The Nation Newspaper

Tag: Oil

  • Why oil prices may not rise soon, by expert

    Why oil prices may not rise soon, by expert

    The oil prices dip is different from previous cyclical scenarios in which  prices don’t take so long to rebound, the Chairman of Society of Petroleum Engineers (SPE) Nigeria Council, George Kalu, has said.

    Kalu, who spoke at the Oloibiri Lecture Series and Energy Forum (OLEF) in Abuja, said besides oil supply glut, most of the oil consuming countries have huge stocks, which may considerably delay a quick rebound of the prices.

    He said: “With an all-time high crude oil inventory by the Organisation for Economic Co-operation and Development (OECD) countries, the oil prices dip this time around is different from previous cyclical scenarios. This was partly occasioned by the demand-supply landscape in the global oil market and need to hedge against supply shortfall to the OECD.

    “The emergence of oil supplies from the United States shale areas plus the decline in oil demand from Europe and North America has contributed to a large extent. Simple innovative technology deployed such as water shut-off, short radius horizontal sidetrack in existing assets will ensure low cost oil production.”

    According to him, this year’s theme Technological advances in hydrocarbon exploration and exploitation: Solutions to global oil price stability,”is pertinent coming in a low oil price scenario. It thus provides Nigeria with the unique opportunity of maximsing benefits from adoption of low cost technology in asset management as well as industry collaboration between buyers, suppliers and vendor with operators in the oil and gas industry.

    “It is our hope and expectation that through OLEF 2016’s theme and the subtopics, we will stimulate discussions aimed at mitigating the effect of low oil prices and helps chart the right course towards a sustainable future for the Nigeria oil and gas industry.

    “Permit me to mention that OLEF 2016 also coincides somewhat with 60 years of oil exploration and exploitation in Nigeria since the first discovery in Oloibiri in commercial quantity. During this period, Nigeria has operated within the league of oil producing and exporting nations. The industry has experienced much transformation along the way,” he said

    Speaker of the House of Representatives, Hon. Yakubu Dogara, said: “This year’s partnership demonstrates the hallmark of the cooperation between the Executive and Legislature on non-partisan professional body the opportunity to address and proffer common solution geared towards growing in-country capacity to meet the challenge posed by the ongoing reforms and divestments in the upstream sector and petroleum industry at large.

    “As Nigeria aspires to maintain its current growth forecast and sustain the year 2012 GDP growth rate of 6.48 per cent, Morgan Stanley has predicted that Nigeria is expected to become an economic power overtaking South Africa by 2025 in its terms of GDP.

    “The theme is timely given that the role of a strong local refining in maximising benefits for economic growth in a declining oil prices environment and linkages to the manufacturing industry as well as the agricultural sector; which creates growth in the real sector of the economy. This shall enable Nigeria achieve its desired growth aspiration.”

    He said the National Assembly shall consider and expedite the passage of legislation of the Petroleum Industry Bill (PIB) to enable the restructuring and deregulation of the downstream sector; thus, allow for competition in all segments including open access to the pipeline as well as providing a robust tariff mechanism for all players.

  • Oil reform will provide jobs, says Kachikwu

    The Federal Government will end corruption and improve the economy to create jobs, Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said. The minister said efforts were being made by the government to ensure that the refineries are working.

    He spoke at the University of Nigeria, Nsukka (UNN) penultimate Thursday while delivering the institution’s 45th convocation lecture titled: The petroleum industry and the future of Nigerian nation.

    He said the refineries would be revamped to make petroleum products surplus, noting that efforts were being made to repair damaged pipelines supplying crude oil to the refineries.

    The objective of President Muhmmadu Buhari’s reforms in the oil and gas industry, he said, was centred on having the right people at the helm of affairs.

    Kachikwu said: “With the right people in petroleum sector, there will be increase in revenue for the country through sales of crude oil and petroleum products. The products will be at affordable price and government will ensure lowest prices. The reforms will provide employment opportunities for Nigerians.”

    The minister said there was no accountability and openness in the management of the petroleum industry in the past 25 years, a situation, Kachikwu said, led to the declining capacity of the refinery. He said President Buhari had ensured transparency and openness by his directive to the Nigeria National Petroleum Corporation (NNPC) to publish its monthly report.

    He urged people to support Buhari in his fight against corruption in all sector of the economy, saying the effort would restore sanity back to the government.

    Kachikwu, a UNN alumnus, hailed management for maintaining the academic tradition of the institution, noting that the school contributed to his career as a professional.

