Tag: Oil

  • ‘Spain spent 6.5b euros on Nigeria’s oil’

    ‘Spain spent 6.5b euros on Nigeria’s oil’

    •Promises to assist in fighting terrorism

    SPAIN has said it spent about 6.5 billion euros last year to  BUY oil and gas from Nigeria.

    Its Ambassador to Nigeria, Alfonso Sebastian de Erice, who visited to the Speaker of the House of Representatives, Speaker Yakubu Dogara at the National Assembly, pledged his country’s commitment to assisting Nigeria in its fight against terrorism.

    The Spanish authorities,  appreciating the existing bilateral relations between Spain and Nigeria, expressed readiness to help Nigeria boost local production of crude oil through partnership to transform the existing refineries.

    He also expressed Spain’s readiness to partner Nigeria in the area of agricultural development.

    He said: “Spain is one of the partners of Nigeria, the first or the second best client. We buy 6.5 billion euros of oil and gas. Yes we are very happy with the exchanges that we have, we need the oil but we want to diversify because we think it’s very important that our economic relations do not be only in gas and petrol, we have to diversify.

    “We want to cooperate with you in agriculture, we have very good agricultural industry, we have comparative advantage in tourism, manufacturing, you have people who are very well prepared. We have several treaties that allow us to work here. It’s a domain that we will have to explore. For us the oil business is important because we need it but we want to diversity and I know that Nigerian authorities also want to diversify.”

    The Ambassador while speaking on terrorist attack in the country, said his country is ready to provide support towards combating the menace.

    He said Spain and relevant agencies in Nigeria have signed several memorandum of understandings (MoUs) on training and anti-terrorism.

    Responding, Dogara said Nigeria appreciates the offer to help in fighting terrorism as Spain has the wherewithal to assist in the fight against insurgency because Spain has faced and overcome such problems in the past,

    He said Nigeria has a lot in common with Spain as it played a major role in stabilising democracy in Nigeria and also that the trade relations between Nigeria and Spain dates back to several decades.

    He called on Spain to further assist Nigeria by looking into the area of agriculture to help diversify the national economy adding that any further relationship that will lead to the development Nigeria is welcome.

    Dogara pledged support for the development of tourism, mineral resources and other sectors that could provide employment for the teeming population of Cross River State.

    He made the pledge when the Cross Rivers State Caucus in the House paid him a courtesy visit.

    The Speaker however urged the lawmakers to shun personal interests, and spoke of the need for the lawmakers to compensate those who suffered during the electioneering campaign by promoting pro-people agenda which include employment generation and security.

    He assured Nigerians that the lingering crisis would be resolved soon and reiterated the commitment of the 8th House towards the implementation of its legislative agenda.

  • Expert urges continued search for oil in Chad Basin

    FORMER Lagos State Commissioner for Energy and Mineral Resources, Mr. Taofiq Tijani, has urged the Federal Government to continue its search for oil in the Chad Basin in spite of fruitless efforts that have gone into the exercise in the past.

    He told The Nation that there is possibility that oil would be found on the Nigeria’s side of the Chad Basin as oil is being produced on Chad’s side of the basin. He was optimistic that there might be oil reserves in the Basin, adding that with the increasing advanced technology, the reserves could be unlocked one day.

    He said: “I support the Federal Government to go back to the Basin because I believe that whatever they must have done there in the past is not exhaustive. If they have found oil on the other side of Chad, there is possibility that we will find oil in our own side too. The technology of exploration has improved. There are better technologies now to search for oil and if we can apply those new technologies, we might be lucky to find oil in our side of Chad. I support that they should go ahead and search for oil there.”

    Tijani also said if the Federal Government wants the oil and gas industry to be taken to the next level, it should make efforts to pass the Petroleum Industry Bill (PIB). The passage will enable investors to bring in their money into the industry. The lack of exploration for new oil fields over the years has been as a result of absence of encouraging legislation.

    He said: “The Federal Government should quickly look at PB that is on the table and possibly examine the areas that are in contention, see whether it can extract those areas and get Bill passed. This is important because what the PIB will do is to rejuvenate the oil industry and encourage people to invest there.

