The Nation Newspaper

Tag: oil production

  • MOSOP to Fed Govt, Shell: cease talks on resuming oil production in Ogoni

    The Movement for the Survival of the Ogoni People (MOSOP) has given the Federal Government and the Anglo/Dutch oil giant, Shell Petroleum Development Company of Nigeria Limited (SPDC), a seven-day ultimatum to cease engagements on resuming oil production in Ogoni.

    It vowed to resist the divide-and-rule tactics of SPDC and the Federal Government, through the Nigeria Petroleum Development Company (NPDC), the oil production arm of the Nigeria National Petroleum Corporation (NNPC).

    MOSOP, through its President, Legborsi Saro Pyagbara, yesterday at a news conference at its secretariat, off Ken Saro-Wiwa (formerly Stadium) Road, Port Harcourt, declared that their actions could ignite  conflict and violence that would skirt the forceful attempt to return to in Ogoniland’s four local governments of Khana, Gokana, Tai and Eleme.

    Shell was sent packing from Ogoniland in 1993. A renowned environmentalist, Ken Saro-Wiwa, and eight activists were hanged at Port Harcourt Prisons on November 10, 1995, during the regime of the late Gen. Sani Abacha.

    Shell’s spokesman Joe Ollor Obari said: “SPDC stopped oil production in Ogoni in1993 and has no plan to return to oil production there.”

    The umbrella organisation of Ogoni people said: “In the course of the Ogoni struggle, over 2,000 were killed by the invading military, 14 Ogoni communities were decimated and destroyed, and many Ogoni people fled into exile. Ogoni refugees are still held up in Benin Republic and seek sanctuaries in other parts of the world.

    “In recent months, there had been intense and deliberate attempts by the oil industry to return to Ogoni oilfields through the back door.”

     

     

  • Govt urged to boost oil production for growth

    The Federal Government will generate enough revenue to implement the budget and meet other fiscal responsibilities when it ramps up oil production, stakeholders have said.

    The Chief Executive Officer, Abuja Power Station, Mr Jameel Jammal and the President, International Institute of Energy and Law, Prof Wunmi Iledare, who spoke to The Nation, said with increased oil production, government would be able to get enough money to implement the budget.

    They said if the government would be able to meet 80 per cent to 90 per cent of its targeted oil production, it would be able to get money to drive the economy.

    Jammal said sustained peace in the Niger Delta region is necessary if the government wants to achieve meaningful economic growth. He said it is through the region that the economy derives the highest percentage of its earnings. The country would stop contending with bad economy once crude oil production improves significantly. Meeting fiscal responsibilities would not be difficult once the production of crude oil peaks, he added.

    Iledare said happenings in the region go a long way in determining the outlook of the economy. He said Nigeria depends on crude oil for sustenance, therefore, it needs to foster growth in the Niger Delta region.

    According to him, growth in the nation’s petroleum industry is dependent on the twin issues of peace in the Niger Delta and increased oil production, adding that once peace is sustained in the region, the government will be able to achieve its goal of having improved revenue from crude oil.

    He said: “No doubt, the industry is facing the twin problems of reduction in the production of crude oil and violence in the Niger Delta.  The issues have impacted negatively on the industry and the country, which relies on oil for sustenance. Now that the price of crude oil is appreciating, the Niger Delta people must allow peace to reign in order to achieve optimal production.”

