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Shell to spend $10bn to develop Bonga Southwest/Aparo field

Editor February 13, 2019 Business, Latest, Oil and Gas Leave a comment

Oil giant Shell’s Bonga South West/Aparo (BSWA) deepwater project, located in Oil Mining Lease (OML) 118 in the Niger Delta, is set for development, it was learnt Tuesday.

This is coming on the heels of the output of 200,000 barrels per day from Egina field operated by Total, which began production last month.

The BSWA deepwater project, which according to the Minister of State for Petroleum, Dr. Ibe Kachikwu, will cost $10 billion with numerous value addition in-country, including job creation, skills acquisition and capacity development for Nigerians.

Kachikwu had last year directed the Nigerian National Petroleum Corporation (NNPC) and Shell Nigeria Exploration and Production Company (SNEPCo) to commence the tendering process for the execution of the project.

A top industry hinted one of our correspondents in Lagos that the stakeholders have to take the Final Investment Decision (FID) on the project and will soon announce invitation to tender for the BSWA project.

The source, which was at the stakeholders’ meeting, said: “Shell Nigeria Exploration and Production Company Limited (SNEPCo), the deepwater arm of Shell in Nigeria, has concluded OML 18 negotiations with the Nigerian National Petroleum Corporation (NNPC).

“We now have a clear commercial framework, aligned with stakeholders and the confidence to move forward the Bonga South West Aparo FID. This is a key milestone for the project and the development of Nigeria’s deep water oil and gas industry.

“SNEPCo is pleased to announce NNPC and its unit partners involved in BSWA development, have reached agreement to on the key commercial terms necessary to move the development forward.

“This agreement covers related production sharing contract interpretation disputes. It also sets an incentivizing and fair framework for developing this world class opportunity whilst opening further opportunities in the prolific Nigerian deepwater oil and gas industry.

“We look forward to realising the significant benefits to the Nigerian state, the Nigerian deepwater oil and gas construction contractors, their workforce and the investing parties as we progress towards the investment decision, construction and start up.

“Following the OML 118 Heads of Terms agreement, we are pleased to announce the release of the BSWA Invitation to Tender, where Nigerian and international companies on the agreed bid list are requested to bid for the various contract packages that make up engineering procurement and construction (EPC) of the BSWA project.

“This is an important step that will allow ourselves, the government and investing parties to understand the cost of the project and if within expectation, take the project to a final investment decision.”

On when the FID will be taken, the stakeholders identified competitive bidding as the first stage, followed by evaluation and sanctioning activities.

“We are now working on details of the plan. We are expecting a very competitive cost. It will become when bids are received, they said when asked about the project cost,” the source said.

On April 17, last year, President Muhammadu Buhari attended a meeting with a delegation from Royal Dutch Shell Plc, led by its Chief Executive Officer Ben Van Beurden, in London, where a decision was reached that the oil giant and the NNPC would begin the implementation of projects that have been on the drawing board for several years.

The project is expected to add 225,000 barrels per day of crude oil to Nigeria’s production.

The BSWA also extends into OMLs 132 and 140, operated by Chevron, where it is called Aparo. The project includes the construction of a new floating production, storage and offloading (FPSO) facility.

SNEPCo is the operator of the BSWA project with NNPC, Esso Exploration & Production Nigeria (Deepwater) Limited, Total E&P Nigeria Limited, Nigerian Agip Exploration Limited, Texaco Nigeria Outer Shelf Limited, Star Ultra Deep Petroleum Limited, Sasol Exploration and Production Nigeria Limited as shareholders.

SPDC announces FID on Assa North Gas Project

Editor December 24, 2018 Business, Oil and Gas, Uncategorized Leave a comment

The Shell Petroleum Development Company of Nigeria Limited, SPDC, has announced the Final Investment Decision, FID, on the Assa North Gas Development Project in Imo State, a major momentum to the domestic gas aspiration of the Federal Government for increased power generation and industrialisation.

At peak production, the project is expected to produce 300 million standard cubic feet of gas per day and will be treated at SPDC JV’s Gas Processing Facility and distributed through the Obiafu-Obrikom-Oben pipeline network.

Osagie Okunbor, managing firector of SPDC and Country Chair, Shell Companies in Nigeria, who disclosed this on Sunday noted that the project would be a major game-changer in Nigeria’s quest for energy sufficiency and economic growth. “This is good news for the SPDC JV and Nigeria as we look to grow the domestic market and optimise our onshore footprints.”

Okunbor said, “The project is key to driving the Federal Government of Nigeria’s ambition of marching away from a mono-economy through diverse industrial growth. It is premier amongst the Seven Critical Gas Projects initiative led by the Ministry of Petroleum and the Nigerian National Petroleum Corporation, NNPC. Their integrated focus, support and drive were instrumental to this investment decision.”

Okunbor added that the SPDC JV would continue to explore other areas of support for the expansion of domestic gas supply and continue to make investments under the right conditions.

Toyin Olagunju, SPDC’s director and general manager, Projects, said the Assa North project would be a significant contribution to GDP growth in Imo State and across Nigeria as the gas produced will be utilised in-country across diverse industries, while providing economic opportunities for local communities.

Just three weeks ago, the SPDC JV signed a gas supply and aggregation agreement with Geometric Power Aba Limited, GPAL, for the supply of about 43million standard cubic feet of gas per day to support the 140MW Aba Integrated Power plant at Ossisioma in Abia State.

By the agreement, SPDC will supply gas from the SPDC joint venture gas plant in Imo River traversing Abia and Rivers States to the power producer, GPAL, via a gas pipeline network which is already installed.

SPDC is the operator of a Joint Venture involving the Nigerian National Petroleum Corporation, NNPC, which holds 55%; Shell 30%; Total Exploration and Production Nigeria Limited, TEPNG, 10%; and Nigerian Agip Oil Company Limited, NAOC, 5%.