    The Vice-Chancellor (VC), Prof Benjamin Ozumba, described Kachikwu as “thoroughbred expert”, noting that his choice as lecturer was informed by his track record in oil and gas industry.

    The highpoint of the event was presentation of gift to Kachikwu in appreciation of his contributions in the university and his commitment to reform the oil sector.

  • Buhari seeks OPEC members’ cooperation to stabilize oil market

    President Muhammadu Buhari on Sunday in Doha emphasised the need for member states of Organization of Petroleum Exporting Countries (OPEC) and non-OPEC members to cooperate and find a common ground to stabilize crude oil prices.

    Speaking at a bilateral meeting with the Sheikh Tamim Bin Hammad Al-Thani, the Emir of the State of Qatar, President Buhari described the current market situation in the industry, which has seen oil prices plummet by 70 per cent since mid-2014, as ‘totally unacceptable’.

    Buhari, in a statement by the Special Adviser on Media and Publicity, Femi Adesina, said: “As members of OPEC and Gas Exporting Countries Forum (GECF), our relations in the areas of oil and gas, which our two nations heavily rely on, need to be enhanced and coordinated for the benefit of our people.”

    “The current market situation in the oil industry is unsustainable and totally unacceptable.

    “We must cooperate both within and outside our respective organisations to find a common ground to stabilize the market, which will be beneficial to our nations,’’ the President said on the second day of his state visit to Qatar. ”

    He used the occasion of his address to the Emir to commend the existing cordial bilateral relations between both countries and invited prospective Qatari investors to take advantage of the abundant opportunities in Nigeria and invest in the key areas of energy, agriculture, real estate development, banking and finance.

    The President also assured prospective investors of government protection of their persons and investment, noting that in the course of his visit, the delegations from Nigeria and Qatar would formalize at least two bilateral agreements to boost economic cooperation between both countries.

    He also weighed-in on the situation in the Middle East, commending the role Qatar is playing in resolving the present Syrian crisis, the Palestinian cause and efforts in reconstructing Gaza.

    He said: “The conflicts in Yemen and Syria with their attendant humanitarian crisis need genuine international effort to solve. Nigeria as a peace loving country identifies with the State of Qatar in all her peace efforts in the world to end terrorist activities.

    “Nigeria is a victim of terrorism. It is with heavy heart that I stand before you and say activities of Boko Haram have led to loss of many lives and displacement of innocent people in our dear nation.

    “We, however, take pride to inform you that since our coming to power, Boko Haram has been systematically decimated and are in no position to cause serious threat to our development programs.

    “I wish to reiterate that Nigeria rejects violence and extremism in all their ramifications, and assure your Highness that we are with the State of Qatar in your efforts to fight terrorism and injustice in your region and in the world at large.’’

    President Buhari also called for a lasting solution to the Israeli – Palestinian conflict , saying “we in Nigeria, like the State of Qatar, favour a ‘Two State’ solution, with the State of Palestine living side by side with the State of Israel.

    “I want to assure you that we will stand side by side with you, until our brothers and sisters in Palestine achieve their desired objectives.

    “Our support for various Security Council resolutions restoring and respecting 1967 boundaries with Jerusalem as capital of Palestine is firm and unshaken,’’ he said.

  • ‘Local oil firms worst hit by price crash’

    The global oil price crash affected Nigerian independent oil companies most, the Managing Director of Seplat Petroleum Development Company Plc, Mr. Austin Avuru has said.

    Avuru spoke yesterday at the 13th Aret Adams Annual Lecture Series held in Lagos. Speaking on this year’s lecture themed: ‘Low Oil Prices: Challenges and Opportunities,’ he said  independent oil companies in the country were heavily impacted as they all borrowed to fund acquisitions and capital expenditure (capex) growth.

    He said many independents are now cash negative and yet need more investments for production increase in order to survive, adding that the average price of $60 per barrel was required for most companies to survive this year.

    “We need to embrace effective domestic utilisation of fossil fuels to survive, and because Nigeria is heavily dependent on oil to balance the economy, the drop in oil price was a huge blow to the country’s revenue,” Avuru said.

    The Managing Director, Chevron Nigeria Limited, Mr. Clay Neff said Nigeria had the opportunity to improve its competitive position in the global oil and gas industry.

    He noted that in this current situation, the country should restore investors confidence by providing competition in the oil market, adding that the security of lives and properties, and control stability and speedy approval processes should also be institutionalised.