  • Kachikwu advocates Nigerian first in crude oil award

    Kachikwu advocates Nigerian first in crude oil award

    • Seeks five years timeline transformation plan

    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu on yesterday plans to ensure that Nigeria is investors’ first priority and that the nation also gives its citizenry first priority in the award of crude oil contracts: Direct Supply Direct Purchase (DSDP).
    He also revealed the plans to strategize for Nigeria to ‘capture’ of all African and Asia investments in the industry.
    The minister noted that owing to the saturation of the market in the US and other continents, Nigeria has to plan for product and regional specialization which is the  competitive advantage in the industry.
    He spoke in Abuja during the 6th Sustainability in the Extractive Industries (SITEI) conference that was organized by CSR-in-Action with the theme: “Building Local for Global.”
    Kachikwu insisted that Nigeria must secure investments for every quantum of oil and gas that is extracted in the two continents.
    According to him, Nigeria will on Monday host 19 African Oil Ministers in order to develop a relationship that will culminate in harnessing the potentials of the African oil and gas industry market.
    His words: “Nigeria is going to look at Nigeria first. What do we do to encourage Nigeria to participate in terms of incentives. It in this line, for example, you are going to have product specialization, sector specialization. We look at the areas we have competitive advantage in trade if oil and gas.
    “Why is it that up till now Nigeria has not been able to capture the African terrain of the market. We will still look at how we award our contracts so that the crudes whether it is the DSDP formulation, whether it is investments. What we are doing now is to bring together the African producers.
    “How do we ensure that the African market is first….By Monday we will be hosting the conference of 19 African Petroleum Ministers. The whole idea is to begin to put together the relationship net that will enable us to look at the African market.
    In the current very competitive environment you have to become sectoral in terms of regional  play.
    “There are new places springing up in terms of regional play. The only regions available are Asian and Africa. How do we ensure that every drop of oil that comes out Africa first of all comes to Nigeria? Every drop of gas that comes from Africa comes to Nigeria. These are the things that we and Angola are to decide. We are supposed to capture  that market. We are going to put together the resources.”
    The minister said for Nigeria to open its economy to foreign investors, it has to tackle security issue with the involvement of state policing and broader protection.
    According to  him, Nigeria needs to favour the local industries and every industry needs to be transparent.
    Kachikwu however called for consistency in policy formulation and vigilance in terms of  international conspiracy.
    Continuing, the minister submitted that : “In ending this, I will call for a five year time frame in which we strengthen our resource base, our economic base and getting our companies ready for international play. If we follow some of the things we have highlighted here we will begin to transform our economy.”
    He said that unless there is a deliberate approach to address the issues in the industry, transformation will not come by happenstance.
    In her address, the Convener and Founder of CSR- in -Action, Bakeme Masade, noted that Nigeria has allowed too many resources and potentials in the industry to fritter away.
    He said that this is the best time to galvanize resources towards establishing a framework that encompasses environmental management, human rights, community engagement and management of economic opportunities.

  • MOSOP: why Ogoni’ ll not allow resumption of oil production

    The Movement for the Survival of the Ogoni People (MOSOP) has declared that the people of Khana,  Gokana, Tai and Eleme will not allow resumption of oil production in their areas without broad-based discussion with the masses.

    It called on the Nigerian Petroleum Development Company (NPDC) to stop attempts to re-enter Ogoniland, through the back door.

    A communiqué  yesterday by the MOSOP President, Legborsi Saro Pyagbara issued at the end of the Ogoni special congress at the Peace and Freedom Centre, Bori-Ogoni, MOSOP said: “To consolidate and stabilise the peace in the area (Ogoni), the Rivers State government is called upon to initiate, as soon as possible, a process for the rehabilitation and reintegration of the repentant cultists.

    “Congress calls on the Rivers State and Federal Governments to increase security facilities in the area (Ogoni), including personnel and equipment for intelligence gathering and immediate response to crimes.

    “Congress charges all sons and daughters of Ogoni, particularly traditional rulers, politicians and the youths, to work assiduously and collaboratively with security agencies to stamp out criminal gangs from our (Ogoni) communities.”

    The umbrella organisation of Ogoni people expressed its appreciation to Rivers Governor Nyesom Wike for extending the amnesty programme to repentant cultists in Ogoni.

    It lauded the roles played by different individuals, organisations, churches and the immediate chairmen of the four Ogoni LGAs in restoring peace in the troubled land.

