Unfortunately, this financial lifeline for so many retirees, survivors of deceased workers, and workers with disabilities, is facing its own financial turmoil. In order for Social Security to be shored up for future generations, elected lawmakers are going to have to act sooner than later -- and it all starts at the top with President Joe Biden.
President Joe Biden delivering remarks. Image source: Official White House photo by Katie Ricks.
For more than eight decades, Social Security has, without fail, paid retired worker benefits and provided some level of financial foundation for those who can no longer work. But in 2021, the program's pendulum swung the wrong direction for the first time in nearly four decades. More specifically, it paid out more in benefits than was collected in revenue.
This shift from Social Security consistently bringing in more revenue than it pays out is the result of numerous demographic changes taking shape. Some of these you're probably familiar with, such as baby boomers leaving the workforce in greater numbers. But other changes might not be so readily apparent.
Other demographic changes that are adversely impacting Social Security include a near-halving in net immigration into the country since mid-1997, historically low birth rates in the U.S., and growing income inequality.
However, President Biden believes he has the solution.
Prior to being elected president in November 2020, Biden released a four-point proposal designed to strengthen Social Security for future generations. This included changing the program's measure of inflation, boosting the primary insurance amount (PIA) for beneficiaries from ages of 78 through 82, and increasing the special minimum benefit. But the flagship change offered in Biden's Social Security plan is to increase payroll taxation on the rich.
In 2023, all earned income between $0.01 and $160,200 is subject to Social Security's 12.4% payroll tax. By "earned income," I mean wages and salary, but not investment income. If you work for a company or someone else, you and your employer split the liability for this tax down the middle (6.2% each). If you're self-employed, you owe the entirety of the 12.4%.
Approximately 94% of working Americans earns less than the maximum taxable earnings cap (the $160,200 figure). Put another way, 94% of workers are paying into Social Security with every dollar they earn this year. On the other hand, roughly 6% of high earners are expected to top $160,200 in earned income in 2023. All wages and salary above this threshold are exempted from the payroll tax.
Based on data from the Social Security Administration, the percentage of earned income subject to Social Security's payroll tax has declined from 90% in 1983 to just 81.4% as of 2021. As noted by a recently published blog from the Economic Policy Institute, that's the lowest level of earnings being subjected to the payroll tax in 49 years. More importantly, it's confirmation that wage growth for high-earning workers is outpacing the near-annual increase in the maximum taxable earnings cap for Social Security's payroll tax.
The solution offered by then-presidential-candidate Biden was to reinstate the payroll tax on earned income above $400,000, while creating a doughnut hole between the maximum taxable earnings cap and $400,000 where earnings would remain exempt. Over many decades, this doughnut hole would completely close as the maximum taxable earnings cap rises with the National Average Wage Index.
Biden's proposal, if passed, would immediately boost revenue for Social Security, with the goal of pushing back the OASI's potential asset reserve depletion date well beyond 2034.
Image source: Getty Images.
On paper, increasing taxation on a larger percentage of earned income sounds like an easy solution to strengthen Social Security. The question is, "Would it work?"
Although taxing the rich would, indeed, raise a lot of extra revenue for Social Security, Biden's other reforms would offset most of this boost. Altering the program's inflationary tether to the Consumer Price Index for the Elderly (CPI-E) would lead to higher annual cost-of-living adjustments. Additionally, increasing the PIA for older beneficiaries, as well as the special minimum benefit, reduces the impact of raising payroll taxes on high earners.
The other dilemma with increasing payroll taxation on the rich is that they're arguably already paying their fair share.
Social Security retirement benefits are calculated based on earned income up to the maximum taxable earnings cap in a given year. Likewise, maximum retirement benefits are capped at full retirement age ($3,627 per month in 2023). Hypothetically speaking, you could earn $10 million a year for the 35 years the Social Security Administration takes into account when calculating your retirement benefit, but your maximum monthly benefit wouldn't exceed $3,627 at full retirement age in 2023. In other words, it doesn't make a lot of sense to tax earned income that has no bearing on a worker's retirement benefit.