Appeal Court nullifies conviction of Shell MD, others

Editor December 9, 2018 Business, Oil and Gas Leave a comment

The Court of Appeal sitting in Port Harcourt has set aside the order of a High Court of Rivers State which sentenced the Managing Director of The Shell Petroleum Development Company of Nigeria Limited (SPDC), Osagie Okunbor, and two other senior officers of the company to three months in prison for contempt.

The appellate court gave the ruling on Wednesday, November 5, following an appeal of the committal order filed by SPDC.

The High Court had on October 9, 2018, ordered Osagie; SPDC Company Secretary, Nike Oyinlola; and the Managing Counsel for Litigation, Sub-Sahara Africa, Keibi Atemie, to be committed to prison for disobeying a 2008 judgement of the High Court to forfeit the land on which the Bonny Oil Export Terminal is built.

But SPDC, in a statement after the committal order, said the company had not disobeyed any court order and had appealed the conviction. “We do not accept that SPDC has disobeyed any lawful order of court and have accordingly appealed this judgement. SPDC has utmost respect for the courts and the laws of Nigeria,” said the SPDC statement.

The Bonny Oil Terminal on Bonny island in Rivers State is a critical national asset in which the Federal Government holds 55 percent interest. The terminal receives crude oil from international and local oil companies through the Trans Niger Pipeline and the Nembe Creek Trunk Line for export.

Oil marketers to get N236bn subsidy claims Dec 14

Editor December 8, 2018 Business, Latest, Oil and Gas Leave a comment

The Federal government said oil marketers would be paid N236 billion out of N348 billion approved by the National Assembly as outstanding subsidy claims on December 14.
The Chief Operating officer, Nigerian National Petroleum Corporation (NNPC) Downstream, Mr Henry Ikem-Obih, disclosed this to newsmen in Abuja on Saturday.

“The Debt Management Office (DMO) will by next week, precisely on December 14, pay oil marketers first part of the subsidy arrears of N236 billion as agreed by both parties.

“We agreed that after the first tranche is paid, the marketers will form committee to work on details of how the next tranche will be paid in 2019 and the last paid in 2020.

“Government is fully committed to pay the first tranche as promised and will be paid through promissory note that will be issued by the DMO,’’ he said.
Ikem-Obih said that oil marketers equally owed government some debt which would not be deducted from the first tranche of payment.

He said that it was unfortunate that Depot and Petroleum Product Marketers Association of Nigeria (DAPPMAN) had issued a counter statement from what was agreed at the meeting held with all stakeholders on Thursday.

It will be recalled that stakeholders in the oil sector held a meeting at the ministry of Finance on Thursday and reached an agreement on how to pay outstanding subsidy claims to marketers.
DAPPMAN on Friday issued a counter statement saying that there was no agreement reached with government because it failed to reach legitimate demands of the association which was that the claims should be paid in cash instead of through the promissory notes.

He said that Independent Marketers Association, DAPPMAN, Major Oil Marketers (MOMAN), CBN, PPPRA, among others were part of the meeting.
“Government is committed to doing what we agreed on and that is why they get the first tranche by next week.

“We have told marketers that what government is doing now is honest and highly transparent,’’ he added.
Ikem-Obih urged Nigerians not to panic as the NNPC and all other stakeholders will ensure that there was no scarcity of the product throughout the yuletide season.

“Currently, we have 55 days of Premium Motor Spirit (PMS) storage in the country which translates to 2.8 million litres in volume and 90,000 metric tonnes of diesel.

“The 90,000 metric tonnes is supplied by NNPC and it’s subsidiary PPMC and we will continue to import,’’ he added
He said that apart from imported products, the Warri refinery had on Thursday started refining products and the Port Harcourt Refinery would soon kick off refining.

This, he said would continue to boost the quantity of product in the country.
Some marketers commended government and assured that they would support efforts towards ensuring smooth supply and distribution of petroleum products in the country.

Alhaji Aliyu Sa’id, Managing Director of AA Rano filling station said that national interest must be upheld and it would be wise for DAPMAN to give government a chance.

“We have enough products and we will not shut down for any reason, we do not want Nigerians to suffer during this period and that is why we are supporting government effort,’’ he said.

Also, managing Director of AYM Shafa filling station, said that they would work to ensure that there was not scarcity of products in the country during the yuletide season.

“We will support government efforts to ensure smooth supply and distribution of products especially during the Christmas season,’’ he added.

Other marketers who promised to ensure free flow of the product in the country include Obat oil PLC, ED Tonimas Nigeria Limited, among others.

NNPC: Why we gave pipeline surveillance contract to Oshiomole’s friend

Editor December 4, 2018 Business, Oil and Gas Leave a comment

The Nigerian National Petroleum Corporation (NNPC) says it couldn’t allow continued attacks on the Trans Forcados pipeline hence the security contract it awarded to Ocean Marine Solutions (OMS).

Ocean Marine Solutions is owned by Idahosa Okunbo, a Nigerian businessman, whom Adams Oshiomole, chairman of the All Progressives Congress (APC), referred to as his friend in a 2016 letter to Ize Iyamu.

In a statement released on Tuesday by the corporation and signed by Ndu Ughamadu, its spokesman, NNPC said the contract is the result of a rigorous appraisal of OMS’s record of performance on the Bonny-Port Harcourt and Warri-Escravos crude evacuation lines.

Trans Forcados is an 87km pipeline with a capacity of 250,000 barrels.

“In 2018, we lost over 60 days of production due to incessant breaches on the TFP despite having a security contract in place,” the statement read.

“In terms of production numbers, this translates to over 11 million barrels of crude oil which on face value equates to over $800m in lost revenue to all the stakeholders in the matrix which includes: NNPC, its Joint Venture partners and the Nigerian Federation.”

Ughamadu said the contract would require that the company bear the cost of any damage to the pipeline, unlike the former contract where the company was exempted from repair costs.