    MOSOP said: “Congress urges HYPREP (Hydrocarbon Pollution Remediation Project) to make public its work programme, to enable people of Ogoni communities and other stakeholders to follow up on the implementation of the UNEP (United Nations Environment Programme) report.

    “Congress calls on HYPREP to immediately embark on the implementation of emergency measures, particularly as they relate to provision of water, health evaluation of Ogoni people and the training of the youths and women.”

     

  • Nigeria’s oil production per barrel costs over $20

    Nigeria’s oil production per barrel costs over $20

    The cost of producing a barrel of oil in Nigeria  at over $20 is very high and uncompetitive compared with what other oil-producing countries, the Group Chief Executive Officer of Oilserv Limited, Mr. Emeka Okwuosa, has said.

    He said oil production at above $20 per barrel couldn’t be profitable with appropriate cost management. He lamented that the cost of production per barrel in Nigeria is very high at above $20.

    Okwuosa, who spoke to The Nation on the sidelines of the Offshore Technology Conference in Houston, Texas, United States (U.S.), said the fall in oil price is not Nigeria’s problem but that the problem is that of undue cost of production which makes operation uneconomic. He said the rise and fall in oil price was normal in the  industry and should be expected.

    The Oilserv chief said: “On low crude oil price, what is important to be noted is that oil price never remains the same. It goes up and down and it is driven by market forces, which is basically demand and supply. In some cases, geopolitical forces too. What is important is cost of production.

    “In Nigeria, when cost of production presently goes beyond $20 per barrel, it becomes a problem. Compare this with Saudi Arabia where in some of their engagements, production is about $8 per barrel. When crude oil price is even $15 per barrel, they are still making profit. But in Nigeria, at $20, you cannot do anything but to shut down. You can’t spend more than you are getting.

    “The main problem is cost of production. When  oil price is at $40 per barrel depending on how your industry works,it may still manage it. If it is at $80 per barrel, it is a plus, but it comes with a caveat because the higher the cost of crude, the higher the cost of production because there is this tendency that when oil price is $100 per barrel, exploration and production (E&P) companies will take more risks. Embark on expensive projects because there is money.

    He also noted that there is need to drastically reduce the frame in tendering processes of oil and gas contracts as such lengthy periods add to cost escalation. So efforts should be made by relevant agencies to reduce tendering processes in Nigeria to be at par with other countries of the world.

    He said: ”I’m not sure that it is the government. I think it has to do with owners of the projects. Whether it is the Nigerian National Petroleum Corporation (NNPC) or the international oil companies (IOCs), which in this case you have National Petroleum Investment Management Services (NAPIMS) being the major partner that controls things. It’s about making a conscious effort to put up a process that fits for purpose. When you start a tender and the tendering process goes beyond six month, you are in a different territory. You have a situation where inflation may have changed, and prices may have changed. Some tendering processes take up to 18 months. That should end, it requires concerted efforts. You have heard the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu say that it has to end. There is need for concerted efforts to streamline the process of tendering to make sure that it is done within a shorter time and that requires directive from the minister, and it is driven down from there.”

  • Otakikpo field to boost oil production by 8,350 bpd

    Green Energy International Limited (GEIL) will soon increase crude oil output by 8,350 barrels per day (bpd). The firm is set to begin production from its Otakikpo marginal field in oil mining lease (OML) 11, it was learnt.

    Otakikpo is in a coastal swamp of Rivers State. It is located approximately 60 kilometres Southeast of Port Harcourt, Rivers State.

    Green Energy, in a statement in Abuja, by its Technical Director, Mr. Bunu Alibe, said the planned commencement of crude oil export followed the successful completion of Maximum Efficiency Rate, (MER) test on the production wells of the Otakikpo marginal field supervised by the Department of Petroleum Resources (DPR).