    The Chevron chief said the country should address its Joint Venture (JV) funding challenges and pay the arrears, adding that Nigeria had an attractive resource base.

  • PPMC’s private security firm nabs oil thieves in Ogun State

    PPMC’s private security firm nabs oil thieves in Ogun State

    Topline Leighton Limited is a private pipeline surveillance firm hired by the Pipeline and Products Marketing Company (PPMC) to monitor its System 2B that runs from Atlas Cove in Lagos State through Ogun and Ondo states to Ilorin in Kwara State. The firm has, between January and this month, punctured major illegal oil bunkering sites, including Roberts Village near Atlas Cove and Ogere Waterworks, among others. It also caught some suspected vandals. EMEKA UGWUANYI reports.

    •Over 1,000 jerry cans of petrol seized

    A major breakthrough in the fight against pipeline vandalism and oil theft has  been achieved.

    A private pipeline surveillance firm, Topline Leighton Limited, hired by the Pipeline and Products marketing Company (PPMC), an arm of the Nigerian National Petroleum Corporation (NNPC) has caught some oil thieves at Ogere in Ogun State.

    The alleged oil thieves hacked the PPMC’s System 2B Pipeline at Ogere Waterworks area of Ogun State. The pipeline right of way is in the bush and has been a haven for vandals.

    However, luck ran against them (vandals) this week. The alleged thieves include Mr. Lanre Adewusi (47years), from Ogun State, Agbor Ayang (25 years) from Cross River, and Ebak Oyama (24years) from Cross River.

    They however denied being vandals and oil thieves when interviewed by The Nation. They said they were lured into the bush by a friend who said they were being hired to load planks.

    The Ogere illegal bunkering site has been notorious and the illegal activities there have degraded and polluted a greater part of the area with several abandoned wells and spills. At the site, about 1000 jerry cans of between 30 and 50 litres loaded with petrol (premium motor spirit) were impounded by the security agents and another over 1500 empty jerry cans packed in different parts of the bush.

    The Security Coordinator, Topline Leighton Limited, Mr. Adigun Adetona, after the inspection of the pipelines and stolen fuel, said the pipeline surveillance firm was hired to monitor NNPC/PPMC system 2B pipeline from Atlas cove to Ilorin in Kwara State. The System 2B Pipeline runs from Atlas Cove in Lagos through Mosimi in Ogun State to Ore in Ondo State and to Ilorin in Kwara State.

    “You saw we recovered over 1000 of jerry cans filled with petrol from the arrested vandals, as well as their equipment,’’he said.

    Adigun said since his firm assumed the surveillance of the pipelines, it has made series of arrests at Atlas Cove and environs and new discoveries of where vandals operate.  He said: “We are in-charge of the safety and Security of NNPC pipeline from Atlas Cove to Mosimi to Ibadan and from Ore to Ilorin. We are glad because of the landmark achievement here in Ogere Waterworks. You can see what we detected. Oil theft and pipeline vandalism have been going on here for decades but nobody has been able to apprehend the vandals but with our efforts and the collaboration of the security agencies, we are able to make this breakthrough. This is our commonwealth; they (vandals) are stealing. With the collaboration of other security agencies including the Police, Navy, Nigerian Security and Civil Defense Corps, we are ready to match them in all fronts and ensure that our national assets are secured.”

    Adigun warned vandals to desist from destroying national assets and values, adding that it will no longer be business as usual. He said the vandals would  be handed over to the police for interrogation, adding that his firm’s efforts had reduced the number of attacks by vandals, which has improved the pumping of petroleum products from the depots. The pumping has been frequent and regular.

    He said President Muhammadu Buhari’s directive on zero tolerance against oil theft and pipeline vandalism had started yielding results.

    The Public Relations Officer, Mosimi Office, PPMC, Mr Godwin Agono, was also excited over the arrest of the vandals and noted that the stolen fuel would be returned to the depot. He lamented the loss of petrol from the Mosimi depot on daily basis due to the vandals’ activities.

    He told The Nation that quantity of stolen fuel seen at the Ogere illegal bunkering site sends a big signal in terms of the battles the PPMC face, adding that the more programme and models applied to curb their activities, the better technology often deployed by vandals.

    The Operations Manager and leader of the pipelines surveillance group, Mr. Aminu Joshua, appealed to the government for more support to track down more vandals. He said information about the Ogere arrest was put into reality on Monday during their patrol of pipeline’s right of way and discovered that about three trucks were coming out from the bush and were loaded with petrol.