NNPC said it lost 60 days of production under the new contract and spent $32 million on repairs and protection of the pipeline.

According to NNPC, OMS is obligated to engage youths from the community to execute the contract hence youths engaged under the old contract do not have to fear losing their jobs.

On the allegation of non-adherence to due process in the offer of the surveillance deal, NNPC explained that all federal government-approved procurement processes and procedures were followed to the letter.

In 2015, a memo from the Presidency had directed that ex-militants, led by Government Ekpemupolo (aka Tompolo), Mujaheedin Asari-Dokubo and Chief Bipobiri Ajube (aka Gen. Shoot-At-Sight) take over Nigerian waterways and oil pipeline protection from the police and the Nigerian Security and Civil Defence Corps (NSCDC) as from March 16.

Frederick Fasheun, deceased founder of the Oodua Peoples Congress, and Gani Adams were also beneficiaries of the contract.

‘One comma, one semicolon shouldn’t stop investments’ — Saraki hits presidency on PIGB

Editor October 23, 2018 Business, Latest, Oil and Gas Leave a comment

President of the Nigerian senate, Dr Bukola Saraki says one comma, one semicolon, should not stop the level of investments that could come into the country’s petroleum sector.

Speaking at the 24th Nigerian Economic Summit in Abuja on Monday, Saraki said the eight assembly has been focused on passing economic bills, which would drive the economy.

He added that the assembly could have done more if it had the full support of the executive arm of government.

“We have bills that we have sent to the executive that have come back with one observation or comment,” Saraki said.

“The petroleum industry bill is a good example; that should have been an executive bill because of the importance of that bill to the economy, no doubt about that.

“Unfortunately, it wasn’t, we took the responsibility to drive that bill to a place it had never been before over the decades. A lot of people when we started said we could not do it, but we’ve shown we had the political will and commitment to do it.

“We split it into four, and we passed the first one and it went to the executive. What I would have expected considering the kind of work that was done, was for the two arms of government to sit down and because the issues that have been raised are not issues that should stop a bill from passing with all due respect.

“Unfortunately, after so many months, that bill has come back with queries that I think can easily be thrashed out in a day’s session.”

Saraki said the players in the petroleum industry have asked that since the government could not agree on the governance bill, how would it agree on the fiscal bill?

“Our intentuon is to go back to the executive and sit down with them and say, let us drop our partisan hats and look in the interest of Nigeria.

“It has taken a lot of powers from the executive and given more powers t the technocrats, which is what is good to make it more transparent.

“The observations made, I don’t think are enough to stop that bill from passing, because of the impact it will make in investment, because as you know, there is no serious invvestment in the petroleum sector because people are not sure where they are.

“We have a great opportunity because when we started, prices of crude oil was in the 50s, now it is in the 80s, you have problems in places like Venezuela, Iran — I mean it is a golden opportunity for Nigeria to take advantage.

“I don’t think paragragph two, three, one comma, one semicolon here and there should prevent this level of investment. It is a great opportunity for investment, and if we didn’t get it right, I think it is to lock ourselves up in a room and sit down and address those issues.”

PIB: NNPC calls for simplified fiscal terms

Editor June 4, 2018 Business, Oil and Gas Leave a comment

The Nigerian National Petroleum Corporation (NNPC) has urged the Senate to consider simplifying the fiscal provisions in the Petroleum Industry Fiscal Bill (PIFB) to ensure easy implementation of the law.

Group Managing Director of the corporation, Dr. Maikanti Baru, made this submission during the Senate Joint Committee Public Hearing on the Petroleum Industry Fiscal Bill (PIFB), Petroleum Host and Impacted Communities Development Bill (PHICDB) and Petroleum Industry Administration Bill (PIAB) at the National Assembly on Monday.

Represented by the Chief Operating Officer (COO), Gas and Power, Engr. Saidu Mohammed, the GMD alsoadvocated for the inclusion of clauses to make it easy for the law to be reviewed in response to economic, technical and other considerations.

The corporation advocated for incentivizing oil and gas operations to attract investment into the country.

He said there was need to leave out all regulatory issues in the Bill to ensure progressivity and empower the regulatory commission to effectively regulate the industry.

He said NNPC was fully in support of the Petroleum Industry Reform Bill which has now been broken intoregulatory, operational and administrative segments for easy passage.

Going down the memory lane, the GMD said the original Petroleum Industry Bill was borne out of the Federal Government’s desire to put in place a robust and desirable legislation to engender transparency, accountability and fairness in the nation’s Oil and Gas Industry.

He noted that although the process of getting the Bill passed had been very challenging, the National Assembly had taken the most practical step to advance its passage by breaking it into phases.

“It is laudable to note that the Governance Bill has been passed by the Legislature while the Fiscal Bill, Administration Bill, and the Host and Impacted Communities Development Bill are going through legislative processes.

“NNPC appreciates the opportunity to review these bills and we have employed our deep expertise and experiences in the Industry to assess their provisions and will gladly make contributions that will not only enforce the desires of the National Assembly but will ensure that the reform bills when passed into law meet the expectations of Nigerians and investors alike,” Dr. Baru stated.

Earlier, the Lead Senate Committee Chairman, Senator Kabiru Marafa, said the public hearing on the three (3) bills was the first time that the National Assembly was sponsoring the bills in bits and pieces for easy consideration and speedy passage of regulations that would lead to the reform of the Nigerian Oil and Gas Industry.

It would be recalled that the Federal Government, some years ago, sponsored the Petroleum Industry Bill as an executive bill to establish the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum Industry.

Oil hits $80 as Shell declares force majeure

Editor May 17, 2018 Business, Oil and Gas Leave a comment

Oil prices hit $80 a barrel on Thursday for the first time since November 2014 just as Shell Petroleum Development Company (SPDC) declared a force majeure on the exports of Nigeria’s major crude oil, the Bonny Light.