    “There are some areas of the PIB that are in contention and that is why it has not been passed.  If they can just leave that out and debate that later, it will help the industry. They can take those areas that are easy and not in contention, and pass it so that we can get investors to come and operate in the oil and gas industry.

    “There are also areas in the legislation, which the new government needs not go back  to the National Assembly that they can do on the executive level to encourage participants, investors and people to put in money in that industry. Unless they put in money and invest and bring the entire industry back alive, I think we will just be losing ground. The exploration activities that have not increased is because they (the government) have not put the right legislation in place.”

  • ‘Technical development key to oil, gas growth’

    Players in the oil and gas sector have been urged to make technical capacity development as a panacea for their growth.

    Acting Principal/Chief Executive, Petroleum Training Institute (PTI), Effurun in Delta State, Mr. Jacob Avuakporeta Orukele, gave the advice at an oil/gas and allied companies learning managers workshop at the institute.

    In his welcome address on the occasion, he said allied companies  should be preparing their organisations for the challenges ahead.

    At the event, he sought for collaboration in human capital development, staff exchange programme, students industrial attachment and the support of stakeholders.

    In a lecture on, Gas development:  On-shore and off-shore, A level playing field of the future in the Industry,   Dr. Olimma Ufuoma Allison harped on the essentials of gas formation, noting the natural processes in the evolution of a viable oil and gas wells and reservoirs. She listed the global distribution of gas resources and disclosed that Nigeria has the largest gas reservoir in Africa and the ninth in terms of resource availability in the world.

    She underscored the enormous cost of infrastructure for gas development and the government’s effort in addressing such challenges. She stressed the success of the Joint Venture between NLNG and foreign companies in exploitation of gas in Nigeria.

    She reiterated that the investment potential in the industry was a consequence of the rising demand for gas both locally and globally and cited the various local and international companies involved in successful gas business.

    She noted the imperativeness of reduction of gas flaring to meet international regulations as regard to gas flaring actually gave rise to the investment opportunities to comply to national legislative  requirement and international regulatory laws. She reiterated the strategies embarked upon by the government in the nation’s Gas Master Plan to attract investments in gas sector of the economy.

    She recounted the issues of threat to security, inherent risk and low investment in gas infrastructure as the major challenges in gas development projects in the country.

  • Oil yields high tax revenue, says PwC

    Nigeria’s tax structure is skewed towards oil revenue, accounting giant PriceWaterHouseCoopers (PwC), has said.

    PwC Nigeria Head of Tax & Regulatory Service Taiwo Oyedele said petroleum profit tax (PPT) contributed N2.46 trillion, about 53 per cent of the Federal Government’s tax revenue last year.

    Oyedele, who spoke during the Chartered Institute of Taxation of Nigeria (CITN) yearly tax conference in Abuja, said Nigeria became the largest economy in Africa last year after the rebasing of its economy to reflect a more accurate and up-to-date information about different sectors.

    He said the value of the 2013 Gross Domestic Product (GDP) was revised from an initial N42 trillion to N81 trillion, adding that the remarkable difference is due to changes in the number of economic activities considered in calculating the GDP.

    “The new figure took 46 industries and sectors into account rather than 33 which had been used previously. Some of the new industries which made a significant impact on the GDP figures include professional services, manufacturing, entertainment, water, electricity, real estate and telecommunications,” he said.

    Oyedele said Nigeria’s tax to pre-rebased GDP ratio was 12 per cent while post-rebased ratio is eight per cent about five per cent from oil and three per cent from non-oil.  The ratio, he said, is one of the lowest in the world compared to 23 per cent in Ghana, 25 per cent in South Africa and 39 per cent in Brazil to mention a few.

    “Another interesting benchmark though not commonly cited is the tax revenue per capita. This is about N38,000 for Nigeria compared to over N450,000 for South Africa; N200,000 for Ghana and N1.8 million in the United States,” he said.

    He said the low level of tax revenue can be attributed to a number of factors including the cumbersome and inefficient tax administration system, high level of tax evasion, ambiguities in the tax laws and insufficient utilisation of tax revenue for social services and visible development.

