The Nation Newspaper

Category: Business

  • Nigeria raises OPEC’s December output to 30.37m bpd

    Nigeria raises OPEC’s December output to 30.37m bpd

    Increased oil production from Nigeria contributed to raising the Organisation of Petroleum Exporting Countries’ (OPEC’s) December 2012 output to an average of 30.37 million barrels per day (mbpd), indicating a decline of 0.46 mbpd from 30.83 mbpd recorded in November, report has shown.

    OPEC, in its January 2013 monthly oil market report, said secondary sources revealed that total OPEC crude oil production averaged 30.37 mb/d in December showing a decline of 0.46 mb/d over the previous month.

    “Crude oil output saw an increase from Nigeria and Angola while production fell in Saudi Arabia, Iraq, and Iran,” the report said.

    According to the report, preliminary data indicates that global oil supply dropped 0.10 mb/d in December 2012 compared to the previous month. The decline in OPEC crude oil production in December impacted the global oil output which was partially offset by the increase in non-OPEC supply. The share of OPEC crude oil in global production declined slightly to 33.6 percent in December. The estimate is based on preliminary data for non-OPEC supply, estimates for OPEC natural gas liquids (NGLs) and OPEC crude production from secondary sources.

    The market report said that in 2013, non-OPEC supply is forecast to increase by 0.93 mbpd over the previous year to average 53.92 mbpd. The current supply expectation indicates an upward revision of 85,000 bpd to total non-OPEC supply, while anticipated growth was revised up by 30,000 bpd from a month earlier. The upward revision to total non-OPEC supply was due to the carry-over of some of the revisions introduced to the 2012 supply estimates, as well as to various updates to individual supply profiles. On a quarterly basis, non-OPEC supply is expected to average 53.84 mbpd, 53.61 mbpd, 53.91 mbpd and 54.49 mbpd, respectively.

    The reports also noted that global fiscal uncertainties still persist. It said: “For the past weeks, the outcome of negotiations in the US to avoid the ‘fiscal cliff’ – a term that describes the automatic spending cuts and tax increases set to take place at the beginning of 2013 – has been a major uncertainty hanging over the United States economy. Despite recent data showing an improvement in the country’s economy, the lack of clarity about the outcome of these talks over the past months led to a deceleration in business spending and investments at the end of the year, as well as a decline in consumer confidence.”

    On world oil demand, the report said: “World economic turbulence has affected oil demand in the past few years. Nevertheless, its effect on this year’s oil demand is not expected to be as sharp as last year, but instead considerably milder. As in the previous year, oil demand will grow in 2013, but not without some degree of uncertainty. The US economy is seen to achieve 2.0 percent growth, leading to more stable oil consumption.

    “The Euro-zone was able to somewhat contain its unknown fate of uncertainty. The spill-over effect on other economies will certainly be felt, especially in China. Given the positive momentum in some Organisation of Economic Cooperation and Development (OECD) economies, China’s exports and investments are picking up and showing better results. The OECD region will consume less oil than last year; however, the decline will be reduced by almost a half.

    “The non-OECD region will consume about one million barrels per day more than last year. It is worth noting that some parts of the non-OECD region will experience less economic prosperity than anticipated. Their demand will grow, but at a slightly slower pace than last year. The transportation and industrial sectors will consume most of the oil this year, and most of the growth will be related to both industries.”

  • Emirates upgrades services

    Emirates Airlines will add more than 1,400 seats a week on its Dar es Salaam-Dubai route by introducing a Boeing 777-300ER aircraft from February 1.

    The Airbus 340-500 deployed on one of Dar es Salaam’ daily flight, according to a statement, will be replaced with a larger Boeing 777-300ER, giving 40 per cent boost to seat capacity.

    “Dar es Salaam is one of East Africa’s most popular destinations and the introduction of the new Boeing 777 is a direct response to increasing passenger demand on this route,” said Jean Luc Grillet, Emirates Senior Vice President Commercial Operations for Africa. “Emirates carried 148,000 passengers on flights to and from Dar es Salaam in 2012. With the new Boeing 777 service we expect this to noticeably grow as our customers continue to explore the opportunities Emirates’ global network has to offer.”

    The new aircraft, according the statement, has 360 seats in a three-class configuration offering eight luxurious First Class suits, 42 seats in Business Class and generous space for 310 passengers in Economy Class.

    In addition to carrying more passengers, the operation of the new aircraft will also have a positive impact on Tanzania’s import and export industry.

