The Nation Newspaper

Tag: Oil

  • Oil hits two-month high at $53

    Oil hits two-month high at $53

    Oil prices hit a two-month high yesterday –  thanks to a tightening United States (U.S.) crude market and the threat of sanctions against Organisation of Petroleum Exporting Countries (OPEC)-member Venezuela.

    Brent crude futures were 52.90 dollars per barrel earlier in the day, their highest since May 25.

    U.S. West Texas Intermediate (WTI) futures were up 16 cents or 0.3per cent at $49.87 per barrel.  The entire WTI curve is close to moving back over $50 per barrel, with only September and October a notch below that level.

    The price rise put both crude benchmarks on track for a sixth consecutive session of gains.

    Prices have risen around 10 per cent since the last meeting of leading members by OPEC and other major producers, including Russia.

    At that instance, the group discussed potential measures to further tighten oil markets.

    “U.S inventories are showing massive drawdown, Saudi Arabia seems intent on playing its role as the world’s swing producer.

    “Impending sanctions on Venezuela by the U.S will almost certainly be oil price-supportive,” said Jeffrey Halley, analyst at futures brokerage OANDA.

  • Build refineries where we’ve oil, says Emmanuel

    Build refineries where we’ve oil, says Emmanuel

    Southsouth and Southeast Governors’ Forum Interim Chairman and Akwa Ibom State Governor Udom Emmanuel has said refineries and petrochemical industries should be built where oil is explored.

    “It doesn’t make economic sense to lay sub-sea pipelines from the location where oil is explored to other parts of the nation at a cost of five billion dollars  (about two trillion naira). This amount is enough to build many modular refineries and establish seven industrial parks in the region,” Emmanuel said.

    Explaining  the reason leading to realignment of economic and political forces of the two zones in a statement yesterday, Emmanuel  applauded leaders of the zones for coming together to harmonise their economic interests and pursue inter-regional cooperation and integration.

    “If mature democracies as exemplified by the European Union (EU) could see the economic benefits of coming together, expanding markets and opportunities, I think the decision of the two zones to come together is long overdue and highly commendable.”

    The statement added: “…The ingenuity, creativity, technological wizardry of the people, if  properly utilised and harnessed can point the way towards the development and growth of the region and the nation. The region, in my opinion, represents what California is to the United States and as the saying goes “as goes California so goes the United States. The two zones will insist on appropriating the resources found within its geographical space for the advancement of its strategic interests within the larger Nigeria content. We will demand and insist on the location and utilisation of resources found in our region for the good of our people and the Nigeria. There is no reason why we should be blessed with resources and yet we lack the corresponding federal presence or infrastructure.

    “There is need for our people to look inwards and we, as the leaders, will  attract and encourage our people across the length and crannies of the nation and beyond to come home and invest. It is a new dawn for people of the two zones and we will work together to advance our mutual interest and send a signal to  interested parties that we shall not only be the land that lays the golden egg but we will demand to take part in the making of the omelette”.

  • Army recovers 21 bodies in oil exploration workers rescue operation

    Army recovers 21 bodies in oil exploration workers rescue operation

    The Nigeria Army on  said it has recovered 21 additional bodies in an operation to rescue oil exploration crew abducted by the Boko Haram insurgents in Borno.

    A statement signed by Brig. Gen. Sani Kukasheka, Director Army Public Relations, released in Maiduguri, said that the army recovered vehicles and various calibres of weapons in the operation.

    “So far the search and rescue team has recovered additional bodies of five soldiers, 11 members of the Civilian Joint Task Force (CJTF) and five members of the exploration team.

    “Contrary to reports in some media, six out of the 12 members of the exploration team that went out are still missing, while one of the NNPC staff returned to base alive,” Kukasheka said

    Kukasheka, who described the incident as unfortunate, said that the error emanated from the statement issued by the army on the rescue mission was not ‘deliberate’.

    “The incident of 25th July 2017, where Boko Haram insurgents ambushed our troops including members of the CJTF) escorting some staff of the NNPC as well as that of University of Maiduguri (UNIMAID) on oil exploration in Yesu District of Magumeri Local Government Area of the state is unfortunate and highly regrettable.

    “Most regrettable also is my earlier release on the said incident about the rescue of all NNPC Staff. The error in the statement was not deliberate”.

    It will be recalled that the Nigerian Army had earlier claimed to have rescued all the abducted university’s personnel.

    However, the Vice Chancellor, Prof Ibrahim Njodi, said the army only rescued five dead bodies while four staff were still missing.

