery suit instituted against oil giants – Royal Dutch Shell and Eni by – the Federal Government of Nigeria, Bloomberg reports.

The judgement was delivered by, Christopher Butcher at a virtual hearing on Friday, putting to rest the long-standing trial on the Malabu oil deal of 2011.

The Christopher Butcher ruled that no English Court had the jurisdiction to try the case since it involves the same essential facts as a separate Italian criminal case.

The ruling connotes victory for the oil companies involved in the case, which have been clouded by accusations in a years-old dispute over exploration rights to a tract in the Gulf of Guinea called Oil Prospecting License 245 that has spread to courtrooms throughout Europe.

The Nigerian government accused the companies of diverting the monies that were paid for the acquisition of the oil exploration licence in 2011 to bribes and kickbacks.

It says Shell and Eni are partly responsible for the behaviour of Nigerian officials who used a $1.1bn payment to acquire the oil block for personal enrichment. Shell and Eni have denied any wrongdoing.

“We maintain that the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries,” Shell said in a statement.

The Nigerian government said in its own statement that the Italian criminal case has a completely separate legal basis from the UK civil case and it would seek permission to appeal.

Eni reportedly declined to comment on the matter.

The ruling does not affect ongoing Italian criminal proceedings, where Nigeria has a separate legal claim.

The Malabu scam, described as one of the most fraudulent oil deals in the world, involved the payment of $1.1bn by oil giants, Shell and Eni, to the Federal Government accounts in 2011 for OPL 245, said to hold reserves of about 9.23 billion barrels of oil.

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