Economy
NNPC Threatens to Cut JV Contracts Over Inflated Production Cost
By Adedapo Adesanya
The Nigerian National Petroleum Corporation (NNPC) has warned contractors that it would cancel some of its Joint Venture (JV) contracts over their bloated production cost.
The Group Managing Director (GMD) of the national oil company, Mr Mele Kyari, made this disclosure yesterday during the fourth edition of the Nigerian Association of Petroleum Explorationists (NAPE) webinar seminar series titled The Impact of COVID-19 on the Nigerian Oil and Gas Industry-The Way Forward.
He warned contractors, suppliers and companies against padded, over-bloated and unrealistic contract figures, which is costing the corporation and the country.
Mr Kyari said the activities of some of its partners, especially indigenous oil companies, involve producing oil at a very high cost of about $93 per barrel while some others are producing same at a relatively cheaper cost.
‘‘The era of some of our partners producing at a very high cost will no longer be acceptable to us anymore. It is either they become more efficient at what they are doing by cutting cost or be ready to be shown the way out.
‘‘If they are not ready to be cost effective, then we may have no other option than to cancel those contracts and give them to those that can manage and produce at a relatively cheaper cost. This is business and we cannot afford to run same like a charity organisation,” he said.
The NNPC chief lamented that the high cost of production in the industry was unacceptable and was as a result of a number of factors, some of which included; structural inefficiencies that exist in the system and processes, environmental factors which every contractor factors in while doing business; be it risk as it relates to human resources and materials.
He noted that every cost on the list of business has a premium that is related to the country’s operating environment, insisting that those premiums are much exaggerated and not reflective of the realities on ground because suppliers, contractors and companies were only taking advantage of such to hike contract cost.
Mr Kyari warned indigenous companies of this unwholesome act, saying the NNPC in its several dealings with them have observed a list of governance structure and processes that are not significant and is now enroaching on International Oil Companies (IOCs), eventually resulting into producing oil above its actual cost.
The NNPC GMD said the current vision is to achieve a $10 per barrel industry cost, adding that for these to happen companies must do so many things to arrive at that cost.
According to him, part of what should be done to achieve that target is for stakeholders to be more cost conscious, plan better, more realistic, and prudent and the appropriate leadership to drive the focus.
He assured that the attainment of a $10 per barrel by 2021 was possible; adding that such would enable the country to meet its three million barrels per day and 40 billion oil reserve targets in a seamless manner.
He noted that it was while discussions was ongoing among stakeholders to see how the cost of oil production could be reduced that the coronavirus pandemic hit the global stage, forcing the country’s hesdline crude price to an oil time low of about less than $10 per barrel.
He said the coronavirus pandemic has clearly proven to oil producers that the commodity could actually sell for less than $10 per barrel, adding that the country cannot continue to produce if something was not done about the cost.
He said it was time to consider current realities because oil producers that are not ready to produce at around $10 per barrel was not in tune with the market realities must be ready to quit the stage for those that are ready for the challenges ahead.
By Adedapo Adesanya
The National Insurance Commission has issued new guidelines for the collection, management, and administration of the Insurance Policyholders’ Protection Fund.
In a circular issued to all insurance institutions on Tuesday, the regulator also set May 31, 2026, as the deadline for insurers to submit their assessment returns for the 2025 financial year.
Recall that on August 5, 2025, President Bola Tinubu signed into law the Nigerian Insurance Industry Reform Act ( NIIRA 2025).
This landmark legislation repeals the Insurance Act 2003, and consolidates related provisions, ushering in a modern regulatory framework. It lays a strong foundation for sustainable growth and increased investment in the country’s insurance sector.
The commission said the guidelines were issued in exercise of its powers under the 2025 Act and other existing insurance laws and regulations to provide regulatory clarity, improve guidance, and ensure ease of compliance across the industry.
According to NAICOM, the guidelines establish a comprehensive structure for the operation of the IPPF, which serves as a statutory safety net to protect insurance policyholders in the event of distress or insolvency of a licensed insurer or reinsurer. The framework also provides direction on the reimbursement of loans by insurers and reinsurers.