    He said following the success of  the test, the Otakikpo field has been given a technical allowable rate (TAR) of 8,350 barrel of oil per day (bopd) from the four strings in two wells – Otakikpo 2 and Otakikpo 3 for the first quarter of this year.

    In addition, the company, he said,  has been given the commercial allowable rate (CAR) of 5,000 bopd for February this year by the crude oil marketing department of the Nigerian National Petroleum Corporation (NNPC).

    According to Alibe, the field has the capacity of adding about 10,000 bopd to the national production when operational.

    He said: “Having successfully completed its pipeline from the field to six kilometres offshore in preparation for crude evacuation through a shuttle tanker and finalised its Crude Handling Agreement (CHA) with Amni International Petroleum Development company, GEIL has recently secured an Evacuation Permit from the regulatory body to enable it move its crude to Ima terminal operated by Amni.”

    Other milestones achieved by the company, according to Alibe, include the approval of its Field Development Plan and the installation of its processing facility, while it has also completed an onshore storage facility of 45,000-barrel capacity.

    He said the company and its Technical Partner – Lekoil Oil and Gas Investment Limited, were poised to follow through all processes of crude oil export before the end of the quarter.

    Alibe explained that as part of its commitment to uplift the socio-economic status of the host communities, the company was embarking on the immediate installation of six megawatts electricity plant while ensuring that the Trust Fund set up to finance development projects and managed by the community, are adequately funded.

    He expressed the company’s appreciation to all regulatory agencies and other stakeholders for their support in bringing the field to production. He also thanked the technical partner and its employees for their efforts in achieving the milestones. According to Alibe, under a farm out from Shell Petroleum Development Company, Joint Venture (SPDC JV), the Federal Government awarded the marginal field to Green Energy, which it designated as the Operator, to implement the company’s innovative Small Scale Gas Utilisation Programme (SSGUP).

    Otakikpo field was identified as one of the suitable sites for a pilot programme that offers unique solution to utilize the gas from the field for power generation, and liquefied petroleum gas (LPG), production for domestic cooking.

  • Delta community to shutdown oil production over leader’s detention

    Nigeria’s desire to benefit from the recent OPEC decisions has come under threat with the arrest and detention of the chairman of Ogulagha community, Capt. Solomon Prebor by members of Joint Task Force (JTF).

    Consequently, members of the community who are searching for their chairman are warning that the continued detention of their chairman might lead to a shutdown of economic activities including preventing SPDC from accessing its facilities in the community.

    A letter written to the Chief of Defence Intelligence and copied to the IGP and the Commandant of Naval base Warri made available to The Nation shows that members of Ogulagha community are unhappy over they consider the illegal detention of their chairman.

    The letter written by Sir Victor E. Akpoguma warned that “No economic activity is going on in the community. The fragile peace being enjoyed in Ogulagha and its environ is in danger if being disrupted by the action of Naval personnel.”

    Akpoguma in his letter added that “the arrest and continued detention of the chairman is meant to set a cat among pigeons a d disrupt the community on account of the huge sum of money expected to be paid by SPDC to the Ogulagha community for its rental of the Forcados terminal.”

    A team of armed JTF members were said to have stormed the community when they were holding a crucial meeting and whisked away the Chairman to Warri on Monday with the promise to release him.

    Our correspondent learnt that the whole community came together to petition him to IG police and was invited to the police headquarters and the issue was tabled by another officer as IG was engaged in the rerun election of River State on the appointment date.

  • Nigerian oil production at historic low, says OPEC

    Nigerian oil production at historic low, says OPEC

    Militant attacks in the Niger Delta region have pushed Nigerian crude oil production to its lowest level in more than a decade, a report from the Organisation of Petroleum Exporting Countries (OPEC) has said.

    The body, in its last month’s report, said Nigerian output slumped to levels not seen in over a decade on the back of a wave of militant activity.”

