Home » Business » Oil and Gas

Oil and Gas

Politicians want fuel subsidy to continue at all cost – Wale Tinubu

Editor July 2, 2019 Business, Latest, Oil and Gas Leave a comment

Wale Tinubu, Group Chief Executive of Oando Plc, says politicians want the subsidy on crude oil products to continue at all cost.

Speaking on Tuesday at the ongoing Oil and Gas Conference in Abuja, Tinubu called for deregulation of the sector adding that the federal government needs to cease subsidy.

According to the Oando boss, $5 billion that could have been used to finance much-needed infrastructure was spent on fuel subsidy in 2018.

According to him, other critical sectors of the economy, like education and health among others, were in need of funding, adding that such amount expended on subsidy should have been directed to other critical sectors or towards infrastructure development.

“The government has chosen to effectively subsidise the price as a social palliative. Not that I support it, but we spent $5 billion last year on subsidy, which was even more than what we spent on education and housing combined.

“At a population growth rate of 3%, the question is what is the best – to invest in infrastructure or consumption? There is a big debate that has to be made around this and as stakeholders, we absolutely need to champion that debate with the federal government,” he said.

“The politicians want this to continue at all cost, but there is long-term damage we are doing to our country and industry.

“We need to ensure that these subsidies are altered and the downstream sector needs to be commercialised, the refineries need to function and the pipelines need to function

“There is no logic in is transporting our products by road which is extremely expensive.”

Tinubu said stakeholders in the petroleum industry should rise up to support the deregulation of the oil and gas sector to engender growth.

Commending the national assembly for passing the Petroleum Industry Bill (PIB), he urged the federal government to reconsider its passage.

He also hailed the recent appointment of Mele Kyari as the new group managing director of the Nigerian National Petroleum Corporation, describing him as an incredible and astute technocrat.

Oil slips to $71, hit by talk of higher OPEC+ production

Editor April 16, 2019 Business, Latest, Oil and Gas Leave a comment

Brent oil slipped to around $71 a barrel on Tuesday, pressured by expectations of higher U.S. inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts.

Analysts on average expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase.

The first of this week’s stockpile reports is due at 2030 GMT from the American Petroleum Institute.

“We have already seen these inventories going higher in the last week’s print,” said Naeem Aslam, Chief Market Analyst at TF Global Markets in London.

“The rising inventory data has raised many questions for investors – no one wants to see the oil glut again.”

Brent crude, the global benchmark, was down 12 cents at $71.06 a barrel at 0801 GMT. U.S. West Texas Intermediate (WTI) crude gained six cents to $63.46.

While OPEC-led supply cuts have boosted Brent by more than 30 per cent this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.

Oil also fell on Monday after comments from Russia raised concern that the OPEC-led supply-cutting pact may not be renewed.

Russia and the producer group may decide to boost output to fight for market share with the U.S., TASS news agency сited Finance Minister Anton Siluanov as saying.

The Organisation of the Petroleum Exporting Countries and other producers including Russia, an alliance known as OPEC+, have been cutting output since January 1.

They will decide in June whether to continue the arrangement.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Edward Moya, Senior Market Analyst at OANDA.

41bn barrels of crude remain untapped – NNPC boss

Editor March 15, 2019 Latest, Oil and Gas, Politics Leave a comment

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, has stated that more than 41billion barrels of crude oil and 319trillion cubic feet of gas are yet to be discovered in Sub-Saharan Africa.

The NNPC GMD stated that from available information, the African global crude oil and gas outlook remained positive and on the upward trajectory, saying the West Africa as the Sub-Region held the ace in terms of offshore Deep Water exploration hotspots.

Dr. Baru made this disclosure during a special session on Africa, entitled: “Foundations for New Investment”, at the ongoing 19^th CERAWeek Conference taking place in Houston, United States Wednesday.

He stated that a prolific 1.08 bIllion barrels of crude oil find was recently made at the Owowo field, offshore Nigeria.

He called on foreign investors to explore the Nigerian Ultra-Deep terrain which he described as largely untested.

Dr. Baru told his audience that in Nigeria NNPC was currently drilling Kolmani River-II Well in the Benue Trough – one of Nigeria’s several frontier inland Basins with about 400 Bcf of gas expected to be encountered.

