The Nation Newspaper

Tag: Oil

  • Breweries, oil majors rally equities to modest gain

    Nigerian equities opened this week with a tight market situation but gains recorded by many highly capitalised stocks in the breweries and oil and gas sectors nudged the overall market position to a modest gain of N3 billion.

    With the most capitalised banks trading in the negative, the market sustained its modest positive performance with considerable gains by the largest brewers and oil majors. Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose marginally from N9.023 trillion to close at N9.026 trillion, representing a modest gain of N3 billion.

    The All Share Index (ASI), the benchmark index for the equities market, also inched up by 0.03 per cent from 26,223.54 points to close at 26,231.37 points. The modest gain moderated the negative average year-to-date return to -2.39 per cent.

    The overall market performance was driven largely by gains recorded by Total Nigeria, Nigerian Breweries, Guinness Nigeria, GlaxoSmithKline Consumer Nigeria and Oando Plc. The pricing trend also reflected on the sectoral indices.

    The NSE Oil & Gas Index recorded above average gain of 0.14 per cent. The NSE Consumer Goods Index appreciated by 0.04 per cent while the NSE Industrial Goods Index inched up by 0.01 per cent. However, the NSE Banking Index declined by 0.03 per cent while the NSE Insurance Index closed flat.

    Total Nigeria, the best-performing oil and gas stock in 2016, led the 19-stock rally with a gain of N6 to close at N287. Nigerian Breweries, Nigeria’s second most capitalised quoted company, followed with a gain of N2.44 to close at N144.50. Guinness Nigeria, the second most capitalised brewer, rose by N1.50 to close at N68.50. GlaxoSmithKline Consumer Nigeria added 25 kobo to close at N16. Oando gathered 18 kobo to close at N4.75. UACN Property Development Company chalked up 14 kobo to close at N3.02 while Eterna added 12 kobo to close at N3.60 per share.

    On the other hand, Nestle Nigeria, the highest-priced quoted company, led the 15-stock losers’ list with a loss of N25 to close at N720. Forte Oil followed with a loss of N2.62 to close at N63.88. Cadbury Nigeria lost 13 kobo to close at N9. Guaranty Trust Bank and Honeywell Flour Mills dropped by 6.0 kobo each to close at N23.90 and N1.18 while Zenith Bank, Africa Prudential Registrars and May ad Baker Nigeria declined by 5.0 kobo each to close at N15.95, N3.05 and 97 kobo respectively.

    Total turnover stood at 228.59 million shares valued at N2.58 billion in 3,228 deals. United Bank for Africa was the most active stock with 41.26 million shares worth N214.33 million. Access Bank recorded a turnover of 30.9 million shares valued at N216.3 million while Presco placed third with 23.1 million shares valued at N1.02 billion.

    “We expect the positive start in the new week to continue as investors bargain to position for dividend income ahead of financial year-end results of companies. Though, most investors may adopt cautious approach in view of the foreign exchange condition. However, we reiterate that the current valuations still provides an attractive entry points for risk tolerant investors,” SCM Capital, a Lagos-based broker at the Exchange, stated.

  • Oil workers reject planned sale of refineries

    As the management of the Nigerian National Petroleum Corporation (NNPC) plans to rehabilitate refineries to optimise capacity utilisation in the year, oil workers in the country have warned the Federal Government against the sale of national refineries as scraps.

    The Group Executive Councils of National Union of Petroleum and Natural gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said the step was a drift from the initial position which the union had rejected.

    It noted that the proposal to adopt a new model that would bring investors to increase productivity without necessarily having to lose jobs was commendable.

    Secretaries of the two groups, Comrade Sulaiman Sulaiman of PENGASSAN and Comrade Uche Amara of UNPENG GEC, said they had been following the Group Managing Director (GMD) of NNPC, Maikanti Baru’s 12 Focus Area drive towards revamping the corporation with interest.

    It noted that the administration of the GMD has been workers’friendly in the evaluation of its programmes and listed promotions, redeployment, rehabilitation of refineries as well as other welfare programmes, including wage and retirement benefits.

    “We believe that this practice if sustained will continue to boost staff morale and increase productivity”, the unions said, and promised to be committed in partnering with him to increase productivity and enhance welfare of workers.’’

  • Optimism over rising oil price

    Firms in the upstream and downstream sector will bounce back if the price of crude oil continues to rise, stakeholders have said.