    It said the country’s crude oil production for May averaged 1.4 million barrels per day, down 15 percent from the previous month, adding that crude oil production averaged 1.8 million bpd during the fourth quarter of last yearThe International Monetary Fund (IMF), in its latest survey, said the challenges for Nigeria’s economy are “substantial” in view of the fact the country relies heavily on crude oil production for sustenance. The body estimates that Nigerian economy will decline for the rest of the year, while inflation runs close to 10 percent, adding the government’s deficit has doubled and total exports are down roughly 40 percent.

  • Nigeria’s oil production dips to 900,000 per barrel

    Nigeria’s oil production dips to 900,000 per barrel

    Months of militant attacks on pipelines and oil infrastructure in the Niger Delta region have crippled production in Nigeria, Africa’s largest producer of crude.

    Militant group Niger Delta Avengers NDA has vowed to reduce Nigeria’s economy to “zero.”

    Exports, according to Voice of America (VOA) analysts, have fallen from about 2.2 million barrels per day to as low as 990,000 barrels per day, making Angola Africa’s largest producer of oil, at least for now.

    The drop in production and the low price of oil globally are major reasons why Nigeria is expected to enter a recession in coming months.

    Gail Anderson, research director at energy research and consultancy group Wood Mackenzie, says the militants have been careful in their sabotage.

    “The attacks themselves have been well-targeted and they’ve been designed to cause maximum damage, and I think they’ve been quite successful in that respect,” Anderson said.

    The NDA came out with a blog that took credit for a number of attacks on pipelines in the Niger Delta. It also listed demands, including apologies from politicians, the release of an imprisoned separatist leader and a redistribution of ownership of oil blocks.

  • Kachikwu: Nigeria’s oil production falls to 1.4m bpd

    Kachikwu: Nigeria’s oil production falls to 1.4m bpd

    Nigeria’s oil production has fallen by almost 40 per cent to 1.4 million barrels a day due to militant attacks on facilities in the Niger Delta region, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said.

    Traders said crude alone was down to just over one million barrels per day (bpd), with condensates bringing the total close to 1.4 million bpd, Reuters reported.

    According to the report, Kachikwu said efforts would be made to engage with people in the area. President Muhammadu Buhari has extended a multi-million dollar amnesty signed with militants in 2009, but upset them by ending generous pipeline protection contracts.

    Angola’s crude was slow to trade due to more limited demand from China. China’s independent refiners have switched to buying more oil from Africa and Latin America instead of large volumes of Russia’s ESPO crude as they have struggled to cope with the excess light fuels that come with processing the grade.

    Exxon was expected to ramp up Qua Iboe production early this week. The grade is under force majeure, with production down by as much as 250,000 bpd.

    Production of Nigeria’s Bonny Light, Escravos and Forcados are lower than planned due to militant attacks, while Qua Iboe was down after a drilling rig damaged a pipeline.

    Bonny Light cargoes were still trading, and sources said they were loading with roughly five days of delay.

    Angola plans to export 1.74 million bpd in July on 56 cargoes, up from June’s planned 53 cargoes of 1.7 million bpd.

    There are roughly 10 June-loading cargoes left, according to traders, including Dalia, Pazflor, Kissanje and Plutonio. PetroIneos sold a cargo of Girassol to Total, traders said. Prices were not available.

    Limited Chinese demand has kept cargoes from trading more quickly, and demand overall was subdued despite outages in Nigeria and Canada, a source said.

    Uruguay’s ANCAP issued a tender to buy crude oil for delivery from July 19-23.

    Last week, Indian Oil Corporation bought 4-5 million barrels of oil from Shell and Statoil via a tender for July loading, but did not take Qua Iboe or Bonny – grades it often selects. It instead purchased others such as Agbami and EA, a trader said.

    Managing Director of Seplat Petroleum Development Company, Austin Avuru had stated that it is output from deepwater oil fields that are run under the production sharing contracts (PSCs) as production from Joint Venture (JV) assets have declined due to funding and security issues.