While some form of higher taxation will likely be needed to strengthen Social Security in the coming years, simply "taxing the rich" as the sole solution isn't going to fix Social Security or come anywhere close to resolving its $20.4 trillion funding shortfall.
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Nigerian National Petroleum Company Limited (NNPC) says it is taking coordinated steps for further frontier exploration in the north.
The company said this in a document, seen by TheCable, about NNPC's border exploration services activities from 2020 to 2022.
According to the document, some prospective states where oil is expected to be discovered include the states of Niger, Nasarawa, Sokoto, Borno, Yobe, Adamawa, Bauchi and Gombe.
Further north, the Anambra basin was listed as another area where NNPC is striving to find more oil.
Prospecting is the first stage in the discovery of oil and gas deposits, by virtue of which seismic studies are carried out.
These are the highlights of the exploration activities of the Nigerian oil company in two years.
NNPC SEISMIC DATA ACQUISITION
The NNPC paper showed that the 2D seismic acquisition was completed at line kilometer 700 (LKM) in the Sokoto basin, where crop compensation payment was completed.
According to NNPC, post-acquisition reached 70 percent in the 600 LKM basin in Bida, while acquisition activities were suspended in the southern Chad basin, due to undisclosed circumstances.
To ensure the continuation of activities in the southern Chad basin, he said that the security clearance was received from the defense headquarters on November 7, 2022.
NNPC said it has also applied for a waiver from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for the environmental impact study (EIA) for the start of operations in the aforementioned basin.
Meanwhile, for the 813A 3D oil prospecting license (OPL) in the southern Chad basin, post-acquisition is 65 percent complete.
In Nasarawa State, the NNPC paper revealed that the 86 km2 Keana West 3D seismic data has been fully acquired, but post-acquisition activities have yet to start.
NNPC said it is looking for oil in phase 13 in Wadi, Yobe state, where a probable area of 168 km2 is being assessed.
In Adamawa, he noted that it is in phase 14 of the Kinasar prospect, covering 170 km2, as well as phase 15 of the Ziye prospect, covering 172 km2, all in the Borno basin, adding that both prospects have been fully assessed for security risk.
In addition, he said that while the contractual agreements for phases 13 and 14 have been executed, the one for phase 15 is yet to be executed.
OIL EXTRACTION FEATS
Highlighting progress in drilling prospective well sites, the national oil company said it has reached the stage of drilling six sites in the border basins.
According to the document, the company drilled Kolmani River 3, which began in April 2020 and completed in November 2020, drilling 13,000 feet.
NNPC also drilled the Kolmani River 4 well from July 2021 to September 2021, noting that drilling in the Chad Basin and three other sites will begin soon.
According to the report, the company has also applied for permits from the regulatory agency to complete the drilling of the phase 8 – X3 well in the Chad basin.
The NNPC report further explained that "oil play fairway analysis", basin modeling activities and seismic interpretation were underway in the Anambra basin and had reached 65 percent completion.
Section 9 of the Petroleum Industry Act (PIA) established the frontier exploration fund (FEF) with the allocation of 30 percent of the proceeds from NNPC upstream oil and gas contracts (participation contract in the production, profit-sharing and risk-sharing) for this purpose.
FIRST CRUDE OIL DRILLING PROJECT IN THE NORTH
On November 22, 2022, President Muhammadu Buhari inaugurated the Kolmani Integrated Development Project (KIPRO) located on the border of Bauchi and Gombe states.
KIPRO is an 809 and 810 Oil Prospecting License (OPL) at the Kolmani field site in the Gongola Basin of the Upper Benue Trough.
The first phase of the project is expected to comprise an on-site oil refinery with a capacity of up to 120,000 barrels per day, a gas processing plant of up to 500 million standard cubic feet per day, a power plant of up to 300MW of capacity and a fertilizer plant of 2,500 tons per day.Credit: https://www.thecable.ng/6-oil-drilling-sites-anambra-basin-now-65-highlights-of-nnpcs-frontier-exploration-in-two-years
President Muhammadu Buhari has opposed the jurisdiction of the Abuja Federal High Court to consider a lawsuit by Ifeanyi Ararume challenging his removal as non-executive chairman of the Board of the Nigerian National Petroleum Company Limited (NNPCL).