    He said that oil theft had been the major occupation of the community, adding that they engaged the vandals in gun battle. ‘’We urge NNPC and other government agencies to support the pipeline surveillance team in other to drive the vandals away’’,he said.

  • ‘IOCs, indigenous oil firms may cut more jobs’

    Local and International Oil Companies (IOCs) may sack more of their outsourced workers,  if the uncertainties in the global oil market continue, President, Association of Outsourcing Professionals of Nigeria (AOPN), Austin Nweze has said.

    Nweze told The Nation that the global oil market climate compared to the Nigerian economy is not conducive. He said people were not ready to risk their resources and investments in Nigeria.

    According to him, operators in the upstream segment of oil and gas have lost many of their workers to market recession, adding that the sector would continue to downsize or right-size, going by the prevailing atmosphere in the industry.

    The sector, he said, has lost thousands of jobs across board, stressing that more workers are expected to join the labour market. “There is a general lull in activities in the industry. Aside the attendant loss of business in the upstream sector that led to sales of assets by Chevron, ConocoPhillips and other oil majors, the downstream sector is battling problems.  There are virtually no new exploration activities in the industry. This is affecting the capacity of the sector to perform optimally,” he said.

    Nweze said according to a research carried out by the association, multinational and local oil companies have lost much to crude oil theft, pipeline vandalism and other untoward practices, adding that they are not ready to incur more losses. The firms, according to him, are opposed to the idea of keeping certain workers as part of efforts at mitigating losses.

    Engineers, clerical workers and others, he said, will be mostly affected because they do not contribute much to their employers.

    He said: “From the research, oil and gas firms are ready to keep security and maintenance officers, who supervise and watch over their equipment. These are contract staff, which the oil companies outsourced. To oil and gas firms, their services are much needed in view of the unstable socio-economic environment in Nigeria.

    “It is expensive to maintain expatriate workers. Their salaries are in foreign currencies, and it would affect the operational costs of the companies if such workers are kept for long. Now, the industry’s problems have rendered them redundant.

    “Maintenance of security officials is important to the oil and gas servicing firms. The firms spend a lot of money in providing pipelines, building tanks, deploying exploration equipments to oil wells, and they would not be happy losing those things.  Though the Joint Task Force set up by the Federal Government to patrol and safeguard oil wells are trying their best, oil firms believe in providing their security to compliment whatever the government has done.”

    According to him, if contract staff such as securities and drivers, among others in the lower cadre lose their jobs, they would get new ones. Nweze said companies provide security and other contract staff for local and international oil companies, adding that their jobs are always needed in the industry. This category of workers collect small salaries, compared to the engineers, geologists, and other senior workers.

    The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) also alleged that the oil majors have sacked many workers in view of the problems in the industry.

  • Why oil revenue is poor, by Kachikwu

    Why oil revenue is poor, by Kachikwu

    Minister of State Petroleum Resources, Dr. Ibe Kachikwu said yesterday that poor governance and weakness in the fiscal administration of the oil sector led to inadequate allocation, mismanagement, ”Dutch disease” and collection of oil and gas revenues for the government.

    He spoke at the Universiy of Nigeria, Nsukka (UNN) while delivering the 45th convocation lecture of the university titled: Oil Resource Management and Implications for National Security and Economic Survival.

    He said continuous rise in expenditure when oil revenue was high led to  accumulation of large public sector debt. He noted that in previous years, little attempt was made to diversify oil and gas resource income.

    Kachikwu said: “For so long, this country has made so much and lost so much to the extent that everybody is uncertain whether oil is a blessing or a curse.”

    He gave  assurance of his commitment to move the petroleum industry forward saying  that with the recent development and technological  innovation in United Stataes,  Nigeria’s reserve will last for between 20 and 25 years.

  • Nigeria, four oil exporters hit by falling currency value, says OPEC

    Nigeria, four oil exporters hit by falling currency value, says OPEC

    Five oil exporting countries, including Nigeria,  Angola, Venezula,  Azerbaijan, and Russia are mostly affected by falling  currency value,  Organisation of Petroleum Exporting Countries (OPEC) has said.

    OPEC, in a paper detailing the impacts of recession on the global oil market, said the countries were picked among several others as having showing serious effects of fall in currency value.

    The body said depreciation in   the cuurency value is common in  the in oil exporting countries, adding that whether it is the Venezuelan bolívar, or the Russian rouble, low oil prices are wreaking havoc in oil exporting economies and on their national currencies.