  • US replaces airport scanners

    The Transportation Security Administration (TSA) has said it is removing controversial full-body scanners at United States’ airports and replacing them with new scanners that allow greater privacy.

    The TSA cancelled a contract with Rapiscan last week because the company had failed to deliver software to protect the privacy of passengers.

    The TSA had faced widespread complaints from travellers that the Rapiscan equipment, using an X-ray technology called backscatter, had shown what looks like a naked image of passengers’ bodies to security officers.

    A TSA spokesman, David Castelveter, said they would be largely replaced by a scanner made by L-3 Communications that uses so-called millimetre technology. The radio wave device creates a generic outline that highlights the body area where an anomaly is detected.agencies, he said.

     

  • ‘Why work on Oshodi-Apapa expressway is slow’

    Inability of the Federal Government to offset the outstanding N1.6 billion debts owed Borini Prono Construction Limited – the contractor handing the Oshodi Apapa Expressway – is responsible for the slow pace of work on the road, a Director in the construction firm Mr Nastari Claudio, has said.

    He said the provision of the funds would accelerate the completion of the dilapidated portion of road.

    Speaking last week during a joint inspection tour of the road, which had in attendance the Minister of Transport, Senator Idris Umar and Minister of State for Works, Alhaji Pateh Alli, Mr Claudio lamented that the project would have been completed within 18 months if funds had been released.

    ‘’We are asking for the provision of enough funds in order to speed the pace of work at the site, though we are working, but of course fund is an issue.

    “The project would have been completed in May 2013, but we cannot achieve this date because of lack of payment and it is very difficult to complete the project at the end of May 2013. We have N1.6 billion outstanding, which represents 30 per cent of the work we have done so far, therefore, to complete the road will be very difficult,’’ Claudio said.

    Another staff member of the construction company,Osareme Osakwe, said some portions of the road would be patched, adding that drainage work is still ongoing.

    The Minister of State for Works however, assured the construction firm that funds would be available this week.

    He called on the construction firm to ensure that the road is completed before the end of May 2013, stressing that the visit has yielded the desired result.

    Fielding questions from reporters, Senator Umar said the inspection was on the directive from President because of his concern for the Apapa-Oshodi expressway.

    Prof Monye said efforts were being made to clear the roads leading to the port, noting that the road has deteriorated.

    He said: “What we saw at Apapa is an eyesore and this will strengthen Mr President to clear the road and also fix it.

    “But what we are seeing is the final phase of the clearing-up operation, we also have very good discussion with the Lagos State government about what to do with the ‘setbacks’ and if you look at the ‘setbacks’regardless of what we do on the road, if we do not tidy up the ‘setbacks’, then it will remain untidy.”

     

  • Journalists’ Estate residents appeal to Tambuwal, others

    Residents of Journalists’ Estate in Arepo, Ogun- State  have appealed to Speaker of the Federal House of Representatives, Rt. Hon. Aminu Tambuwal and the Sokoto State Governor Alhaji Aliu Wammako,  to redeem  their pledges  for the completion of the estate’s community  centre.

    The duo, along with Ogun State Governor Ibikunle Amosun, had pledged to contribute towards Journalists Estate Residents Development Association’s (JERDA’s) initiative in building an ultra-modern community centre for residents of the estate, planned to be the first of its kind in Africa.

    JERDA  had embarked on an appeal fund during the tuning of the sod of the community centre by Tambuwal where Wammako was the special guest of honour on an occasion held with pomp and pageantry.

    Tambuwal, who represented by Hon. Olumide Osoba, a lawmaker representing Obada-Owode Federal Constituency, pledged that Tambuwal would donate to the project.

    The Sokoto State Commissioner for Information, Hon. Danladi Bako, who represented the state governor pledged to support the project with an initial N5million and monitor the project till completion.

    Amosun, who was represented by the Works and Housing Commissioner and his Information Commissioner, Messers Lekan Adegbite and Alhaji Yusuf Olaniyonu also pledged N5 million.

    Amosun has since redeemed his pledge. ButWammako andTambuwal have not.

    In a chat with select reporters at Arepo last week shortly after the vandalism of Nigeria National Petroleum Corporation (NNPC) pipeline by some oil thieves, Chairman of the Estate, Mr Gbayode Somuyiwa, said the first phase of the community centre would soon be decked, adding that work has progressed tremendously since the foundation laying ceremony last year.

    However, he lamented that the delay being encountered  was due to paucity of funds because some of the supporters and promoters of the project were yet to redeem their pledges.