    “Some of the key challenges facing the realisation of a truly diversified economy capable of generating revenue beyond oil is the difficulty in collecting taxes from the informal sector, which makes up about 76 per cent of the Nigerian Economy. For this reason, the tax authorities seem to focus a lot of their energy on taxing a small number of visible companies and individuals.

    “Another issue is multiplicity of taxes and unclear fiscal federalism. The Second Schedule of the Nigerian constitution 1999 grants the Federal and State governments the power to legislate on tax matters based on the concept of federalism and the devolution of fiscal powers,” he explained.

    Oyedele said both the Federal and State government have been assigned specific areas of tax in which they can legislate, but they have some common areas as well.

  • Oil rises on Greek deal hopes

    Oil prices has risen toward $64 a barrel, joining stronger financial markets on speculation that European Union leaders could avert a Greek bankruptcy.

    Global stocks, the euro and peripheral euro zone bonds all rose on Monday, lifted by a wave of optimism that Greece and its international creditors will strike a last-minute deal that will see Athens avert default.

    Brent crude for August delivery was up 53 cents at $63.55 a barrel by 7.30 a.m EDT, after falling nearly 2 per cent over worries about a potential Greek debt default.

    Front month United States crude was 40 cents higher at $60.01 a barrel.

    Prices rebounded from early lows after the EU’s positive response to Greek Prime Minister Alexis Tsipras’s latest proposals to try to resolve the country’s debt crisis ahead of a meeting of European leaders on Monday evening in Brussels.

    “Hopes that agreement could be reached in the debt dispute with Greece at today’s EU summit are lending buoyancy to oil prices as the new week begins,” Commerzbank analysts said in a note to clients.

    But a crude oil overhang, particularly in the Atlantic basin, is limiting gains.

    Around 10 million barrels of unsold crude, mainly from Nigeria, are held in offshore storage despite strong summer demand, Morgan Stanley said in a research note on Monday, potentially creating a negative outlook for oil in the second half of the year.

    “If there are this many challenged cargoes in this strong demand environment, we worry about the outlook for physical oil this fall (autumn) when crude runs and gasoline demand fall seasonally,” the note said.

    High domestic U.S. oil production, which has held up at around 9.6 million barrels a day, the highest level since the early 1970s, continued to weigh on oil prices.

    U.S. oil producers added a rig each in the key Permian and Bakken shale basins last week, fuelling worries over high domestic oil output, even as the total number of active U.S. rigs fell last week, data have showed.

    Although U.S. oil production was expected to decline slightly between the second and third quarters of 2015, output

    “would continue to grow in 2016 by 150,000 barrels per day at the current rig count,” Goldman Sachs said.

  • Oil and missed opportunities

    Some Nigerian intellectuals in particular and development scholars in general criticize the colonial education system as inadequate for the progress of the colonized. This criticism should be re-examined given the poor state of education in today’s Nigeria. Recall that colonial education produced the scientists, engineers, and administrators who produced war resources and effectively managed institutions and organizations in Biafra during the Biafra-Nigeria war.  Because many of those scientists and engineers and their equally brilliant counterparts in other parts of the country have retired from active work or passed on, the country cannot have them back. Nor does the current educational system possess the capacity to reproduce their type.

    An impressive number of academics educated in some of the best universities in Europe and America continued to produce the cream of bright and well-educated manpower in the country’s universities after the civil war. Successive crops of equally bright Nigerians sought higher education in foreign countries. Many returned home and took employment in the public and private sectors.  Many graduates of Nigeria’s primary, secondary, and tertiary institutions in colonial and immediate post-colonial periods often describe their educational experiences in awe.  The environments in which the three levels of education take place today are viewed with disgust by the same alumni who were awed by their educational experience.  What happened to the excellent and dedicated teachers, good physical infrastructure across the three layers of education, and graduates with functional skills inherited at independence?

