Yemisi Izuora
A preliminary report submitted to President Muhammadu Buhari by the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, has indicated that about $1 billion in foreign exchange would be saved from fuel import substitution when local refineries commence full production.
The submission of the report was confirmed by the president’s media aide, Mr. Garba Shehu.
In the report, the NNPC said the nation’s refineries were likely to achieve full production by the end of the year.
According to the GMD, progress was being made towards bringing back the nation’s refineries to full production and the management of the corporation was working to ensure full capacity production is achieved before the end of the year.
When completed, the report said it was expected to achieve an annual savings of about $1 billion in foreign exchange from fuel import substitution. It also said additional total savings of over $500 million annually would be made from the petrochemical products of the Kaduna Refinery and Petrochemical Company.
Kachikwu said that the corporation had begun the process of recovering over $7 billion in over-deducted tax benefits from joint-venture partners on major capital projects.
The report also said that a reputable international accounting firm had been engaged by the NNPC to ascertain the exact amount due government on the Strategic Alliance Contracts entered by its exploration and production subsidiary, Nigerian Production Development Company (NPDC) and Atlantic Energy Drilling Concept Limited, where up to $2.46 billion of government money would be recovered.
It also revealed that consequent upon an extensive investigation of the various toxic crude oil-for-refined products swap contracts, a total sum of $420 million had so far been reconciled in favour of NNPC and was now due for recovery from the legacy OPA/SWAP contracts. Of the reconciled amount, the sum of $277 million had been recovered in lieu of products and the recovery effort was still ongoing, the report added.
The report stated that gas supply to the power plants that had hitherto been handicapped, had improved significantly from about 630 to 861 million standard cubic feet per day (mmscf/d), resulting in improved power supply witnessed in the country.
It further revealed that gas supply for power and peak electricity generation had in recent times reached a historical high of 876mmscf/d and 4,782MW respectively.