    Commending the donors’gestures, Somuyiwa appealed to Wammako and Tambuwal not to renege on their promises, adding that all hopes of residents lie in the pledges.

    “I want to specially appeal to our donors and supporters, especially Governor Wammako and Tambuwal to come to our aid as quickly as possible as we cannot afford to abandon this project’, he said.

    Somuyiwa, who acknowledged that these personalities are great Nigerians for identifying with such a noble cause, said other state governments could also learn from the governor of Ogun State.

    He expressed JERDA’s appreciation to the Ogun State governor for the prompt redemption of his pledge. He urged the governor not to relent until the project is completed.

     

  • ‘NNPC has no business asking for loan’

    ‘NNPC has no business asking for loan’

    The proposed $1.5 billion loan by the Nigerian National Petroleum Corporation (NNPC) from some local and international creditors has been receiving criticisms from Nigerians who query the rationale behind the loan.

    The Managing Director, Degeconek Nigeria Limited (DNL), a hydrocarbon assets development company, Biodun Adesanya, said it is hard to understand what could have informed the decision of the corporation to go borrowing despite the huge earnings from oil and gas.

    He said there was no reason for NNPC to go cap in hand to foreign lenders, requesting for subvention to meet its debt obligations.

    He said: “There is enough reason to believe that NNPC can’t go bankrupt for it to seek for loan from international creditors. First and foremost, oil price is currently attractive enough for oil producing countries such as Nigeria to rake in huge revenues from oil sales.

    From these revenues, any incurred expenditure can be met. So if this is so, how on earth would anybody want us to believe that NNPC is borrowing owing to its inability to meet its debt obligations? This is absolutely untenable and incredible.”

    Besides, he said, there are enough activities arising from the Joint Ventures (JVs) and Production Sharing Contracts (PSCs) operations to make the corporation buoyant to fulfil any of its financial requirements and demands.

    The petroleum geologist, said what NNPC realises from its JVs and PSCs operations are sufficient enough to help perform its statutory responsibilities as a national oil company and wondered why it could seek for funds in this circumstance.

    “We must understand the fact that NNPC as a corporation generates revenue from its joint operations with international oil companies. If we add what comes from its JVs and PSCs, there is no denying the fact that it has no reason not to stay afloat and meet whatever financial challenge that confronts it,” he said.

    Despite all these favourable conditions, Adesanya said it may not be out of place to assume that lack of a culture of accountability and transparency by the corporation may have been responsible for its current state of financial status to warrant such loan.

    But the House of Representatives in response to public criticisms of the move, has called for explanation from NNPC on why it is seeking for a facility after it had earlier claimed it was not insolvent. It therefore, instructed its committee on public account to wade in and scrutinise the corporation’s books to uncover the malfeasance perpetrated over time which may have made the corporation cash strapped.

  • NIESV to hold Ekpenyong Memorial Lecture Jan. 31

    Members of the Nigeria Institution of Estate Surveyors and Valuers (NIESV) will hold the 19th John Wood Ekpenyong Memorial Lecture at the Civic Centre, Lagos on January 31.

    According to a statement, the lecture will provide the institution’s leadership an opportunity for self-evaluation and to address national development issues in the industry.

    Ekpenyong, in whose memory NIESV instituted the lecture in 1995, was the first Nigerian to qualify as a chartered surveyor/estate surveyor and valuer.

    NIESV’s President, Mr Emeka D. Eleh, will declare the lecture open while Mr Joseph O. A. Idudu will chair the event. Idudu, Chairman, NIESV’s Board of Trustees and the 11th President of the institution, is the immediate past Chairman of Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON).

    National Publicity Secretary of the institute,  Mr  Victor Ayeye, said Chairman, ESVARBON, Mr A. G Sangosanya, will deliver the main lecture entitled: ‘Honesty and devotion in Nigeria’s transformation agenda’.

     

  • Need to keep pipeline vandals at bay

    Need to keep pipeline vandals at bay

    Just when we thought the nightmare was over, the country is back to square one. And if we look at the mirror, the picture says it all – the problem is us. Sure we are the architects of our own misfortune. Where else on earth do you see man inflicting pain on himself but in Nigeria? Man’s inhumanity to man!

    As last year petered out, there was pipeline inferno at Ije-Ododo in the Ojo area of Lagos. Preceding that was an explosion in Arepo, Ogun State which culminated in the gruesome murder of four officials of the Nigeria National Petroleum Corporation (NNPC). To the uninformed; those events were part of the Nigerian circus. People always steal oil, vandalise pipelines, even burn themselves to death and the show continues.