In a preliminary objection notice filed on behalf of Mr. Buhari by the Federation Solicitor's office, the president said that Mr. Araraume's removal from the NNPCL board as president was made in his capacity as a public official under Section 251 (1) of the 1999 constitution.
It was signed by Maimuna Shiru, Acting Director of the Department of Civil Litigation and Public Law of the Federal Ministry of Justice.
Citing relevant provisions of the Law for the Protection of Public Officials of 2004, the president further argued that Mr. Araraume's lawsuit was time-barred, having fired the latter on January 17, 2022, being a period of approximately seven months before the filing of this claim. on September 12, 2022.
He maintained that, since the case is an abuse of the judicial process, it robs the court of jurisdiction to hear it and determine it.
The notice of objection was filed on December 8, 2022.Senator Ifeanyi Ararume
PREMIUM TIMES reported that Mr. Ararume, who was appointed to the position in September 2021, was removed shortly before the company's board inauguration in January 2022.
The former gubernatorial candidate in Imo state filed the suit with the Abuja Federal High Court on September 12 to challenge his ouster some eight months earlier.
He argued that his dismissal was "unfair" and amounted to "disruption and interruption" of the term of office.
It said that it violated several provisions of the Companies and Related Matters (CAMA), 2020, the Petroleum Industry Act (PIA), 2021 and the company's Memorandum and Articles of Association.
He prayed for 100 billion naira in damages and an order reinstating him in office.
He also urged the court to annul all decisions the NNPC Limited board had made since his wrongful removal from office.Thursday's hearing stalled
The scheduled hearing before the judge, Inyang Ekwo, was stalled due to the incorrect delivery of court documents on Thursday.
The amended source citation for the newly incorporated Nigerian National Petroleum Company (NNPC) was found to have been delivered to the Federal Ministry of Justice.
In proceedings on Thursday, NNPCL's lawyer, Oluseye Opasanya, Chief Advocate for Nigeria (SAN), informed the court that their submissions were based on the initial source summons.
Mr. Opasanya told the judge that he was not served with the initial source summons that he ordered amended to accommodate the Corporate Affairs Commission (CAC) as a defendant in the lawsuit.
In response, Mr. Ararume's lawyer, Chris Uche (SAN), disagreed with Mr. Opasanya's assertions, adding that the amended source citation had been served on all parties as required by law.
But a search by the judge for proof of delivery in the case file showed that the delivery of the source summons was at the Federal Ministry of Justice and not at the NNPCL.READ ALSO: Buhari Replaces Ifeanyi Ararume as NNPC Board Chairman
This prompted NNPCL's lawyer to volunteer to liaise with the Ministry of Justice to collect the amended citation of origin and resubmit their processes to list CAC as one of the defendants.
Subsequently, Mr. Ekwo adjourned the case until January 11, 2023 to allow the parties to modify their filings to accommodate the CAC.
The judge warned that all the lawyers involved in the lawsuit must present and exchange all their documents before the postponed date.
He added that any lawyer who did not comply with the warning would be personally sanctioned by the court.FILE: President Muhammadu Buhari flanked by rivers Rotimi Amaechi left accompanied by Senator Ifeanyi Ararume as the two paid a courtesy visit to the president in Daura Katsina state. PHOTO; SUNDAY AGHAEZE. APR 14 2015Background
Mr. Ararume filed the lawsuit marked FHC/ABJ/CS/691/2022 through a group of senior lawyers including Chris Uche, Ahmed Raji, Mahmud Magaji, Ogwu James Onoja, Kingsley Nwufor and Gordy Uche, all SAN .
In the lawsuit filed in September, Mr. Ararume raised four issues for the court's determination.
One of the issues is whether, under the interpretation of Section 63(3) of the Petroleum Industry Act 2021, the chairman can lawfully remove you as non-executive chairman of NNPC Limited for any reason outside the provisions of the law. .
He prayed for a N100 billion demand as compensation for his alleged illegal removal as non-executive chairman of the NNPCL.
He demanded the sum as damages that he caused him in the alleged illegal way in which he was relieved of his position as head of the NNPCL after using his name to establish the entity.