    Former Executive Director of the National Integrated Power Projects (NIPPs) Dr Albert Okorogu and  former Country President of the Association of International Energy Economists (AIEE) Prof Adeola Akinnisiju said operators would  raise their investments if the crude price hits $56 per barrel.

    Okorogu said momentum was gradually returning to the industry, adding that the sector would witness new investments soon.

    He said the decline in prices was affecting the sector, adding that operators, such as the international oil companies (IOCs) and their local counterparts, power generation companies (GenCos), gas producers and suppliers, among others, were hard hit.

    “The recovery of oil price is a good omen for operators in the nation’s oil and gas and electricity  industry. Once oil companies return to profitability, they would increase oil and gas exploration and the better for fertiliser and power companies,’’ he said.

    Okorogu said there would be enough gas for domestic consumption when oil companies increase the commodity. He said many power firms relied on Forcados pipeline owned by Shell for gas supply, adding that many power firms were stranded when militants broke the gas pipeline.

    Also, Adeola said operators would benefit when crude price appreciates further. He said activities in the sector had gone down, following the fall in the global price of crude.

    ‘’If the price of crude oil can increase from below $20 per barrel in 2014 to$56 per barrel in 2017, it means that the global oil market can record a price of $100 per barrel in the next few years,” Adeola said.

    He said the price of crude could pick up as the Federal Government  looks for money to finance critical infrastructure in the country, adding that the government relies on revenue from petroleum to finance budgets.

    The global oil crisis began mid- 2014, a development that has resulted in price crash and forced oil operators to prune their operations and workforce.

  • Saudi pledges commitment to oil output cut

    Saudi Arabia has said it will adhere to its commitment to cut output under the global agreement among oil producers, its energy minister Khalid al-Falih has said, expressing confidence that the Organisation of Petroleum Exporting Countries’(OPEC’s) plan to prop up prices would work.

    Khalid al-Falih, according to Reuters, spoke at an industry event in Abu Dhabi. al-Falih said he was encouraged by signs of commitments by other participants in the deal since it took effect on January 1.

    “Many countries are actually going the extra mile and cutting beyond what they’ve committed. I am confident about the impact and I am very encouraged about those first two weeks,” al-Falih said.

    The comments are the latest in a series of assurances from officials that participants will follow through on the agreement intended to help get rid of oil supply glut. Compliance with the deal will be a key influence in early 2017 on oil prices, which at $56 a barrel are about half their level of mid-2014.

    Under the accord, the OPEC and Russia and other non-members will curtail oil output by nearly 1.8 million barrels per day (bpd), initially for six months.

    Last week, Falih said Saudi output had fallen below 10 million bpd, meaning Saudi Arabia had cut production by more than the 486,000 bpd which it agreed to late last year under the producers’ agreement.

    Al-Falih said: “We will strictly adhere to our commitment,” adding that during the six-month agreement, Saudi output would either be at the kingdom’s target under the deal or “as is the case now, slightly below.”

    Producers were unlikely to extend the deal beyond six months and would allow market forces to prevail once the supply glut is eradicated. “My expectations are that the rebalancing that started slowly in 2016 will have its full impact by the first half,” he said.

    “Once we get close to the five-year average of global stocks and inventories we will basically let our foot off the brakes and let the market do its thing.”

    OPEC complied with up to 80 per cent of its last output cut in 2009, according to International Energy Agency data. A committee of OPEC and non-OPEC ministers to monitor the issue is meeting on Sunday.

    Kuwait also said last week it had cut production by more than it committed to and OPEC’s secretary general told Reuters he was confident of the level of commitment and enthusiasm among producers who agreed to the deal.

  • Militancy: Osinbajo to visit Delta, Bayelsa, Rivers oil- producing communities

    Militancy: Osinbajo to visit Delta, Bayelsa, Rivers oil- producing communities

    Vice President Yemi Osinbajo is scheduled to visit a number of oil communities in some Niger Delta States starting on Monday, January 16, 2017 with a visit Delta State.

    Osinbajo, at a later date to be announced soon, would also visit Bayelsa and Rivers States.

    The trips are in demonstration of President Muhammadu Buhari’s readiness and determination to comprehensively address the Niger Delta situation,

    During the visits, a statement by the Senior Special Assistant on Media and Publicity, Garba Shehu, said that the Vice President will lead high-level delegations of the Federal Government that will interact with leaders and representatives of the oil-producing communities.

    The statement reads: “The Buhari presidency is fully committed to having an effective dialogue and positive engagement that will end the crisis in the oil-producing areas, and believes that these visits would further boost the confidence necessary for the attainment of peace and prosperity in the areas and the Nigerian nation in general.”