A pipeline leak is responsible for around 250,000 barrels per day (b/d) taken off the country’s crude exports dampening the gains of the oil price spike.

Brent crude, the international benchmark against which Nigeria’s crude oil is set, briefly hit $80.18 before pulling back to trade up 57 cents at $79.67 per barrel, Reuters reported.

US West Texas Intermediate (WTI) crude futures were up 41 cents at $72.30 a barrel, also their highest since November 2014.

As of Monday, Brent was up 20 cents at 77.32 dollars a barrel, while US West Texas Intermediate rose 10 cents to 70.80 dollars.

Mohammed Barkindo, secretary general of the Organisation of the Petroleum Exporting Countries (OPEC), attributed the development to efforts by OPEC and non-OPEC countries to re-balance the market through production freeze.

He said general, global inventories of crude oil and refined products dropped sharply in recent months owing to robust demand and OPEC-led production cuts.

“We have now been implementing this decision (declaration of cooperation) for the past 17 months with visible positive outcomes that have been widely acclaimed around the world,” Barkindo had said at the 22nd Oil & Gas Uzbekistan (OGU) conference on Wednesday.

Meanwhile, a spokesman for SPDC said that the force majeure was due to disruption in production following a leak discovered on the Nembe Creek Trunk Line, located in Rivers State.

“SPDC declared force majeure on Bonny Light exports effectiveky 08.00hrs, May 17, 2018 following the shutdown of the Nembe Creek Trunk Line (NCTL) by the operator, Aiteo Eastern E&P Company Ltd,” the spokesman said.

Force majeure refers to a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happen.

The incident came barely 24 hours after the senate passed the 2018 budget that was anchored on an oil production of 2.3 million b/d and an oil price assumption of $51 per barrel.

Cutting off 250,000 b/d of the Nigerian crude from the international market is sure to trigger a further hike in global oil prices.

Trump berates OPEC for ‘artificially’ high oil prices … Barkindo responds

Editor April 20, 2018 Business, Oil and Gas Leave a comment

US President Donald Trump has accused the Organisation of Petroleum Exporting Countries (OPEC) of “keeping oil prices artificially very high.”

In tweet, Trump said the cartel’s pricing cycle “will not be accepted” as there is no scarcity of oil supply to warrant such “high prices.”

But OPEC secretary general, Mohammad Barkindo, in a swift response, said the US oil and gas industry benefits from the cartel’s efforts to restore stability in the market.

He was speaking from Jeddah, Saudi Arabia.

“We in OPEC pride ourselves as friends of the United States who have vested interest in their growth, development and prosperity,” he said, adding that OPEC, non-OPEC deal “has not only arrested the decline but rescued the oil industry from imminent collapse and is now on course to restore stability on a sustainable basis in the interest of producers, consumers and the global economy”.

Oil prices recorded slight increase on Friday ahead of a meeting by members of the joint OPEC and non-OPEC ministerial monitoring committee (JMMC) meeting, same day.

As at Thursday, OPEC daily basket price stood at $70.96 a barrel, compared with $69.39 on Wednesday, according to calculations by the secretariat.

But West Texas Intermediate (WTI) crude, rose to $68.53 a barrel on Friday, from $68.29 a barrel on the New York Mercantile Exchange on Thursday.

Similarly, Brent crude, the global benchmark inched above the $73 mark on Friday, the highest since 2014.

Expectations are high that the OPEC and non-OPEC JMMC gathering will announce a specific timeline for further extension of its production cap agreement.

CNBC reports that Trump’s agitation may be fueled by news that major oil producers may be targeting much higher oil prices.

Saudi Arabia, a key OPEC member, has conveyed desire to see crude prices at around $80 or even $100 a barrel.

This is partly due to the kingdom’s planned initial public offering of Saudi Aramco, its state oil company.

Speaking in an interview withBloomberg TV, Barkindo said “geopolitical tensions in the Middle East (Iran) have brought back a premium to crude oil prices”.

According to him, “it wouldn’t be in the interest of producers or consumers to see a price shock” if Iran leaves the cartel based on US “re-imposed” sanctions.

NNPC cuts cost of producing crude oil $20 per barrel

Editor March 5, 2018 Business, News, Oil and Gas Leave a comment

The Nigerian National Petroleum Corporation (NNPC) has brought down the cost of producing a barrel of crude oil to $20, even as it now targets producing the black gold at $15 per barrel.

NNPC Group Managing Director, Dr. Maikanti Baru, who disclosed this Monday in Abuja during the NNPC Day at the ongoing Technology and Innovation Expo 2018, attributed the feat to the impact of science, technology and efficient work processes, saying the mileage would enable more revenue generation to the Federal Government.

The Expo 2018 has the theme: Fast Tracking Sustainable Development of Nigeria Through Science and Technology in Abuja.

Represented by the Chief Operating Officer (COO), Gas and Power, Engr. Saidu Mohammed, the GMD noted that the NNPC had been innovative and efficient in its various operations to drive down the cost of production of crude oil and gas.

Dr. Baru said the NNPC was not only participating in the Science Fair but was also in full support of the ideals behind the event, stressing that science and technology is the bedrock of the Oil and Gas Industry.

The GMD stated that the corporation had succeeded in domesticating engineering, procurement, construction and most of the major activities of the Oil and Gas Industry, adding that heading to London to prepare mere tender documents for engineering, procurement and construction belonged to the distant past.

“Today we have fully domesticated the engineering, procurement and construction aspect of the Oil and Gas Industry and we are working hand-in-hand with the Nigerian Content Development and Monitoring Board (NCDMB) to get Nigerians who are willing to invest and innovative to propel this country going forward to go into the ventures of fabrication where we spend the big chunk of the money in the industry. In other words, we have gone far to domesticate procurement,” Dr. Baru stated.

He explained that today, there were fabrications going on in the areas of valves, line pipes, stressing that Nigeria has also gone into fabrication of vessels.