Mr. Ararume also wants the court to determine whether Mr. Buhari can dismiss him without complying with the expressly stated provisions of the Articles of the Company's Deed of Incorporation, section 63(3) of the PIA Act 2021 and section 288 of the CAMA 2020 Law.
He also urged the court to declare that under the provisions of section 63(3) of the PIA Act, the CAMA Act and the NNPC Memorandum of Association, the chairman cannot remove him from his position as non-executive chairman without following due law process.
The plaintiff sought a court order to vacate his removal from Mr. Buhari, see letter dated January 17, 2022 with reference number SGF.3V111/86.
He also sought a court order immediately reinstating him and restoring him to office with all the rights and privileges that accrue to the position of non-executive chairman of the NNPC.
The plaintiff further urged the court to vacate and vacate all decisions and resolutions of the NNPC Board made in his absence from January 17, 2022 to date, and another order preventing defendants from withdrawing his name as director of the business.Support PREMIUM TIMES journalism of integrity and credibility Good journalism costs a lot of money. However, only good journalism can guarantee the possibility of a good society, a responsible democracy and a transparent government. For continued free access to the best investigative journalism in the country, we ask that you consider making a modest support for this noble effort. By contributing to PREMIUM TIMES, you are helping to keep journalism relevant and ensuring that it remains free and available to everyone.
TEXT AD: Call Willie - +2348098788999Credit: https://www.premiumtimesng.com/news/top-news/570643-nnpc-appointment-buhari-opposes-araraumes-n100-billion-suit.html
Nigerian National Petroleum Company Limited (NNPC) is owned by the federation, but all shares of the incorporated NNPC are vested in the ministries of oil and finance, a structure that raises concerns about state interests as the company considers offering their actions to the public. .
Passed last year, the Petroleum Industry Act (PIA) provides that ownership of NNPC shares will be vested in the government upon incorporation and held by the Ministry of Finance Incorporated ( MoFI) and the Ministry of Petroleum Incorporated (MoPI) in equal shares. on behalf of the Federation.
Before the PIA became law, state governments, through the Nigerian Governors Forum (NGF), had kicked the structure. They recommended that since the corporation is owned by all three levels of government, the newly incorporated entity (NNPC Limited) should be owned by a vehicle that "owns the interest of all three levels of government."
They argued that the institution that is positioned to carry out this mandate is the Nigerian Sovereign Investment Authority (NSIA).
Many stakeholders have praised the NSIA's ownership structure. The NSIA Act, which created the institution in 2011, empowers the organization to receive, manage, and invest funds in a diversified portfolio of medium- and long-term assets on behalf of the Federal Government, state governments, the Federal Capital Territory ( FCT), and Local Government Area Councils in preparation for the eventual depletion of Nigeria's hydrocarbon resources.
To give effect to the mandates, the NSIA established three main funds: the Stabilization Fund, the Future Generations Fund and the Nigerian Infrastructure Fund.
The role of the Stabilization Fund is to provide budget support in times of economic stress; the Future Generations Fund is an intergenerational savings fund for future generations of Nigerians, while the Nigerian Infrastructure Fund is for investing in national infrastructure.
But lawmakers decided to scrap this strategy. They prefer to award ownership to two government ministries on behalf of the federation.
“This makes it clear that the Federation is the beneficial owner of the shares in NNPC Limited,” said Wolemi Esan, Deputy Managing Partner of Olaniwun Ajayi LP.
Esan said the Supreme Court has been consistent in its view that the federation refers to the federative units, which comprise all the states and the FCT.
“In the context of the PIA, therefore, it is clear that the state governments (which are federated units) have an ownership interest in NNPC Limited, through MoFI and MoPI.”
Regarding what this would mean for NNPC in an initial public offering (IPO), he said: “Whether NNPCL's proposed initial public offering will yield any direct benefit to state governments will largely depend on the structure of the public offering. initial. it is structured as an 'offer to sell', so that the shares held by MoFI and MoPI are what, or part of what, is offered to the public, then state governments will be entitled to a share of the proceeds.”