    The army spokesman said the Nigerian Army was reputed for timely dissemination of information on its activities in the counter-insurgency operations.

    He reiterated the readiness of the army to always inform Nigerians  of its activities.

    Kukasheka said the army had redoubled efforts in the pursuit of the insurgents to rescue the abducted personnel.

    “Search and rescue is still ongoing to secure the safe return of the remaining civilians.

    “The Nigerian Army condoles with the families of all that lost their loved ones in this unfortunate incident,” the statement said.

    According to him, the army has recovered three of its gun trucks from the insurgents, in addition to four Rocket Propelled Grenade (RPG), four RPG chargers, six AK-47 rifles, one Anti-Aircraft Gun, one General Purpose Machine Gun, one Anti-Aircraft Gun Barrel, one RPG tube, four dane guns, eight tyres and two rims.

    Other items recovered include one pumping machine gun, two tyre jacks, one super battery, five reflective jackets, three Toyota Hilux, four jerry cans filled with petrol, one Motorola radio, one Geographical Positioning System (GPS), 21 empty jerry cans, two shovels and three food coolers.

    Troops also recovered 122 rounds of PKM ammunition, 213 rounds of 7.62mm NATO ammunition, 1255 Anti-Aircraft Guns ammunition, four boxes of API 12.7mm ammunition, one AK-47 Rifle Magazine, a digger, two bows and 13 Arrows, two LLG bombs, assorted drugs and working tools.

    “We are counting on the goodwill and support of the populace in volunteering valuable information that could help in the search and rescue operation”.

  • Nigeria rakes in $2.45b from oil, gas export 

    Nigeria rakes in $2.45b from oil, gas export 

    The Nigerian National Petroleum Corporation (NNPC) raked in a total of $2.45billion from the export of crude oil and gas from May 2016 to May 2017, it said in its May Financial and Operations Report yesterday.

    From the total export receipt, NNPC transferred $2.18billion to the Joint Venture Cash Call (JVCC) in accordance with the Budget and Exit of the JVCC.

    The report added that the corporation transferred the balance of $0.27billion to the Federation Account.

    The NNPC said : “Total export crude oil and gas receipt for the period of May 2016 to May 2017 stood at $2.45billion, out of which the sum of $ 2.18 billion was transferred to the JVCC in line with the Budget and Exit of the JVCC and the balance of $0.27 billion was paid to the Federation Account.

    “This JVCC amount falls short of $8.64billion in the 2016 appropriated amount. This was caused by the production disruption in the Niger Delta and low crude oil prices during the year.”

    According to the report, a total export sale of $272.74 million was recorded in May, 2017.

    The sale, said the report, was $114.71 million higher than the preceding month’s performance of $158.03million when crude oil export sales contributed $133.81 million (or 49.06%) of the dollar transactions compared with $71.81million contribution in the previous month.

    The NNPC noted that the export gas sales amounted to $138.93million in the month. The May 2016 to May 2017 crude oil and gas transactions indicate that crude oil and gas worth $2,712.91million was exported.

     It said : “Total export proceeds of $247.82 million were recorded in May 2017 as receipt against $142.12 million in April 2017. Contribution from crude oil amounted to $123.24 million, while gas and miscellaneous receipt stood at $103.83 million and $0.021 million.”

    The NNPC said : “The 22nd publication recorded remarkable improvement in group performance, in spite of challenging operating business environment which limits profitability.

    “ The May 2017 report indicated a trading deficit of ¦ 3.55billion, representing 32.65% decrease in deficit compared to the previous month’s deficit of ¦ 5.27billion.

  • OMS clears air on crude oil transportation contract

    OMS clears air on crude oil transportation contract

    PPP Fluid Mechanics Ltd, a company that was later acquired by Ocean Marine Security Limited through share purchase agreement, has debunked the claims making its rounds on Social Media that it secure the contract without due process.

    Contrary to reports trending in the social media, OMS noted that it secured the contract for the transportation of crude oil by marine vessels from Escravos Terminal to Warri Refinery through an open international competitive bidding in which 13 other companies participated.

    This is according to a press statement made available to journalists, after OMS, an offshore assets protection company, promoted by corporate titans, Tunde Ayeni and Hosa Okunbo, had come under media searchlight in respect of the crude oil transportation by marine vessels contract which it executed for the Nigerian National Petroleum Corporation, (NNPC), in recent past, with two online publications grossly misrepresenting the terms of the contract.