Dr. Baru disclosed that NNPC would continue to support all sorts of innovations in the upstream, midstream and downstream sector.

Commenting on the Ajaokuta-Kaduna and Kano pipeline project, popularly referred to as AKK pipeline project, the GMD stated that the pipelines of the project were fully domesticated in line with the local content policy of the Federal Government, saying for the other areas of services required, Nigerians would do all the pre-commissioning and commissioning services of the project.

On the refinery revamp, the GMD disclosed that already the NNPC was training some Nigerians that would be fully engaged in the refineries revamp, stressing that tremendous amount of jobs and services that would be required would all be provided by Nigerians.

The GMD stated that the NNPC was committed to promotion of efficient consumption of energy in the mold of biofuels, adding that already the corporation has signed four Memoranda of Understanding (MoU) with different State Governments and investors to actualize the introduction of more environmentally friendly fuel.

Italian court postpones trial of Shell, Eni after ‘show of shame’ by Nigeria

Editor March 5, 2018 Business, Latest, Oil and Gas Leave a comment

An Italian court has postponed to May 14 the trial of Royal Dutch Shell and Eni executives over alleged corruption in Nigeria.

The trial was originally expected to start in a Milan court on Monday but the judge said due to a high number of cases, it would be transferred to another chamber to avoid further delays.

The trial will now begin on May 14.

The case involves the 2011 purchase by Eni and Shell of Nigeria’s OPL-245 offshore oilfield – one of Africa’s most valuable oil blocks – for about $1.3 billion.

Eni — also charged with corruption in Algeria in a separate trial — and Shell stand accused of handing out bribes during the 2011 purchase of OPL245, an offshore oil block estimated to hold nine billion barrels of crude, for $1.3 billion (1.06 billion euros).

Prosecutors said bribes were paid to win the licence to explore the field, which has never entered into production.

Meanwhile, Human Environmental Development Agenda (HEDA), one of the activist groups that sparked off the trial, has said it was shocked and deeply disturbed by the “confused appearance” of the federal government in court on Monday.

In a statement by Olanrewaju Suraju, its chairman, HEDA said “while we applaud the action of the Federal Government to intervene in the case, the presence of two lawyers with contradictory instructions was an embarrassment and presents Nigeria in a poor light before the Milan Court”.

“We were further shocked that one of these lawyers, Mr Sedu, declared his intention not to ask for damages from Eni,” Suraju said.

“There is now a very real risk that both instructed lawyers will not be recognized by the court, leaving the FRN out in the cold.

“Powers of Attorney to represent Nigeria should not be handed out like confetti. The Attorney General must explain why he has so disastrously mismanaged Nigeria’s intervention, potentially losing the chances of recovering billions of dollars in compensation to Nigeria.

“HEDA is calling on the President of Nigeria, Mr. Muhammadu Buhari to, as a matter of urgency, call his Attorney General to order, considering the what happened today in Milan and adversary actions of the AGF in the recent past.”

NNPC fuel import gulps $5.8bn — but scarcity persists

Editor February 20, 2018 Latest, Oil and Gas, Politics Leave a comment

The Nigerian National Petroleum Corporation (NNPC) on Tuesday said it has spent $5.8 billion to import 9.8 million metric tons of petrol since late last year to combat the fuel crisis.

Mainkati Baru, NNPC group managing director, said at the public hearing held by the senate committee on public accounts in Abuja that the corporation had to carry out the massive importation after private fuel marketing companies abandoned the trade because of the high landing cost of the fuel.

This, he said, made cost recovery and profitability difficult owing to the regulated price regime.

“This is in fulfilment of (NNPC’s) statutory role of supplier of last resort to ensure that Nigerians do not suffer as a result of product unavailability,” a statement from the corporation quoted Baru as saying.

The NNPC boss, however, pointed out that cross-border smuggling owing to price disparity between Nigeria and neighbouring countries where a litre of petrol sells above N350 per litre as well as logistic issues in trucking products to different locations across the country remained serious challenges in the quest for fuel queue-free situation in the country.

Nigeria, Africa’s biggest oil producing country with over 2 million barrels per day of output, imports more than 85% needs of its PMS needs because of inadequate local refining.

Ibe Kachikwu, minister of state for petroleum resources, said on Tuesday the government was working on plans to bring in private sector investment in the repair and management of the refineries and get them up to about 90% of capacity.

“That process is almost completed now, probably in a matter of weeks, we will be announcing the winners,” he said.

“We want to get the private sector to be major investors in building new refineries.”

We won’t sell the refineries, Kachikwu insists

Editor February 20, 2018 Business, Latest, Oil and Gas Leave a comment

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu says the federal government will not sell its refineries.

Rather, the aim is to make Nigeria the refinery corridor for the rest of the continent, he said.

The minister was speaking on Tuesday on the short and medium term priorities directed towards growing the country’s oil and gas industry at the Nigeria International Petroleum Summit in Abuja.

According to him, a dearth in oil and gas infrastructure had affected the sector’s refining capacity which birthed an infrastructural map by government to address all the defects in crude pipeline and their leakages, depots and all related aspects.

He reaffirmed that rather than selling off Nigeria’s ailing refineries, the federal government will ramp up investments such that new refineries will be built across the country.

“The President (Muhammadu Buhari) has made it clear that he was not going to sell the refineries, because if we sell them, we are going to be selling them as scraps,” he said.

“So the model we came up with is to bring in private sector investment in the repair and management of the refineries and get them up to about 90% of capacity.”

“That process is almost completed now, probably in a matter of weeks, we will be announcing the winners.”

The minister continued: “We want to get the private sector to be major investors in building new refineries.

“There are two or three modular refineries that are ready to come up.

“Agip is working towards final investment decision (FID) on 100,000 barrel per day (bpd) refinery in Bayelsa state, and of course there is the Niger Republic Refinery that we are discussing- also a 100,000 bpd potential.

“The objective is to make Nigeria a refinery corridor in Africa.”