The occasion also provided an opportunity for the NNPC GMD to make a case for the domestication of oil and gas technologies within the African continent.

He said: “It is my belief that domesticating these cutting-edge technologies will develop the capacity of our people, improve our economies and emplace our national oil and gas companies on the path of sustainable growth and development.”

According to the GMD, African countries must react positively to the new reality by deploying new policies and stabilize their business environment to attract meaningful investments

He said critical to achieving that for Nigeria was the passage of the four components of the Petroleum Industry Governance Bill (PIGB) which is expected to usher in a new legislation that will not only enhance the investment climate in the country, but also change the fortunes of the nation’s oil and gas business for the better

Baru informed delegates at the conference that the NNPC was opening up its business environment to ensure transparency and accountability in its dealing with all stakeholders

He also lauded the Federal Government for its peace initiatives in the Niger Delta communities which he said had seen the country hitting very high oil and gas production figures in recent years.

Ministers and high level energy executives from Mali, Somalia, Namibia and Uganda were among panelists at the Special Session.

Organised by IHS Markit, CERAWeek is a global platform on energy trends and public policy where over 4,000 oil and gas experts convene annually to debate the future of oil, natural gas, renewable energy, power and new technologies

Arbitration tribunal awards $1.69bn to Nigerian govt over Brass, Forcados crude oil assets dispute

Editor March 9, 2019 Business, Latest, Oil and Gas Leave a comment

An Arbitral Tribunal sitting at the Lagos Court of Arbitration has delivered a landmark Arbitral award in favour of the Nigerian government owned Nigerian Petroleum Development Company (NPDC) Limited in the arbitration between the Atlantic Energy Drilling Concepts Nig Ltd and Atlantic Energy Brass Development Ltd and the Nigerian Petroleum Devlopment Company limited.

The arbitral proceedings was instituted by the Claimants (Atlantic Energy Drilling Concepts Nig. Ltd and Atlantic Energy Brass Development Ltd) on August 15, 2016, with the NPDC as Counter-claimant.

In its Award in favour of NPDC, the Arbitral Tribunal dismissed Atlantic Energy’s claims and awarded the sum of US$1,690,900,391.39, US$200,000 and of N1,500,000 (as costs) in favour of NPDC by the Claimants within 21 days from the date of the Award for crude oil lifted from OMLs 26, 30, 34 and 42 (Forcados Assets) and OMLs 60, 61, 62 and 63 (Brass Assets).

The Tribunal affirmed all the submissions of lead counsel to NPDC, Professor Fabian Ajogwu, SAN, FCIArb of Kenna Partners that Atlantic Energy were indebted NPDC for failure of Atlantic Energy and Atlantic Brass to perform their financial obligations under the respective Strategic Alliance Agreements (SAAs).

NPDC had entered into several Strategic Alliance Agreements with Atlantic on April 20, 2011, May 25, 2011 and 2012 for the development and production of hydrocarbon resources with respect to OMLs 26, 30, 34 and 42 (Forcados Assets) and OMLs 60, 61, 62 and 63 (Brass Assets). The Strategic Alliance Agreements, created obligations for Atlantic to remit to the government the revenues from the crude oil lifted.

Ajogwu in his submission relied heavily on the KPMG Audit Report of the crude oil liftings in OMLs 26, 30, 34 and 42 (Forcados Assets) and OMLs 60, 61, 62 and 63 (Brass Assets); and dwelt on the principle of avoidance of unjust enrichment by the Atlantic Energy of the petroleum assets of the Government owned NPDC.

The landmark decision is one of the single largest Awards ever in a Nigerian Arbitration and also settles the question of impact of non-payment of signature fees on lifted crude oil as well as the principles of Unjust Enrichment in Crude oil lifting and recovery.

Furthermore, the significance of this Arbitration to Nigeria which depends mostly on crude oil for revenue generation and economic development is enormous for the Nigerian economy which is heavily dependent on crude oil revenues.

Atlantic Energy & Atlantic Brass were represented by their Counsel Mr Babatunde Fagbohunlu, SAN, FCIArb of Aluko & Oyebode.

Thenewsmatrics reports that the arbitration resolutions stemmed from controversial technical partnerships facilitated by former Minister of Petroleum, Mrs Diezani Alison Madueke and the Atlantic companies controlled by Nigerian businessmen, Kola Aluko and Jide Omokore in which the Federal Government lost billions of dollars in stolen oil revenues.