    For instance, while the reports claimed that the contract was awarded at the cost of $15.4 per barrel, the company disclosed that the contract cost never exceeded $5.68 per barrel while it lasted, and that was inclusive of the provision of dedicated security posts in addition to the transportation of crude oil to the refineries.

    The statement reads: “If only the journalists who did these stories had been a bit more painstaking and cross-checked their facts with NNPC, they would not have come up with this inaccurate and false report,” adding that OMS delivered a total of 65, 597, 698 barrels of crude oil to refineries between 2011 and 2015, the exact figure that was made available at the drilling terminals.

    “Such media claim that OMS delivered less than what it received from drilling terminals is an embarrassing demonstration of ignorance by the section of the media that came up with the report. NNPC has its records of what each vessel loaded and discharged.In any case, if that was true, wouldn’t the present government have summoned the company to come and account for the alleged shortage?”

    “In any case, if that was true, wouldn’t the present government have summoned the company to come and account for the alleged shortage?”

    Contrary to the false claim in the reports that crude oil transportation through the pipeline was deliberately circumvented to yield way to transportation by marine vessels, the facts on the ground indicated that if NNPC did not resort to the vessel option at the time, the refineries would have shut down completely owing to non-supply of crude oil.

    Before NNPC embarked on the marine vessels option of transporting crude oil, a report commissioned by the corporation indicated that it was no longer economical to transport crude oil from Escravos to Warri Refinery through the pipeline as a result of unsustainable expenditure of about $121million for the maintenance and repairs of the Escravos-Warri broken crude oil pipeline. Even at that, this huge expenditure became a regular one which still did not solve the problems associated with transporting crude oil to the refineries through pipelines.

    The report further indicated an estimated 40-60 percent loss of crude oil pumped through the Escravos-Warri pipelines owing to ceaseless pipeline vandalisation and oil theft.

    Another indisputable fact is that before the engagement of PPPFM, the Warri and Kaduna refineries had been shut down for about 48 months owing to non-supply of crude oil feedstock to keep the refineries running.

    OMS said: “It is important to state that with our company’s intervention, it is estimated that the nation has been saved over $2billion based on NNPC’s admittance of an average loss of about 40-60 percent of crude oil pumped through the Escravos-Warri pipeline due to vandalisation and crude oil theft.

    This saving is definitely more if the analysis were to be based on the additional loss recorded while pumping crude oil through the Port-Harcourt-Bonny-Okrika pipeline.”

    It must be stated for public records and without fear of contradiction that OMS is a projects solution providing corporate concern and not a trading company. For 30 years, we have offered value-driven services to our clients and we were never found wanting.

    NNPC, as a performance driven corporation, has never found us wanting in delivering quality service and the records are there to attest to this.

    We are not a trading company, we have never traded in one barrel of crude oil or one litre of product whether legally or illegally.

    Even at the risk of sounding repetitive, therefore, OMS, wishes to state that we remain totally committed to transparency, efficiency and global best practices in all our ventures.

  • FEC okays new policies for oil, labour

    •Fed Govt plans to end fuel importation by 2019

    The Federal Executive Council (FEC) has approved new policies for oil and labour sectors, Minister of State for Petroleum Resources Dr. Ibe Kachikwu and Minister of Labour Chris Ngige said yesterday.

    Kachikwu and Ngige spoke to State House correspondents at the end of the council meeting chaired by Acting President Yemi Osinbajo at the Presidential Villa, Abuja.

    They were with Minister of Information Lai Mohammed and Minister of State for Budget and National Planning Zainab Ahmed.

    Kachikwu said the Federal Government was committed to ending fuel importation into Nigeria by 2019.

    On the plan to end it, he said: “In terms of specifics, what a policy document does is that it gives you a general guideline in terms of where you are headed. Then, you go into the specifics in other separate documents for purpose of execution.

    “If you take the 2019 timeframe for refinery for instance, it won’t tell you what I’m doing today, but it will tell you that I have set a timeline to exit importation and to get the refineries working by 2019.

    “But if you ask me specifically off the shelve what are we doing on that? There is a steering committee already in place, which I head. There is a technical committee team already set up headed by chief operating officer in NNPC. We have had series of meetings with individuals who are willing to put money into the refineries.

    “I need to state this clearly. This is not a sale and this is not a concession. This is a financing scheme and there are over 30 people who have indicated interest in that financing.

    “They are going to go through the usual due process mechanism to see who qualifies for that financing. What we have resolved, however, which we have at least have a landing is that each of the refineries would be repaired by the individual company that built the refinery.