On Monday, Kachikwu had said that Nigeria targets to raise its domestic refining capacity from 14% to 90% between the next 18 to 20 months.

He said the vision is to have Nigeria refine most of its crude locally rather than exporting them.

Nigeria not worried about falling crude oil prices, says Kachikwu

Editor February 15, 2018 Business, Latest, Oil and Gas Leave a comment

Minister of State for petroleum resources, Dr Ibe Kachikwu says Nigeria is unruffled by the slide in crude oil prices, maintaining that the country can comfortable ride the storm with oil prices hovering between $60 and $70 a barrel band.

The global crude oil market had been rattled recently on the back of mounting fears of another supply glut with the Brent crude, the international benchmark of crude oil, shedding $5 during the past eight days of trading.

But with Nigeria’s oil production on the ascendancy, the federal government believes the oil price band for now will not create another shock for the economy.

Kachikwu, at a world press conference on Thursday in Abuja, said rather than the oil prices, what the country and oil producing companies should be worried about is that of keeping production cost low.

“I don’t think we need to be panicky about it, we hit $70 per barrel in December which was a surprise to all of us. We are not ruffled by it. I know it has come down to highest $60s now,” the minister said.

“We were producing 2.07 million b/d at the end of January was at 2.07 million b/d, with crude oil alone averaging 1,707,294 million b/d. So we are not rattled at all by the decline in oil prices, but to focus on production costs.”

The 2018 budget is anchored on oil price assumption of $45 a barrel and production benchmark of 2.3 million b/d.

The Organisation of Petroleum Exporting Countries (OPEC) had reached an agreement with non-member countries in November to reduce crude supply to the market in the bid to boost prices.

Prices recovered from as low as $40 a barrel to a high of $71 a barrel at the end of January this year.

However, a surge in shale oil output by the US has threatened to overturn the gains of the historic accord between OPEC and non-OPEC countries.

Kachikwu, however, said it is not yet time for OPEC to press the panic button.

“The recent drop in oil prices was still insignificant to worry OPEC,” he said.

“But I have always said that OPEC needs to just focus on itself and what it needs to do, and forget what is happening in shale.

“Every OPEC producer must work hard to be a least cost producer because the truth is that if Shale can produce at $65, there is absolutely no reason why we should be struggling. So, upper $60s is not too bad, we moved from $27 and $28, let’s not begin to complain, it is a bit too early. These things fluctuate.”

Kaduna refinery ‘shut down over unavailability of crude oil’

Editor January 28, 2018 Business, Latest, Oil and Gas Leave a comment

The Kaduna Refining and Petrochemical Company (KRPC) shut down operations on January 15 due to the non availability of crude oil.

Abdullahi Idris, executive director, services, of KRPC, disclosed this to NAN in Kaduna.

He said the refinery, whose fuel plant was commissioned in 1980, was functioning at 60 percent capacity “but shut down on January 15 due to unavailability of crude oil”.

Idris responded to an e-mail NAN sent to him to provide details of the company’s operations as part of a national survey on the state of the country’s refineries operated by the Nigerian National Petroleum Corporation (NNPC).

The EDS said the lubes plant was commissioned in 1983 and the petrochemical plant in 1988.

According to him, before it was shut down, the KRPC produced four million litres of petrol (PMS) per day.

Idris explained that the plant was also producing 2.5 million litres of (AGO) diesel and 1.6 million litres of kerosene per day.

The official said the plant had undergone a turn around maintenance (TAM) in 2013 and currently has a workforce of 1,004 staff.

However, a source at the Warri Refining and Petrochemical Company (WRPC) told NAN that it was incorporated in 1988 following the merger of the Warri Refinery and Ekpan Petrochemical Plants.

According to the source, WRPC, one of the subsidiaries of the NNPC, produces at installed capacity of 125,000 Barrel Per Stream Day (BPSD).

“The WRPC was incorporated in 1988 following the merger of the Warri Refinery and Ekpan Petrochemical Plants which was producing a nameplate capacity of 100,000 BPSD,” the source was quoted as saying.

“Following the merger, WRPC is now designed to produce installed capacity of 125,000 BPSD,.”

The source, however, declined comment as to whether the company was currently refining or not.

Deduct N27bn from $2bn you owe us, oil marketers tell FG

Editor December 29, 2017 Business, Latest, Oil and Gas Leave a comment

Oil marketers on Thursday asked the Federal Government to deduct the N27bn they owed the Nigerian National Petroleum Corporation from the $2bn that it owed them.

The marketers stated that the petrol scarcity being experienced across the country would have been averted if the NNPC had listened to their warnings in October that there was a drop in supply of Premium Motor Spirit (petrol).

On Wednesday, the NNPC attacked the Depot and Petroleum Products Marketers Association over the statement by DAPPMA that its members had no petrol in their tanks despite the corporation’s claims of importing millions of litres of petrol.

The national oil firm also stated that DAPPMA members owed it the sum of N26.7bn for products received from it, adding that the statement credited to the association on the fuel supply situation, especially PMS, was very unfortunate.

But while speaking on a television programme monitored by our correspondent in Abuja on Thursday, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, asked the government to deduct the marketers’ debt from the $2bn it owed the oil dealers.

He said, “I know they (NNPC) were referring to DAPPMA, but talking about who is owing who, this is all about trade; we are always buying from the NNPC to sell. So sometimes, we owe and other times we are in credit, but the truth is that the government is owing us.

“And we have agreed with the government since June that when you (government) are going to pay us, deduct whatever we are owing you. Collectively, marketers in the industry are owed close to $2bn, so you can’t compare it to N27bn. It is not only the NNPC that we are owing.”

He added, “We owe other government agencies, but we are saying that let’s start from the biggest and that is the fuel subsidy, the interest and the foreign exchange. We’ve done several reconciliations supervised by the Chief of Staff (to the President) and the Federal Ministry of Finance.