Both men have been named in graft and money laundering investigations and charges emanating from the deals, conducted under the Goodluck Jonathan administration ostensibly to increase local participation in oil and gas exploration activities.

While Aluko lives in luxurious exile in Switzerland with some of his assets under watch by US and other authorities, Omokore is facing charges brought by the Economic and Financial Crimes Commission which have not progressed in the court system.

Alison Madueke is currently facing proceedings aimed at sending her back to Nigeria for procecution from self imposed exile in the United Kingdom following the seizure of unexplained multi-million dollar real estate and other assets traced to her.

Analysts believe that the award on lost crude oil revenues may strengthen the resolve of the Nigerian Government in its drive to recover other lost or stolen crude over the years.

NEITI: Nigeria loses $16bn to Production Sharing Contracts

Editor March 5, 2019 Business, Latest, Oil and Gas Leave a comment

The Nigeria Extractive Industries Transparency Initiative (NEITI) said that Nigeria lost at least $16 billion in 10 years due to non-review of the 1993 Production Sharing Contracts, (PSC), with oil companies.

This was one of the highlights of the latest report by NEITI released in Abuja Sunday. It was tagged “The Steep Cost of Inaction”.

It said that the losses were recorded between 2008 and 2017.

The study done in conjunction with Open Oil, a Berlin-based extractive sector transparency group, found that the losses could be up to $28 billion if, after the review, the Federation were allowed to share profit from two additional licences.

NEITI, therefore, called for an urgent review of the PSCs to stem the huge revenue losses to the Federation.

It added that the review was particularly important for Nigeria because oil production from PSCs had surpassed production from Joint Ventures (JV) with PSCs now contributing the largest share to federation revenue.

“Between 1998 and 2005, total production by PSC companies was below 100 million barrels per year while JV companies produced over 650 million barrels per year.

” By 2017, total production by PSC companies was 305.800 million barrels, which was 44.32 per cent of total production.

” Total production by JV companies was 212.850 million barrels, representing 30.84 per cent of total production.” It said.

NEITI stated that the Deep Offshore and Inland Basin Production Sharing Contracts provided for a review of the terms on two conditions.

“The first review was to be triggered, if oil prices exceeded 20 dollars per barrel.

“Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts specifies that: The provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds 20 dollars per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.”

NEITI observed that this review should have been activated in 2004 when oil prices exceeded the 20 dollars per barrel mark.

It added that although the review was not done in 2004, the judgement of the Supreme Court in October 2018 had mandated the Attorney General of the Federation to work together with the governments of Akwa Ibom, Rivers and Bayelsa States to recover all lost revenues accruable to the Federation with effect from the respective times when the price of crude oil exceeded $20 per barrel.

It further stated that the second review was to be activated 15 years following commencement of the PSC Act, where Section 16 (2) states that “Notwithstanding the provisions of subsection (1) of this section, the provisions of this Decree shall be liable to review after a period of 15 years from the date of commencement and every 5 years thereafter”.

The transparency watchdog disclosed that at inception in 1993, the PSC terms were drawn up to attract oil and gas companies to invest in the exploration and production of offshore fields considering the risks involved coupled with low oil prices.

“Thus the PSC contracts were supposedly more beneficial to the companies. However, the Law anticipates that the companies would have recouped their investments when oil price increases and after many years of operations, hence the two trigger clauses in the Act.

“Since the Supreme Court judgement has addressed the condition for the first review, this second review was the focus of NEITI’s Policy Brief.

” This second review should have happened in 2008 and informed why it chose 2008 as the the start date for commencement of estimated losses in the model,” NEITI noted.

It explained that to determine the losses, the analysis was conducted for the seven producing fields of the 1993 PSCs, which are Abo (OML 125): operated by Eni; Agbami-Ekoli (OML 127 & OML 128): operated by Chevron; Akpo & Egina (OML 130): operated by Total and South Atlantic Petroleum; and Bonga (OML 118): operated by Shell.

Others, it said are Erha (OML 133): operated by ExxonMobil; Okwori & Nda (OML 126): operated by Addax; and Usan (OML 133): operated by ExxonMobil.

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.

Page 1 of 212 »

The News Matrics …Online News Portal