    “Who does the work is different from who finance the work to be done. We are still dialoguing who is going to get the financing opportunity, but who is going to get the contracting opportunity to do the work is already decided. If you check the companies that built, I think is Chioda in the North, Saitem in Warri, if I’m not mistaken. I have forgotten the one in Port Harcourt. But, all of them have reached agreement with us in terms of willingness and readiness to do the work.

    “Government is not putting money into this. lt is going to be sector-led effort and they will recover their money through incremental volumes that will arise from the production increase arising from the repairs. We are doing about 30 per cent performances on most refineries now. So, if you get them to above 90 per cent template, we are going to use some of the product line to pay for some of the debts and free ourselves from the importation problems.”

    Noting that the refineries, when repaired cannot cover the required consumption, the minister said some level of efficiency and upgrade would increase their capacity.

    He said: “We are banking on the fact that efficiency steps we are taking will reduce the consumption. We have gone from the 50 million  litres per day when I resumed office down to today that is about 28 million litres per day.

    “So, obviously, efficiency has wiped off smuggling, efficiency has reduced consumption and also whatever gains we made under the subsidy regime by taking the subsidy out has also taken out. So, if we are reducing the level of consumption and increasing the efficiency of the refineries, we are banking that we will be able to exit importation completely.

    “And this is not building in Dangote refinery that is 165,000 barrel cap on it, or the modular refineries we are looking at or the AGIP we are looking at.

    “So, I think we are finally on course and we are going to be very aggressive on target,” he said.

    But he added that improving oil production target was very dicey.

    According to Kachikwu , the council yesterday considered the Nigeria Petroleum Policy document.

    He stressed that the essence of the gas policy, which was considered three weeks ago, was to change the imperatives of Nigeria from an oil producing country to a gas producing country.

    Kachikwu was optimistic that the change process that was started in 2015 will be brought to logical conclusion in the next few years, if the new document is well-executed.

    Ngige said FEC received the National Employment Policy, which will guide the administration.

    He added that the last employment policy in operation in Nigeria was approved  in 2002.

    “That’s 14 years and in that 14 years, a lot of things have changed in labour and employment industry. Things like employment for people with disabilities, decent jobs programme and doing jobs without polluting the environment and other things that are new and contemporary in the labour market.”

    On the issue of minimum wage, he said the ministry is awaiting the nominations from other bodies and groups.

    “Once these nominations are in place, the President will then inaugurate the committee,”Ngige said.

    Mrs. Ahmed said her ministry presented the National Social Protection Policy to the council.

    The policy, she said, is a framework that seeks to provide social justice, equity and inclusive growth by using a transformative mechanism for mitigating poverty and unemployment in Nigeria.

    According to her, the  social investment programme started by the Federal Government since 2016 were drawn from the policy, which is presently in a draft form.

  • Four oil tankers burst into flame in Ondo

    Four oil tankers burst into flame in Ondo

    Tragedy struck in the hilly town of Oka-Akoko,headquarters of Akoko Southwest of Ondo state on Saturday when four petroleum tankers burst into flames due to difficulties in ascending the elevated terrain of ‘Oke-Oka’.

    As at the press time,the inferno still subsided,while motorists have abandoned the route linking Owo-Iwaro-Isua-Akoko-Lokoja- Abuja.

    The Mokwa-Jebba bridge collapsed few weeks ago causing untold hardship to motorists and passengers.

    According to the Olubaka of Oka-Akoko, Oba Adebori Adeleye, the present situation had ruined the economy of his people and had adverse effect on their lives.

    However,the monarch appreciated Governor Oluwarotimi Akeredolu for his concern following the prompt delegation he sent to assess the road.

    Already, officials of the Federal Road Safety Commission(FRSC) and soldiers have flooded the road to control few vehicles and motorcycles plying the dangerous spot.

    The volume of articulated vehicles passing through Ikare-Ajowa to the Northern part have increased tremendously and now spoiling the road.

    Residents of the four local government areas in Akokoland accused their representatives at both State and National Assemblies of not doing enough to tackle the road  in the area in spite of many lives that had been lost because of the development.

  • OPEC sees surplus, lower demand for oil

    OPEC sees surplus, lower demand for oil

    The Organisation of Petroleum Exporting Countries (OPEC) yesterday said its oil production jumped in June and forecast world demand for its crude will decline next year as rivals pump more. It pointed to a market surplus next year despite an OPEC-led output cut.

    Giving its first 2018 forecasts in a monthly report, the oil cartel said the world will need 32.20 million barrels per day (bpd) of crude from its members next year, down 60,000 bpd from this year.