“So nobody is saying we are not owing, rather the government is owing us more and they should pay us and deduct whatever we are owing them.”

When asked why oil marketers were hoarding and diverting petrol as claimed by the Group Managing Director of the NNPC, Dr. Maikanti Baru, the MOMAN spokesman stated, “I wish we could meet face-to-face and I will tell him (Baru) when the problem started and when we started warning.

“I’d stated in the past that if you leave the NNPC as the sole importer of products, you will get to a point where the slightest shock will create a problem. The truth must be told, they (NNPC) are just getting the supply in some appreciable quantities. The supply dropped in October up until some two, three weeks ago; that’s the truth!”

Olawore added, “Supply into the system dropped and somebody must own up to this. I’m not here to pass any blame; we are here to see how we can solve the problem and after that, we can sit at the table to look at what went wrong and how to prevent it from happening again. But we all saw it coming.

“We saw it coming and we said it that your suppliers are defaulting; they are not supplying enough.”

NNPC lied, we didn’t owe it – DAPPMA

Meanwhile, DAPPMA on Thursday accused the NNPC of lying when it claimed that its members owed the national oil firm N26.7bn.

According to DAPPMA, its members have in the past one month paid over N90bn for petrol supply but have yet to receive any cargo from the Petroleum Products Marketing Company, a subsidiary of the NNPC.

The Executive Secretary, DAPPMA, Mr. Olufemi Adewole, said it was unfortunate for the national oil firm to attack and accuse marketers falsely.

In a statement signed by Adewole on Thursday, the association said, “It is an undisputable fact that DAPPMA members have paid for petrol supply (with bank funds) for over one month, the value of which is in excess of N90bn, yet the PPMC/NNPC had no cargo to allocate to them. As such how can we be held responsible for hoarding?

“The PPMC/NNPC does not transact business with DAPPMA members on credit; hence, we are not aware of any indebtedness to the PPMC/NNPC by our members. We again reject any attempt to blame marketers for the shortfall in supply as it is not our making since the NNPC has been the sole importer since October 2017.”

Adewole said marketers had continued to sacrifice to keep the country wet with fuel despite over N600bn debt owed DAPPMA members and over N800bn owed the different marketers’ groups as a whole by the Federal Government.

He stated, “The essence of our initial press release was to shed light on salient issues surrounding the shortfall in current petrol supply, which is presently solely handled by the NNPC. It was not an attempt to join issues with the PPMC/NNPC with whom we are partners.

“The NNPC’s view of our press release stating our side of the story and seeking to defend marketers for the very first time against the unwarranted accusations of hoarding and profiteering is rather unfortunate.”

The association, however, assured Nigerians that all possible steps were being taken to cooperate with the PPMC/NNPC to eliminate fuel queues nationwide in the next few days.

Amidst the confusion, queues by motorists for petrol in Abuja and neighbouring states of Nasarawa, Niger and Kaduna failed to disappear, as some filling stations were said to be collecting illegal “gate fees” before allowing vehicles to drive in to purchase PMS.

In Lagos, the Director, Department of Petroleum Resources, Mr. Mordecai Ladan, commended the load-out history of Nipco Plc since the resurgence of petrol scarcity across the country, with the firm increasing the trucking of the product across the country.

The DPR boss, who made an unscheduled visit to the Nipco terminal in Apapa on Thursday, said he was impressed with the load-out and the assurances by the company’s management on hitch-free product loading as supplies from the NNPC improved significantly.

Mordecai, who was received by the company’s Chief Operating Officer, Mr. Suresh Kumar, and the Chief Corporate Affairs Manager, Mr. Taofeek Lawal, said his team was on tour of depots to ascertain the availability of product stocks.

Earlier, Lawal had informed the DPR team that the company had in stock 17,000 metric tonnes of petrol or approximately about 23 million litres courtesy of supply by the NNPC via the Apapa jetty on Wednesday.

Oil price crosses $65 per barrel mark

Editor December 12, 2017 Business, Latest, Oil and Gas Leave a comment

Brent crude oil price s jumped above $65 per barrel after the shutdown of the Forties North Sea pipeline knocked out significant supplies from a market that was already tightening due to OPEC-led production cuts.

Brent crude futures on Tuesday, the international benchmark for oil prices, were at $
65.07 dollars a barrel at 0211 GMT.

U.S. West Texas Intermediate (WTI) crude futures were at 58.21 dollars a barrel.

Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed.

“The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank.

The jump in Brent prices widened its premium to WTI prices, making U.S. oil exports more attractive.

Nigeria’s oil revenue exceeds 2017 benchmark by 18% – NNPC

Editor November 28, 2017 Business, Oil and Gas Leave a comment

The Nigerian National Petroleum Corporation (NNPC) says oil revenue in the first ten months of the year exceeded the 2017 budget oil benchmark of $44.50 per barrel by 18 per cent.

Ndu Ughamadu, NNPC’s spokesperson, made this known in a statement on Monday.

Mr. Ughamadu said that the corporation’s Group General Manager, Corporate Planning and Strategy, Bala Wunti, disclosed this during a presentation to the House of Representatives Joint Committee on 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The disclosure, the statement said, revealed that oil has sold at an average of $52.49 per barrel between January and October, adding that the 18 per cent recorded above budget benchmark was due to stability in the crude oil markets and various geopolitical dynamics around the world.

The statement also explained that the federal government’s oil production target of 2.3 million barrels per day (mbd) in the 2018 budget was realistic and achievable, adding that the price projection of $45 per barrel was conservative and based on price scenarios of $35 at the lowest, $45 at the medium and $55 at the highest.

Mr. Wunti, the statement said, stressed that most price forecasting agencies were of the view that the medium price scenario had the highest probability of occurrence on which the 2018 budget was hinged upon.