NAICOM stated, “The guidelines ensure regulatory clarity, guidance and ease of compliance, as it provides a comprehensive regulatory framework for the collection, management, and administration of the Fund, which serves as a statutory safety net designed to protect insurance policyholders against distress and insolvency of a licensed insurer or reinsurer, including guidance for the reimbursement of loans by an insurer or reinsurer.
“Please be informed that the IPPF Assessment Returns in respect of the year 2025 shall be submitted to the Commission not later than 31st May 2026, while subsequent submissions shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund.”
By Adedapo Adesanya
The Dangote Refinery on Wednesday returned the petrol price to N1,200 per litre, less than 24 hours after it increased it by 5 per cent.
The private refinery had raised the ex-depot price by N75 on Tuesday, citing pressure from volatile global oil markets, but quickly brought it back to N1,200 per litre from N1,275 per litre.
The swift downward review is directly linked to a sharp drop in international crude prices. Brent crude has plunged to $95.05 per barrel, after a 13 per cent decline, while the US West Texas Intermediate (WTI) crude closed at $97.18, recording nearly a 14 per cent drop.
This development comes after US President Donald Trump announced a conditional two-week ceasefire with Iran, which eased fears of immediate supply disruptions in the global oil market.
“This will be a double-sided CEASEFIRE!” Trump said on social media, marking a sharp reversal from his earlier warning that “a whole civilisation will die tonight” if Iran failed to comply with US demands.
Iran’s Foreign Minister, Mr Abbas Araqchi, confirmed that the country would halt attacks provided strikes against Iran cease and transit through the Strait of Hormuz is coordinated by Iranian forces.
Despite the breakthrough, tensions remain elevated across the region, with several Gulf states reporting missile launches, drone activity, or issuing civil defence warnings.
While oil prices have fallen back below $100, they remain significantly elevated after surging by a record amount in March. Market analysts noted that regardless of how successful the ceasefire is, geopolitical risk related to the Strait of Hormuz is likely to remain elevated for the foreseeable future under the control of Iran.
By Adedapo Adesanya
Crude oil deliveries from the Nigerian National Petroleum Company (NNPC) Limited to the Dangote Petroleum Refinery doubled in March, boosting prospects for improved fuel availability.
This was revealed by the chief executive of Dangote Industries Limited, Mr Aliko Dangote, on Tuesday, when he received the Deputy Secretary-General of the United Nations, Mrs Amina Mohammed, at the industrial complex in Ibeju-Lekki, Lagos.
While speaking on feedstock supply, Mr Dangote commended the NNPC for increasing crude deliveries to the refinery in March, noting that volumes rose to 10 cargoes—six supplied in Naira and four in Dollars—to support domestic fuel availability, according to a statement by the Refinery.
“Last month, they gave us six cargoes for Naira and four cargoes for Dollars,” he said.
Despite the improvement, Mr Dangote noted that the supply remains below the 19 cargoes required for optimal operations, with the refinery continuing to bridge the gap through imports from the United States and other African producers.
He also expressed concern over the unwillingness of international oil companies operating in Nigeria to sell to the refinery, stating that their preference for selling crude to traders forces it to repurchase at higher costs, with broader implications for the economy.
Mr Dangote added that the refinery is seeking increased access to domestically priced crude under local currency arrangements as part of efforts to moderate fuel costs and enhance long-term energy and food security across the continent.
On her part, Mrs Mohammed underscored the strategic importance of Dangote Industries Limited -particularly Dangote Fertiliser Limited—in addressing Africa’s mounting food security challenges, while calling for stronger global partnerships to scale its impact.
Mrs Mohammed said the United Nations would prioritise amplifying scalable solutions capable of mitigating the continent’s food crisis, describing Dangote’s integrated industrial model as a critical pathway.
“I think the UN’s job here is to amplify and to put visibility on the possibilities of mitigating a food security crisis, and this is one of them,” she said. “I hope that when we go back, we can continue to engage partners and countries that should collaborate with Dangote Industries.”
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