  • Oil rises as customers brace for output cuts

    Oil rises as customers brace for output cuts

    Oil prices rose for the first time in three days yesterday, following news of Saudi supply cuts to Asia, but persistent doubt over output reductions and signs of rising shipments from other producers kept gains in check.

    Brent crude futures were up 41 cents at $54.05 a barrel while U.S. West Texas Intermediate crude futures were up 39 cents at $51.21 a barrel.

    Brent has surrendered nearly 40 per cent of the gains made between late November and early January. Analysts, however, said the slide was unlikely to become more aggressive, given the likelihood of Saudi Arabia and its Gulf neighbors at least sticking to their pledge to cut output.

    “Few envision that Brent crude at sub-$50 a barrel is a viable price (in the first half of 2017) amid Organisation of Petroleum Exporting Countries (OPEC) production cuts tightening up the market,” SEB commodities strategist Bjarne Schieldrop said.

    Whether “last night’s low of $53.58/barrel turns out to be the low point remains to be seen. However, we do think that buying in the territory between the current price of $53.88/b and down to $50/b is probably as good as it gets for buyers in H1.”

    Saudi Arabia, the world’s top oil exporter, has told some of its Asian customers that it will reduce their crude supplies slightly in February.

    But there is still plenty of oil to fill the gaps left by the OPEC. North American drilling is on the rise, while European and Chinese traders are shipping a record 22 million barrels of crude from the North Sea and Azerbaijan to Asia this month.

  • Nigeria’s oil production disruptions dip OPEC’s output

    Nigeria’s oil production disruptions dip OPEC’s output

    Crude oil production of the Organisation of Petroleum Exporting Countries (OPEC)  dipped by 310,000 barrels per day (bpd) in December, as unplanned disruptions in Nigeria reduced the group’s supply before deliberate cuts take effect this month.

    Nigeria’s daily output dropped by 200,000 bpd to 1.45 million in December, ending three months of gains as the nation struggled to restore capacity after a year of militant attacks on oil infrastructure. Saudi Arabia’s production fell by 50,000 bpd while Venezuela declined by 40,000.

    “Crude production in Nigeria in December was once again severely impacted, mostly due to a field maintenance as well as a strike of port workers,”  Chief oil analyst at London-based consultant Energy Aspects Ltd., Amrita Sen, explained by e-mail.

    The decline in December comes as OPEC, which controls around 40 per cent of global supply, is planning to curb output in a bid to boost oil prices. The organisation reached a historic deal last month with Russia and other non-members to cut global production by almost 1.8 million bpd starting this month.

    Brent crude, the global benchmark, advanced 52 per cent last year, the biggest annual gain since 2009. Prices were down 0.3 per cent at $56.31 a barrel as of 6:39 a.m. London.

    Overall, OPEC-excluding Indonesia which suspended its membership on Nov. 30-pumped 33.1 million bpd in December, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. That compares with a November total of 33.41 million bpd for the 13 continuing members of the group, or 34.14 million including Indonesia’s daily output of 730,000 barrels.

    Under the terms of last month’s agreement, OPEC’s total output including Indonesia would fall to 32.5 million bpd. Compliance with that target will be judged against independent estimates compiled by OPEC, which can vary from the Bloomberg News survey.

    In Nigeria, which along with Libya is exempt from making cuts because of conflict,  maintenance on the Erha field and strike action by workers at Exxon Mobil Corp.’s operations in the country disrupted both exports and production, Sen said. A year ago, the country was pumping almost 2 million bpd.

    No cargoes of the Agbami crude grade were shipped in first half of December, while three out of the four Erha cargoes originally scheduled to load were deferred, with two of those moved into January, according to loading programs obtained by Bloomberg.

    Iran, Kuwait and Angola each reduced output by 20,000 barrels a day while Algeria and Iraq dropped by 10,000, the survey showed.

    Libya pumped an extra 50,000 barrels a day last month as the Northern African nation reopened two of its biggest oil fields and loaded the first cargo in two years from its largest export terminal.

  • NNPC okays 39 firms for oil trade

    NNPC okays 39 firms for oil trade

    State-run  Nigeria National Petroleum Cooperation (NNPC) has finally unveiled 39 companies which will trade Nigeria’s oil for this year’s crude oil term contract.

    The 39 companies emerged from 224 which participated in an open bid.

    The list, which was released by the oil firm, includes 18 indigenous companies, two NNPC trading companies and a host of international companies.