“However, where the proposed IPO is structured as a 'subscription offering,' the state government will not gain any direct benefit in terms of profit sharing,” he said.
Taiwo Oyedele, a partner at PwC Nigeria, argues that although the MoFI and MoPI jointly own the NNPC shares, they do so as trustees of the Federation.
Also Read: Representatives Back NNPC/Tompolo Partnership on Pipeline Safety
This is the reason for the requirement to seek approval from the National Economic Council for the disposal of NNPC shares, so that the subnational level of government has a say in any privatization of NNPC.
“In any case, any proceeds or proceeds from the sale of NNPC shares and other sources must be remitted to the Federation's account. This effectively makes the states joint beneficiaries of the NNPC even though only the Federal Government is the legal owner,” he said.
Analysts have called for a more effective ownership structure for NNPC, one similar to NSIA or the Niger Delta Power Holding Company (NDPHC), which allows state governments to sit on the board of companies.
NDPHC is incorporated under the Companies and Allied Act as a private limited liability company with fully subscribed participation by the federal, state and local governments with the mandate to manage energy projects labeled 'National Integrated Energy Projects'.
State governments have no representation on NNPC's board and are not involved in critical decisions about the company.Credit: https://businessday.ng/uncategorized/article/explainer-will-states-lose-out-as-nnpc-positions-for-ipo/
On the second day of the President’s 2022 Meet the People Tour, President Barrow embarked on several site visits, which included the new Governor’s office and Residence in Kerewan, the PIA training centre also in kerewan and the Kerr Kuta farms in Kuntair.
At the Kerr Kuta farms, President Barrow was taken on a tour of the farm, where young people from the village are engaged in vegetable farming, poultry and small ruminant production.
He commended Mr. Abu khan, a native of Kerr Kuta, for funding the project, thus employing the community youths.
The President then proceeded to the day's first meeting in Badibu Gunjur, informing the crowd that the government would introduce D4000 more on the price for a ton of groundnut.
This will increase the price from D28,000 in 2021 to D32,000.
This initiative supports farmers in gaining good profits from their harvest.
The President said the government had spent 500 million Dalasi on fertiliser subsidies between 2021-2022.
He urged farmers to sell their produce locally and not to foreign vendors.
President Barrow expressed similar sentiments at the day's second meeting in Farafenni, where he further urged Gambians to support the country’s development efforts.
The Honorable Minister for Gender, Children and Social Welfare, Fatou Kinteh, who spoke at one of the meetings, announced the disbursement of over 7 million dalasis in support funds to more than 50 women groups through the Women Enterprise Fund initiative.
The Nigerian Extractive Industries Transparency Initiative (NEITI) says it has not hired staff without due process.
He said in Abuja that the media report to that effect "is false, uninformed, misleading and lacking a fair hearing."
Dr. Orji Ogbonnaya Orji, Executive Secretary, NEITI made this clarification at the induction training for his new staff.
“We are disappointed that the story authors never bothered to consult with NEITI for our feedback on fairness and balance.
“However, let me reassure all Nigerians, the Extractive Industries Transparency Initiative (EITI) and our global partners that NEITI is certainly aware of and quite sensitive to our public ethics and commitments to the EITI principles,” he said.
He said that the induction/training had been designed to introduce staff to the world of transparency accountability in the management of the oil, gas and mining sector through the instruments of NEITI/EITI.
“You join our organization at a time when issues of poor governance, lack of transparency and accountability in the extractive industry are national and global concerns, especially in Nigeria.
“This induction program is one of the crucial steps we have taken to prepare you for the task ahead and embed you into NEITI's culture and principles of transparency, integrity and accountability.
“The key message here is that there is a void in NEITI that they have been recruited to come in and fill,” he said.
He said that to start the recruitment, the Human Resources Committee of the National Stakeholders Working Group (NSWG) that conducted the exercise, reviewed more than 2,000 Curriculum Vitaes in the NEITI database of applicants under the NEITI policy "Leave the request back".
“This is a policy implemented over the years to preserve and provide hope for applicants seeking a career with the organization,” he said.
He said the waiver granted to the NEITI Commission (FCC) was informed to the applications the agency received in the course of the contracting exercise.