    Cracks in Nigeria’s educational system had started by 1976 when the Obasanjo administration hurriedly implemented universal primary education. The resulting shortage of teachers led to recruitment of many unqualified teachers into the primary school system. Though the Shagari administration of 1979-83 is credited with founding an impressive number of unity schools and federal universities, the same administration badly managed the Nigerian economy. The resulting economic crisis left the educational sector under-funded and created the beginning of an economy unable to provide employment to the products of education. Since then, subsequent military and civilian administrations have neither created a strong economy nor have they been able to reverse the decay of the education sector. Hence decline in the quality of education which gradually started in 1976 and accelerated in the 1980s and 90s continues to the present day.

    A critic may argue, and rightly so, that some of the recipients of the high quality education of  the colonial times and immediate post-independence years held important positions in the country but did not put Nigeria on a better footing than they found it, their good education notwithstanding. Bad leadership at local, state and national levels continues to have a ‘backwash effect’ on management of public and private institutions.  Indigenous successors of colonial functionaries are supposed to build upon, improve, or change for the better, the institutions they inherited from erstwhile colonists. The failure of the Nigerian education system is another case of a lost opportunity.

    Another missed opportunity lies in the succession of military governments that ruled Nigeria for 25 years after the civil war. The military had the singular opportunity to shepherd Nigeria’s development without opposition. They operated a quantitatively small state apparatus of military councils made up of a few soldiers, advisers and members of cabinet. The small state apparatus saved or was supposed to save Nigeria a lot of the revenue derived from crude oil. Military governments, especially those that ruled the country from 1983-1998, conjure a bitter taste in the mouth whenever they are mentioned, some because of their authoritarianism, others because of their incompetence and corruption.

    Why should one blame a dictatorship for not shepherding national development while democracy has become the vogue in the global system?  Government shepherding of economic development is not new. Leaders of Japan, Taiwan, South Korea, and Singapore used a government-directed approach to produce miracle economies and influenced the world to see governments that direct national development as developmental states. In the case of Nigeria, military dictatorship left the country worse than it found it and missed the opportunity of using Nigeria’s oil wealth to transform the society in a political milieu undistracted by opposition or concern for elections.

    Nigeria is now an electoral democracy. A developmental state can effectively operate in a democracy. But a National Assembly of 109 Senators and 360 members of the House of Representatives cost huge amounts of money in salaries and perquisites in an economy in which one natural resource is the primary source of national revenue.  Moreover, Nigerian legislators are identified as the highest paid in the world. Each legislator earns 116 times the country’s GDP/capita, so goes the claim.

    Debt-relief, another missed opportunity, was a source of fresh air to many Nigerians who follow national affairs. The forgivers of the debt relished the optimism that Nigeria had been re-kitted for a fresh and dependable start. The empirical situation has proven that to be false optimism. Data published by the World Bank in 2015 show that Nigeria’s external debt stood at 13.8 billion dollars in 2013.  The years 2012 and 2013 were good years for oil prices yet the government either borrowed or intended to borrow from external sources to fund the national budgets of those years.  It is difficult to explain this debt syndrome except to say that incompetence, corruption, waste, and haphazard governance at all levels of government consume the huge national revenue from oil.

    The average price of crude oil remained at over $100.00 in 2014 until it began a downward spiral in September of that year. The fall of oil prices in the last quarter of 2014 was unique. It was, perhaps, the first time conflict in the Middle East coupled with a meeting of OPEC did not put the world in a crisis mode for energy. The Middle East was and remains at the peak of violent conflicts, yet crude oil prices have not skyrocketed and major financial markets of the world have not experienced a shakedown. What might be the reason for this unusual equanimity in the world energy sector and financial market while the crude oil basket of the world burns?

    In a brief exchange during a debate on debt relief, I stated that Western countries would not fold their arms in a fatalistic response to the biting problem of high oil prices. That they, as problem-solvers and shapers of their future, would someday find substitutes for oil, solve the problem of dependence on foreign oil, and take oil-producing countries by surprise. That time has come only 10 years after that exchange.

    Advanced and some advancing countries have diversified their sources of energy. They produce and use electric cars, bio-fuels, refined coal, wind and solar power. ‘Hydraulic fracturing popularly known as fracking has made the extraction of energy cheaper’.  The top 10 users of alternative energy belong to the top 10 economies in the world. The United States, the giant of global oil consumption has increased its rate of production of crude oil and natural gas.  And more countries continue discover and produce crude oil.