    It said its oil output in June rose above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply. Its officials nonetheless remain upbeat on the outlook.

    “We remain very optimistic (about) helping the market to rebalance itself,” OPEC Secretary-General Mohammad Barkindo said at an industry conference in Istanbul.

    Oil rose above $48 a barrel yesterday as a United States (U.S.) report of falling inventories in the U.S. raised hopes that the glut is easing.

    OPEC referred to an “ongoing rebalancing” of the market.

    Under the supply deal, it is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting half as much, until March next year.

    The group’s production has increased in recent weeks, in part due to the recovery in Libya and Nigeria, which were exempted from the supply cut as domestic conflict had curbed their output.

  • Oil rises above $44 on OPEC cap

    Oil rises above $44 on OPEC cap

    Oil prices hovered above $44 a barrel as the market weighed the likelihood and potential effectiveness of Libya and Nigeria production capping.

    Investors’ skepticism over whether Libya and Nigeria will agree to limit supplies kept futures trading in a $1.19-range in New York.

    Kuwait’s Oil Minister IssamAlmarzooq said in Istanbul that the two African producers, who have boosted output since being exempt from the Organisation of Petroleum Exporting Countries (OPEC) cuts, have been invited to a July 24 meeting in Russia to discuss the stability of their production,  BNP Paribas SA reduced its price forecasts for this year and next because supply growth elsewhere is diluting the impact of the OPEC-led curbs.

    The possibility of Libya and Nigeria agreeing to production caps is giving investors more hope that prices may rise, though the uncertainty is causing “a see-saw effect,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone.

    “People are worried that it could turn out to be a prolonged affair getting them to the table to sign off on something.”

    Oil has traded below $50 a barrel since May in New York amid concerns that elevated global oil inventories and rising output from the U.S. and other producers will offset cuts by OPEC members and its partners. U.S. shale production can expand with prices in the mid-$40s, according to JPMorgan Chase & Co. Libya and Nigeria together added 440,000 barrels a day of production in May and June as fields restarted, according to data compiled by Bloomberg.

    West Texas Intermediate for August delivery rose 38 cents to $44.61 a barrel on the New York Mercantile Exchange. Total volume traded was about 15 per cent above the 100-day average.

    Prices had fallen $1.29, or 2.8 per cent, to $44.23 on Friday.

    Brent for September settlement increased 40 cents to $47.11 a barrel on the London-based ICE Futures Europe exchange. Prices slid 2.5 per cent last week. The global benchmark crude traded at a premium of $2.31 to September WTI.

    If Libya and Nigeria are able to stabilise their output at current levels, they will be asked to cap supply as soon as possible, Almarzooq said. However, deepening production cuts already agreed to by OPEC and partners is not on the agenda for the July 24 meeting in St. Petersburg, he said. It’s premature to talk about that option, OPEC Secretary-General Mohammad Barkindo said in Istanbul.

    “The output from Libya and Nigeria have actually had more of an impact in undermining the efficacy of OPEC’s cuts than even U.S. shale,” Tamar Essner, an energy analyst at Nasdaq Inc. in New York, said by telephone. “If they can put a freeze, that remains to be seen, but that will be an important driver in terms of really reducing OPEC’s exports.”

    BNP Paribas cut its 2017 Brent forecast by $9 to $51 a barrel and for 2018 by $15 to $48, while making similar reductions for WTI. “OPEC’s objective to reduce oil inventories to their five-year average is elusive in the short-term,” the bank’s head of commodity markets strategy Harry Tchilinguirian said in an emailed report.

  • Oil rises 2% on dip in U.S. crude

    Oil rose about two percent yesterday, making up some of the previous session’s losses after United States (U.S.) data showed crude oil and gasoline stocks dropped more than expected, yet more analysts cut price forecasts.

    Brent crude futures were up $1.19 to $48.98 a barrel, a 2.5 percent gain. The previous session, Brent settled down 3.7 percent, its biggest daily drop in a month.

    U.S. West Texas Intermediate crude futures were up $1.15, or 2.5 per cent, at $46.28 a barrel.

    U.S. crude stocks fell 6.3 million barrels, the U.S. Energy Information Administration (EIA) said, citing stronger refining activity and reduced imports. That was much more than the draw of about 2.3 million barrels analysts had forecast.

    “Inventories were better than the market anticipated and we’re seeing gains in crude and products futures as a result,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

    Heavier-than-expected global supplies have pressured oil prices, and market watchers believe the Organisation of the Petroleum Exporting Countries will need to make further output cuts to offset thriving shale production in the United States.