Of this large number of applications, according to him, 166 candidates are shortlisted and invited for interviews.
He said that of these numbers, 145 people attended, 18 people were absent, and three were disqualified due to integrity issues that included the lack of proof from NYSC and differences in age statements.
“These were followed by 23 candidates who scored 75 percent or higher and entered the national merit list, while another 36 who scored between 70 and 74 percent made the general merit list. 82 candidates reached the minimum score of 65 percent.
“Four candidates who scored the minimum score of 65 percent were strictly considered to address fairness in the representation of the federal character,” he said.
However, he said that in the course of recruiting, NEITI also took into account the gender equity and diversity issues of the Nigerian state.
In a keynote address, Mr. Olusegun Adekunle, Chairman of NEITI NSWG, said that upon its inauguration in July 2021, he started a program for strengthening the secretariat and expanding the agency to other geopolitical areas.
He said this was because policy direction was required for the successful implementation of NEITI's five-year Strategic Plan (2022-2026) developed and approved to drive the workforce growth plan developed.
“The workforce plan specifically identified the urgency for NEITI to inject young graduates with the workforce and creative skills needed to help drive the recently developed five-year strategic and growth plan.
“The Petroleum Industry Act (PIA) has set new standards for reform and NEITI, as a member of the Presidential Steering Committee on PIA implementation, has an obligation to respond appropriately with adequate manpower and resources,” explained.
He said the process that produced this class of 2022 had been rigorous, based on merit, and in compliance with all procedures set forth by the Federal Government.
Source Credit: NAN
An economics expert, Dr. Afolabi Olowookere, said oil revenues, in terms of contribution to the federation account, fell from 46.9% in 2017 to 7.4% in the first half of 2022.
Olowookere, the managing director of Analysts Data Services and Resources Ltd., made this known Tuesday in a statement titled "Federation Distribution Performance, Budgeted vs. Actual."
He said that overall, the federation account's share of total distribution had dropped from 81.4% in 2017 to 66.1% in 2022.
Olowookere added that the group's share of Value Added Tax (VAT) rose steadily from 18.6 percent to 33.9 percent during the period.
According to him, the share of oil has been falling and is expected to continue to fall, while VAT has been gaining its share.
“Gas flaring penalty revenue increased from N3.8 billion in 2017 to N98.6 billion in 2021, while contributing N39.2 billion in the first half of 2022.
“Overall, the revenue projection has been much higher than the amount realized on the various components of oil revenue,” he said.
However, Olowookere said that gross profit from crude oil and gas sales performed well above projections, except for 2020 and 2019, with negative variations of 38.1 percent and 62.1 percent, respectively.
He said that apart from 2020, actual oil revenues had been more than 50 percent lower than their budgeted values.
Olowookere added that in terms of contribution, oil and gas gross profit has decreased over time, PPT and gas revenue as well as oil and gas royalties have increased their share.
On the Petroleum Industry Act (PIA) and its implication on federation account revenue, he said that the PIA had the primary objective of restructuring and transforming Nigeria's oil and gas industry.
He listed the key pillars of the PIA as a national grid system for acreage management, oil mining leasing, exploration and prospecting licenses, frontier exploration, and host community development funds.
Others included them as a midstream and downstream gas infrastructure fund, tax on hydrocarbons, tax on company profits, royalties, fines and sanctions.
He said the implications of the PIA on federation account revenue could be examined through a few channels including the establishment of regulatory agencies, multiple agencies and the cost of collection.
He listed other channels such as NNPC Limited and its business operations, Remittances to the Federation Account Allocation Committee (FAAC) vs. Consolidated Revenue Fund (CRF), Newly Created Funds in PIA and FAAC, PIA and New Taxes and PIA on Subsidy made out of fuel.
“If deregulated properly, the elimination of the payment of subsidies implies a higher FAAC and more revenue for the government to provide basic services.
“Despite these provisions, the government still continues to pay subsidies for certain reasons.
“While section 31(d) of the PIA may suggest the removal of subsidies, it is not impossible that the process of providing a price and tariff framework and advice on trade matters will lead to some price controls or reintroduction of subsidies. .