The NNPC official added that the current production capacity in the country was more than 2.3mbd but due to the insecurity in the Niger Delta region, full production capacity had not been achieved over the years.
“The 2018 crude oil national production projection for the joint ventures, modified carrier arrangements or external financing, production sharing contracts, independents, marginal fields and service contracts is about 2,298,000 barrels per day,” he said.

The statement noted that Mr. Wunti expressed worry about oversupply of oil in the international market, adding that the outlook for the market was reassuring given the positive global economic growth and improved compliance by member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and Non-OPEC members with production cuts.

On crude oil production from January to October 2017, Mr. Wunti stated that average output stood at 1.885mbd, put at 86 per cent of the budgeted target of 2.2mbd.

He, however, blamed the shortfall on Niger Delta security-related factors and vandalism of key export infrastructure, including the Trans-Forcados Pipeline (TFP), Forcados Oil Terminal (FOT) export line, Nembe Creek Trunk Line (NCTL) and Trans Niger Pipeline (TNP).

NNPC to announce core investor for Benue bio-fuel project soon — Baru

Editor November 26, 2017 Business, Oil and Gas Leave a comment

The Nigerian National Petroleum Corporation (NNPC) says it has almost concluded discussion on the choice of a core investor for the proposed bio-fuel plant in Benue.

The Group Managing Director of the corporation, Dr Maikanti Baru, said this in a statement issued by Mr Ndu Ughamadu, NNPC Group General Manager Public Affairs Division in Abuja on Sunday.

Baru, after a follow-up meeting with a Benue State delegation led by Dep. Gov. Benson Abounu, said arrangements had been finalised to name the prospective investor in the weeks ahead.

Represented at the meeting by the Chief Operating Officer, Ventures Directorate, Dr Babatunde Adeniran, Baru explained that the core investor would provide 70 per cent of the required funding for the project.

According to Baru, the Benue State government and the NNPC will take up the balance equity contribution.

He said upon completion, the plant was projected to generate about one million direct and indirect jobs for the populace, noting that the project would help link the energy sector with the agricultural sector through the commercial production of bio-fuels from selected energy crops.

The NNPC boss listed other components of the project to include a sugar cane feedstock plantation of about 20,000 hectares; a cane mill and raw/refined sugar plant capable of producing 126,000 tonnes annually.

According to him, it also includes a fuel-ethanol processing plant with production capacity of 84 million litres annually.

“The bio-fuels projects will also help to establish the bio-gas cogeneration power plant which will generate 64 MW; a carbon dioxide recovery and bottling plant that will produce 2, 000 tonnes annually as well as an animal feed plant that will produce 63, 000 tons annually.’’

The statement also quoted Abonu, Benue deputy governor as saying “Benue State is offering the 20, 000 hectares of irrigable land space along the bank of the river Benue as its equity contribution to the project’’.

“In addition to a yet to be specified tranche of funds to shore up its stake to the level of directorship in the yet to be constituted board.’’

Abonu also commended the NNPC on the strides so far recorded, and assured that the state government had since taken concrete measures to sensitise the host communities on the bio-fuel project.

According to the deputy governor, the state government has also sensitised host communities to ongoing effort by the corporation for fresh hydrocarbon found in the Benue trough.

NNPC: 34 firms bid for pipeline security services

Editor October 30, 2017 Oil and Gas Leave a comment

As part of efforts to consolidate on the successes recorded in the steady supply and distribution of petroleum products across the country, the Nigerian National Petroleum Corporation (NNPC) has mapped out strategies to boost security around its depots and pump stations to ensure they remain functional.

Managing Director of the Nigerian Pipeline and Storage Company (NPSC), Mr. Luke Anele, stated this during a bid opening exercise for the selection of firms to provide security services at the company’s depots and pump stations across the country, a statement from the NNPC said today.

Represented by the NPSC’s Executive Director in charge of Pipelines, Mr. Danladi Ahmed, the MD stated that the NPSC was desirous of engaging reputable and competent security firms to safeguard its critical assets to ensure unimpeded operations and efficient service delivery.

“This particular exercise avails us the opportunity to identify competitive offers from companies that are competent and ready to secure our assets such as depots and pump stations at competitive rates. The NPSC assets are wide spread nationwide, which means security is important, if you have anything of value, you must provide security to safeguard it,” Mr. Anele stated.

NPSC is a midstream subsidiary of the NNPC in charge of depots and pipelines.

The MD stated that the bid opening was conducted openly in the full glare of representatives of the bidding companies to demonstrate the NNPC’s commitment to transparency and due process in all its activities.

He assured the bidders of a level playing ground that would guarantee the emergence of the best companies among them.

A cross section of participating companies who witnessed the event expressed their satisfaction with the conduct of the exercise, describing the Corporation as a transparent company that operates according to the dictates of best global standards.

Mr. Dozie Tassie who represented Pentagon Securities Ltd, described the bidding process as credible and satisfactory, adding that everybody was given the opportunity to compete fairly.

“NNPC demonstrated that it was committed to global best practices. Now that everybody has been given the opportunity to verify that the documents they submitted were not tampered with and the names of participating companies are made known, there won’t be cases of people raising eyebrows when winners emerge because they have witnessed the process and could testify that no company was smuggled in. NNPC is doing a fantastic job, it is a step in the right direction,” Mr. Tassie enthused.

While applauding the efforts of the NNPC GMD, Dr. Maikanti Baru, the Managing Director of Goldlight Security Ltd, Chief John Eke, stated that he saw transparency and due process in action during the bidding exercise.

“What I have seen today gladdens my heart. There is due process and transparency in place. The GMD and the MD, NPSC and those involved in the entire process deserve commendation. In fact, it shows that the NNPC is going places” a highly elated Eke stated.

A total of 34 firms bidded for the security services out of the 54 companies that were invited for the jobs through selective tendering.

The public opening of bid is part of the Corporation’s commitment to transparency as a Focused, Accountable, Competitive and Transparent organisation, conducting its business with Integrity (FACTI).

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