    The NNPC did not see it that way, nor did motorists. NNPC Group Managing Director (GMD) Andrew Yakubu saw a crisis coming. Efforts were made to fix the damaged pipelines. At the same time, the vandals were bent on frustrating any such attempts.

    It did not take long to notice fuel lines. Repair works meant consumers had to undergo stress. Kudos to the NNPC, Yuletide of 2012 was not as torturous as it was in 2011 when the Federal Government increased the pump price of Premium Motor Spirit (PMS) from N65 per litre to N140. Although some greedy marketers adjusted their metres slightly, there was enough fuel to celebrate and calm the polity.

    About this time last year, fuel scarcity and price hike almost led to our own version of the Arab Spring. And just when we started singing Hosanna, trouble came up again from Arepo, the sleepy town that houses the largest Journalists’ Estate in Africa.

    The filling stations became chaotic again because thieves went wild again. The NNPC could also have gone mad. What can make a sane mind go mad more than having to spend time and money doing the same thing all over again? The job of the NNPC GMD now entails visiting damaged pipelines every now and then instead of managing other more pressing oil matters.

    The vandals have brought more pains to Nigerians. It’s instructive that the NNPC went to work immediately to repair the pipelines. If the flow had not been stopped, Arepo would still be burning. If the NNPC had continued to pump fuel, nobody would be in Arepo. If not for the immediate intervention of the NNPC, Lagosians would have been suffering by now.

    It is sad that money that should be used for other things is being pumped into pipelines repairs because thieves continue to vandalise our common asset. As repair works progress, the economy suffers, man-hours are wasted in search of fuel, commuters are forced to pay more and food prices also go up.

    We may always try to blame the NNPC for all our oil woes. At this time, I think we should tell ourselves the truth. The job of the NNPC is not just about burst pipelines. And we should also not restrict their intervention to fire brigade approach. I am sure with the Petroleum Intervention Bill (PIB), oil business will eventually turn out to be good business.

    •Aburime is a Lagos- based accountant.

  • ‘Non-passage of PIB, oil theft killing petroleum industry’

    ‘Non-passage of PIB, oil theft killing petroleum industry’

    Stakeholders in the oil and gas industry foresee grave uncertainty in the sector. They say the non-passage of the Petroleum Industry Bill (PIB), oil theft and vandalism of pipelines and other facilities, are gradually killing the industry, that urgent measures need to be taken to move the sector forward. EMEKA UGWUANYI, Assistant Editor (Energy) reports.

     

    The direction of the oil and gas sector this year remains a conjecture. Despite assurances from the government that Nigerians should expect a better year, stakeholders think otherwise. They said the non-passage of the Petroleum Industry Bill (PIB) is detrimental to growth of the petroleum industry.

     

    Upstream

    The immediate past President of the Nigerian Association of Petroleum Explorationists (NAPE), Dr. Mayowa Afe, expressed disappointment that the government has been unable to draw a pathfinder for sustainable growth of the oil and gas industry. He said the non-passage of the Petroleum Industry Bill (PIB) is killing the industry and makes Nigeria a laughing stock outside this shore.

    For the industry to witness a change this year, he said: “The ongoing ridiculous grammar about the Petroleum Industry Bill must stop. The Executive, Legislature, Judiciary and other stakeholders must find a way to end this unnecessary debate and tussle over PIB.

    “In my view, the PIB is being politicised. This unpatriotic approach to a very important national issue is not giving our country a good image outside the shores of this country.

    “Investors are moving their investments out of this country while potential investors are diverting to other countries. Oil companies are moving to other neighbouring countries – Ghana, Angola, Mozambique and even the war-torn Somalia, among others because of the uncertainty surrounding the future of Nigeria’s oil and gas industry.

    “I must tell you that the oil companies in Nigeria currently are just sustaining production in-country to use the money made from here (Nigeria) to invest in oil and gas blocks they acquired outside Nigeria.

    “We want to see activities in Nigeria’s oil and gas industry increased, more exploratory and development wells come on board. Kidnapping in the industry must end even if it entails engaging more youths in the Niger Delta region on sustainable basis. Crude theft, vandalism of oil facilities and unreliable regulations must end.”

    On investment, Afe said the way the industry is going, investors may at a point lose interest in Nigeria completely. Major oil companies in Nigeria are divesting their assets and reinvesting proceeds from such divested assets in other countries.

    He said: “Investors will be hesitant to put down their money in any investment and any country if there are no dependable regulations and platforms to ensure the safety of the environment and their investments.