“Sections 32(e), 32(f) and 64(m) can be used to justify the continued payment of the subsidy,” it said.
He stressed that it was imperative to have the courage to remove the subsidy, but it should be done in a way that did not add further burden to citizens who were already stressed due to harsh economic realities.
Source Credit: NAN
An energy consultant, Ademola Adigun, says fingerprinting Nigerian crude supported with international advocacy will permanently address frequent crude oil theft in the country.
Adigun said this in an interview with the News Agency of Nigeria on Thursday in Lagos.
According to him, fingerprinting is a process that gives the crude oil a unique identifier from Nigeria.
“Many types of oil exist, we may need to tell one oil from another during a spill.
The chemical composition of oil found in the environment yields important clues about its origin.
“The process of determining where a sample of oil (or hydrocarbon residue) originated is what we call fingerprinting.
“This is the way it is done with diamond in Liberia and other countries.
It makes it difficult to purchase.
“On crude oil theft, the focus should be detailed implementation of the Petroleum Industry Act (PIA) particularly the Host Community sections.
That may also reduce it.
“But a more permanent solution is to consider fingerprinting Nigerian crude supported with international advocacy,’’ he said.
On fuel scarcity, Adigun said that full deregulation of the downstream sector of the petroleum industry remains the best option to resolve frequent scarcity in the country.
He said that full deregulation would automatically eliminate subsidy, adding that subsidy payments was harmful to the economy.
According to him, elimination of subsidy will also allow investment into the critical areas needed by the private sector.
The expert said: “lingering fuel scarcity is a function of price.
Full deregulation will allow for more imports by players other than Nigerian National Petroleum Company Limited (NNPC).
“The current monopoly of petroleum importation by NNPC is part of the problem.
“Private sector companies have proved reliable to a large extent.
Is it not time we have a real midstream?
“There are no other short-term measures.
NNPC does not have dollars to issue orders for the needs of Nigeria.
“The possible short term measure is to adjust prices and partial removal of subsidy.
Then there is the challenge of the 0.5 per cent charge on products from the value chain in the downstream.
“That should reduce to 0.2 per cent until growth is achieved in that sector.
” Adigun urged the government to ensure the proper implementation of PIA and remove the monopoly power of the NNPC to foster required economy development in the oil and gas sector.
On refinery, Adigun said, “the problems of the refineries go beyond privatisation.
“The refineries will not be profitable in a regulated environment.
“Refinery margins are low.
So, changing the management will not guarantee success.
“And who will be interested in purchasing our refineries now with Dangote coming on stream in the second quarter of 2023?
“What is the point of holding moribund assets”
Some experts in the oil and gas industry have advised the Federal Government to ensure proper implementation of the Petroleum Industry Act (PIA), and transparency in future marginal fields licensing bids.
The experts gave the advice in seperate interviews with the News Agency of Nigeria in Lagos on Tuesday against the backdrop of the just concluded 20202021 marginal fields bid.
Mr Ayodele Oni, Partner, Broomfield Law Practice, told NAN that the just concluded 20202021 bid was a brilliant idea by the government to raise funds.
Oni alleged that the exercise was conducted in secrecy, and that many people complained that the process was not transparent.
He, however, said there were some positives in the sense that a number of bidders were able to come up with funds to buy the assets and there were newer and better rules.
“Other than those, the defunct Department of Petroleum (DPR) did not do a great job,” he said.
On the success of the bid, he said apart from the government raising funds through the exercise, it involved more indigenous players and had the potential to increase production.
He, however, said the exercise brought together strange bedfellows, and that it lacked sufficient transparency.
Oni identified other challenges to include claims of corruption, inordinate delays and the list of preferred bidders, which was never issued publicly.
He said the owners of the marginal fields would now be independent of head lessors and have their own Petroleum Mining Lease (PMLs) under the PIA.
“Also, we expect a more transparent process in future Marginal Field Licensing Bid Round.
“The powers of the minister have been reduced with better checks and balances.
“The PIA should be properly implemented and transparency should be entrenched in the next bid round,” he said.