    The NNPC, in a statement, said: “The contract will run for one year, effective  January 1 2017 for consecutive 12 circles of crude oil allocation.

    “The list involves 18 Nigerian companies, 11 International Traders, five  foreign refineries, three National Oil Companies (NOCs) and two NNPC trading arms. All the contracts are for 32,000 bpd except Duke Oil Ltd, a subsidiary of NNPC, which shall be for 90,000 bpd.”

    For refineries contract, Hindustan Refinery; Varo Energy; Sonara Refinery; Bharat Refinery; Cepsa emerged winners while for international traders,Trafigura; ENOC Trading; BP Trading; Total Trading; UCL Petro Energy; Mocho; Tevier Petroleum; Heritage Oil; Levene Energy; Glencore; Litasco Supply and Trading were okayed by the NNPC.

    Under the government to government

    contract, there is India (Indian Oil Company); China (Sinopec); South Africa (Saccoil) while Oando; Sahara Energy; MRS Oil and Gas; A.A Rano; Bono; Masters Energy; Eterna Oil and Gas; Cassiva Energy; Hyde Energy; Britania-U; North West Petroleum; Optima Energy; AMG Petroenergy; Arkleen Oil & Gas Ltd; Shoreline Limited; Emo Oil; Setana Energy; and Prudent Energyare indigenous firms that got approval. NNPC trading companies-Duke Oil Limited and Carlson Hyson are also involved in the contract.

    During the open bid in November last year, the Group Managing Director of NNPC, Maikanti Baru,  had said the number of bidders for the contract dropped from 278 that applied for the contract in 2015 due to  the new requirements introduced by the corporation.

    Baru explained that the process, which prioritised refiners and big crude oil lifters,  would be concluded next month.

    “When we sell this crude oil, the money goes straight to the Central Bank of Nigeria (CBN) account on behalf of the federation. NNPC does not operate any of those accounts.

    “The best input from the NNPC is confirmation that the money has been paid but we have no signature rights on this account, contrary to the perception that NNPC is hoarding some money on behalf of the Nigerian people, all the crude oil that we sell goes to the Nigerian people. There is nothing that is hidden, it is all open for everybody to see,” Baru had explained.

  • ‘Be involved in oil and gas sector’

    The Nigerian Content Development and Monitoring Board (NCDMB), has advised Nigerian youths, especially those from the oil-producing communities, to be involved actively in the oil and gas industry.

    The NCDMB General Manager, Zonal Coordination and Board’s Projects, Dr. Ginah O. Ginah gave the advice at the youth sensitisation and enlightenment workshop held in Akure and Owo local government areas for the youth in the central and northern senatorial districts of Ondo State.

    The participants were taught on the fundamentals mandates of the NCDMB and its activities, relevant skills in the oil and gas industry and how to acquire them.

    He added that they are to promote the development and utilisation of in-country capabilities for industrialisation of Nigeria through effective implementation of the Nigerian content act.

    He noted that the board is working on how to ensure more Nigerians, particularly youths from the Niger Delta region engage in relevant skills that will make them become employable in the industry.

    Ginah said the development would also promote peace in the Niger Delta by reducing the rate at which the youth in the oil-producing areas engage in crime.

    He also explained that the board was examining a situation in which there is reduction in the rate where companies prefer foreigners to our local experts when jobs are available.

    A consultant to the NCDMB, Hon. Oyebo Aladetan said they have been able to find one of the laws of the country to acquaint the people about environmental values and how they could benefit from their environment.

    Aladetan, who was a former lawmaker presenting Ilaje State Constituency I also said the NCDMB act would help in reducing the rate of neglect of the Niger Delta people.

  • More oil possible from Nigeria

    Nigeria stimulated crude oil production at one of its operating areas by about 15 per cent, a report has said.

    Africa-focused San Leon Energy, which lists its headquarters in London, holds a minority stake in oil mining lease No. 18 onshore Nigeria. The company said new boring at wells in the lease area increased gross production to around 61,000 barrels of oil per day.

    “The well has now been temporarily shut in to allow minor production upgrades and additional work-over operations, and current gross OML 18 production is around 53,000 bpd,” the company stated.

    Nigeria is exempt from an agreement crafted by the Organization of Petroleum Exporting Countries to cut production next month because of militant attacks on its oil sector. The managed decline is aimed at bringing the market back to a reasonable balance between supply and demand. An oversupplied market pushed crude oil prices below $30 per barrel in early 2016.