    “The 10 per cent for oil producing communities in the Niger Delta as provided in the PIB makes sense. Certainly, it will tremendously help to achieve security aspirations of the industry and give the expected safe investment environment.

    “If the PIB is not passed as soon as possible this year, it will be a killer for Nigeria’s oil and gas industry,” he added.

    A petroleum lawyer and solicitor who practises in the United Kingdom and Nigeria, Ms. Efuru Nwapa-Obua, said for the industry to move away from where it is, some anomalies must be addressed.

    She said: “The Industry lacks effective regulatory institutions and is bogged down by gross corruption, mismanagement, poor governance and inefficiency. The fuel subsidy scam in which trillions of dollars were fraudulently paid out to marketers who falsified records with the active connivance of government officials and regulators is a case in point. The scale of the fraud is as mind-boggling as it is audacious and could have only happened in an industry with very weak, or no regulation.

    “Absence of international best practices, transparency, openness, good governance and corporate social responsibility, should be addressed. Inability of the sector to provide the nation with petroleum products is a situation that is disgraceful and unacceptable. Under capacity utilisation of refineries which are producing well below installed capacity must be addressed.”

     

    Downstream

    There are concerns as the country continues to depend on imported fuel. The future of the downstream sector remains unpredictable. According to the stakeholders, because the NNPC is the only company importing products, particularly premium motor spirit (PMS), it is also expected that the downstream would be stable this year considering the stability in supply and distribution recorded last year. Apart from occurrences such as vandalisation of pipelines and strikes by marketers, or oil workers such as the petroleum tanker drivers, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said the Ministry would ensure that there would be adequate supply and efficient distribution of petroleum products this year.

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Andy Yakubu also said the corporation is revamping all dysfunctional fuel depots across the country to actualise the aspiration of stamping out fuel scarcity completely and permanently from the country.

  • Minister angry over delay at ports

    Minister angry over delay at ports

    The Nigerian Ports Authority (NPA) management and some top Customs officials have incurred the ire of the Minister of Transport, Senator Idris Umar, over last Thursday’s long queue at the Apapa port.

    They have been asked to explain what caused the queue.

    The Minister is also seeking to know why the port looks like a “disorganised market” despite President Goodluck Jonathan’s efforts to make it user-friendly.

    For almost an hour last week, the minister and his team walked from the gate to APM Terminals office to find out the cause of the delay in the movement of trucks.

    He was accompanied by the Minister of State for Works, Alhaji Pateh Alli; the Senior Special Adviser to the President on Project Monitoring and Evaluation, Prof. Sylvester Monye; the Permanent Secretary in the ministry, Mr Nebolisa Emordi; NPA Managing Director, Mallam Habib Abdullahi and some Customs officials.

    Dissatisfied with the reasons given by NPA and Customs official, the minister released all trucks cleared by Customs, including the ones chained by NPA officials.

    Umar said he was not happy with what he saw.

    President Jonathan, the Minister said, reduced the number of government agencies at the ports to stem congestion, free the port access road, ease cargo clearance, facilitate trade, make the port attractive for business and boost revenue generation.

    Facing an official, he said: “Tell me why the port is disorganised? Why are these vehicles stationed on the main access road to the port? Who chained this vehicle down here to obstruct traffic? This is unacceptable to us. It is unacceptable to this government. This is a very bad situation and we must be very serious in addressing the problem.

    ”It is an embarrassment for me to come to the port and I am not happy. I made some public utterances out of frustration. I cannot understand why the port will continue to operate as if it is a disorganised market. Mr President said we must sanitise the port and we must sanitise it. The Customs is involved, the NPA is involved, the clearing agents are involved, the transporters are involved, the shipping line, everybody needs to cooperate. I am not here to apportion blames but from what I have seen, I am not happy.

    Attempts by an NPA official to explain that they were not responsible for the state of the port was rebuffed by the minister.

    The Minster said: “Everything in the port is under NPA. What is written on the gate? Is it not NPA? You cannot be shifting responsibility for God’s sake. You keep on saying there is no solution to this problem. That is unacceptable to this government.

    “We must be pro-active. The queue is just there, no movement, nothing. The drivers are not inside the trucks and nobody seems to know what is happening.

    “NPA, you own the port. You must not allow this. Anybody who has not finished its documentation must not be allowed to load, not to talk of blocking the access road.”

    Monye told The Nation that the port was becoming “a national embarrassment.” He said NPA seemed to have lost control of the port.

    “NPA needs to have a stronger administrative control because the clearing agents have taken over the port from what we have seen.”