    OPEC said: ‘’ In most cases, the scenario is similar: over the past decade, oil exporting countries used excessive revenues from oil to expand public services, or simply pursue populist policy in order to buy political stability. Once oil prices started to fall, the budgets did not shrink accordingly, which created a wide gap between the oil revenues and swelling fiscal demands.’’

    According to OPEC, governments were forced to devalue their national currencies in order to stem the rapid outflow of foreign reserves.

    ‘’An unwanted consequence is almost always the rise in inflation and household prices, along with a decline in living standards and stalled economic growth,’’ it added.

    OPEC gave a bit by bit accounts of impacts of falling curency value on the five countries thus.

     

    Nigeria

    Africa’s largest economy was hard hit by the falling oil prices. The national currency, the naira, dropped against the dollar by more than 50 per cent over the past year.

    On January 20, the Federal Government requested $3.5 billion loan from the International Monet6ary Fund(IMF) and the African development Bank to plug its $15billion budget  gap. The country’s oil revenues are expected to fall by 70 per cdent in 2016, while the hard currency reserves almost halved from $50billion to $28billion and the state’s emergncy fund went from $2 billion in 2009 to $2.3billion currently.

    Azerbaijan

    The former Soviet Republic is the first country to request a $4 billion emergency loan from the IMF and the World Bank in order to cover losses caused by low oil prices.

  • ‘Petroleum depot owners sabotaging oil pipelines’

    An Ijaw group, Eye of Niger Delta (END), has accused the Petroleum Depot and Tank Farm Owners Association of sabotaging oil pipelines in the Niger Delta, saying this has contributed to polluting the environment and destroying aquatic life.

    Speaking to reporters in Port Harcourt, Rivers State capital yesterday, the group threatened to protest against any economic sabotage in the region and to expose those behind the act of the alleged oil pipelines sabotage.

    Its leader, Comrade Tari Victor Ben, said the group has written to the association to caution its members who indulge in the act of sabotaging the economy

    He said some people are  sabotaging   President Muhammadu Buhari and ensure that he didn’t succeed, adding that the deceptive act of crumbling the nation’s economy has contributed to the continuous pollution of Niger Delta environment.

    He advised Buhari to push for death sentence for the penetrators of oil pipelines sabotage in the region and other parts of the country. He promised his group’s support for the president and his anti-corruption crusade.

    In a swift reaction, an  executive member, Petroleum Depot and Tank Farm Owners Association Rivers State chapter,   Chief Godwin Umeh, denied any wrong doing.

    Chief Umeh  who spoke on behalf of the association said the allegation is a disrespect to the group which has contributed to the growth of the economy. He urged the group to go ahead and arrest any suspect sabotaging the oil pipelines in the region.

  • Army intercepts stolen oil in Imo

    •Parades 13 suspects

    The 34 Artillery Brigade of the Nigeria Army, Obinze, Imo State, has arrested nine persons for suspected illegal oil bunkering. Two drivers, in whose truck the oil was being conveyed, were also arrested.

    Parading the suspects at the Obinze Barracks yesterday, Commander Brig-General K.A.Y Isiyaku, who was represented by the spokesman, Capt. Ajemasu Jingina, said three of the suspects were arrested for kidnapping, nine for illegal oil bunkering and one for illegal possession of firearms.

    According to him, the “Operation POLO SHIELD” arrested some persons, Charles Anayo Nwachukwu, Chika Uche and Chucks Samuel Agwu, with a truck (ABB 239XA), conveying 10,000 litres of substances suspected to be unrefined oil on the Port Harcourt/Owerri expressway.

    Isiyaku said two other suspects, Mr. Earnest Oforegbu and Mr. Collins Pig, were arrested on the same road with 600 litres of substance suspected to be petrol in an 18-seater Volkswagen bus (ABN381XA).

    Four others, Anas Mohammed (driver), Abdulmajid Ali (conductor), Christian Nnochiri (loader) and Ejima Emeka, were arrested with a Dangote truck (ICT15D03).

    Emeka is suspected to be the owner of the product.

    He said further that another truck (KMC 136 ZY), also carrying 22,000 litres of substances suspected to be oil was impounded at Eziorsu in Oguta Local Government Area but the driver and his suspected cohorts abandoned the truck and fled.

    Isiyaku said the suspects would be handed over to sister agencies for further investigations.