Similarly, Mr Joe Nwakwue, an oil and gas consultant, said it was too soon to make an informed assessment of the just concluded 20202021 marginal fields licensing bid.
Nwakwue noted that from the detailed study of prior exercises, awarding assets to multiple parties posed lots of challenges.
He said one was constrained to observe the rather high signature bonuses paid, noting that it might make it difficult for the awardees to raise funds for field development.
Nwakwue, who is also the former Chairman, Society of Petroleum Engineers (SPE), Nigerian Council, said completing the award process in such an uncertain environment was clearly a plus but challenges of funding and technical capacity persisted.
“Awards to multiple parties except where they jointly bid should be avoided.
“We also need to be very clear on the objective of the licensing round; are we raising money or given blocks to parties that have what it takes to develop and monetise the assets,” he said.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says its integrated industry-wide study to reactivate shut-in wells in the short, medium, and long-term is at the report writing stage.
The NUPRC said the integrated industry-wide study which it inaugurated to ascertain shut-in wells that could be reactivated had been concluded and was at report writing stage.
The Commission Chief Executive, Mr Gbenga Komolafe, said this on Monday in Abuja in a news conference to highlight the achievements of the commission since inception in 2021. According to the CCE, the primary aim is to boost oil production and guide investment planning.
“In addition, the study aims to optimise recovery factor via identification of candidate wells and recommend low hanging potentials to boost National production.
Komolafe said that it had awarded 47 petroleum prospecting licences to winners of marginal fields during the 2020 marginal field bid round.
He said the commission ensured the development of model licence and model lease in conjunction with Legal and Compliance and Enforcement (C&E) SBU and renewal of OMLs 128, 130, 132, 133 and 138. He said that the move was critical in the development and increased production of oil and gas.
According to Komolafe, the commission has within the past one year achieved, among others, declaration of the nation’s reserves which stands at oil and condensate reserves 37.046 MMMB.
“This indicates an increase of 0.37 per cent compared to 2020 figures.
Life index stands at 60 years.
“Gas reserves of 208.62 TCF indicates an increase of 1.01 per cent compared to 2020 figures.
Life index stands at 88 years,’’ he said.
He further said that the automation of upstream work processes was almost completed.
According to him, it is planned to improve the efficiency of our work processes and become operational before the end of year 2022. “Ikike first oil was officially celebrated in September 2022. It is expected to deliver peak production of 50,000 barrels of oil equivalent per day by the end of 2022 ,” he added.
Komolafe also said that the commission had ensured the deployment and commissioning of Aiteo 120kbd barge mounted crude oil processing facility to minimise crude oil theft and vandalism.
He added that the deployment and commissioning of Tenoil 10kbd Early Production Facility (EPF) would increase crude oil daily production by 10kbd.
Komolafe also said that the development of the advanced cargo declaration regime, and Crude oil and Liquefied Natural Gas Tracking (COLT) are also in process.
“We also ensured the completed establishment of ELI-AKASO crude oil export terminal,’’ he said.
The NUPRC boss said that publishing of up-to-date data on national crude oil production on the commission’s website ensured transparency of data and information.
According to him, it has provided accurate volume to both internal and external users.
“In line with the provisions of section 108 of the Petroleum Industry Act, (PIA 2021), NUPRC commenced engagement and sensitisation of all operators to submit gas flare elimination and monetisation plan.
“10 high impact technologies, innovation, and solutions have been successfully qualified and adapted into the Nigerian oil and gas industry.
“The high impact technologies aim to increase oil discovery and production, reduce cost of pipeline maintenance and integrity threshold among others,’’ he said.
He restated the commission’s commitment to ensure that all petroleum industry operations were properly monitored to ensure that they are in line with national goals and aspirations.
Komolafe stressed the need to ensure that health safety and environment regulations conform with national and international best oil field practice.
He also emphasised the need to maintain records on petroleum industry operations, particularly on matters relating to petroleum reserves, , licences and leases.
He pledged that the commission would continue to advise government and relevant agencies on technical matters and public policies that may have impact on the administration and petroleum activities.
Komolafe said that NUPRC would ensure timely and accurate payments of rents, royalties and other revenues due to the government while maintaining and administering national data warehouse.