    The fall in oil prices is therefore a warning to a country like Nigeria whose leaders squandered opportunities to take the country even to the threshold of economic development. The excess crude account which is supposed to be a buffer fund plunged to $2.45 billion in December 2014 in response to the fall in oil prices.  This means that the idea of saving part of the excess crude account for future generations is on shaky ground if nothing is done to diversify, broaden and deepen the economy. Consequently, building a robust economy is the greatest legacy one generation can leave for the other.

    • Ukaegbu, Professor of Sociology & National Development writes from USA
  • PENGASSAN urges Buhari to support oil workers training

    PENGASSAN urges Buhari to support oil workers training

    The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has urged President Muhammadu Buhari to support the workers in the oil and gas industry for training, research and development in all aspects of petroleum operations and technology to enhance the acquisition of skills and foster competitiveness.

    The oil workers’ union has also called for effective utilisation of the seismic data and other discoveries made under the Petroleum Technology Development Fund (PTDF) research partnerships as well as the exploration of values created by the PTDF trained scholars to augment the industry’s skills/expertise gap.

    PENGASSAN’s President, Comrade Francis Johnson made the call in Lagos while briefing reporters.

    He said: “We call on President Muhammadu Buhari to aggressively support the workers in the oil and gas industry to deepen training, research and development in all aspects of petroleum operations and technology to enhance the acquisition of skillset/expertise and foster competitiveness because the key driver of any industrial and economic growth is Research and Development.

    “The need to continuously train oil workers and improve on research and development is one of the most important factors that will cause the effective drive which will make the oil sector accomplish optimal performance”.

    According him, the PTDF has also done extensive research which led to the development and patenting of Zeolite, a catalyst for the improved refining of heavy crudes, which is produced from local clay.

    “In view of the position of President Buhari on the need to resume exploration activities in the Chad Basin, we are aware that the PTDF has done extensive research on the chad basin from 2003 to date through one of its upgrade facilities at the University of Maiduguri on the “effect of volcanic and intrusive generation and accumulation of hydrocarbons in Nigeria’s flange of the Chad Basin,” he said.

  • Navy, JTF arrest suspected oil thieves  in Bayelsa

    Navy, JTF arrest suspected oil thieves in Bayelsa

    Three suspected oil thieves have been arrested by operatives of the Central Naval Command (CNC), of the Nigerian Navy, in Ekeremor Local Government, Bayelsa State.

    It was gathered that the suspects said to be operators of illegal refineries and two of their boats christened, “Emmanuel”, were rounded up on June 4.

    The Flag Officer Commanding, CNC, Rear Admiral Stanley Ogoigbe, said at the weekend that eight pumping machine allegedly used by the suspects to steal the product were seized by the naval operatives.

    Ogoigbe, who handed the suspects over to the Nigeria Security and Civil Defence Corps (NSCDC) for prosecution, said they were arrested along the creek of Bilabiri in the west senatorial district of the state.

    He said the suspects were tricked into taking a naval patrol team to an illegal refinery camp in the deep mangrove.

    He said their speedboat with the inscription, Emmanuel, gave them away as it was same with another previously recovered by the navy at the illegal refinery camp.

    The FOC reinstated the determination of the command and other security agencies to intensify the ongoing war against crude oil theft, pipeline vandalism and other criminal activities in the Niger Delta.

    He solicited the cooperation of the public in the war against economic sabotage.

  • Oil drop: Naval chief exonerates personnel

    Oil drop: Naval chief exonerates personnel

    The Chief of Naval Staff (CNS), Vice Admiral Usman Jibrin on Monday exonerated his personnel from the drastic fall in crude oil production, attributing it to the closure of main-folds by some International Oil Corporation (OIC).
    Jibrin who was in Lagos to commission some projects of the Western Naval Command (WNC) as part of activities lined up for the navy’s 59th anniversary, denied the decline in crude oil production from about 2.4 million barrels per day to 400 was as a result of illegal bunkering and oil theft at sea.
    He noted that as a result of pipe line vandalism, the OIC engaged in forced closure, thereby reducing the quantity drastically, scoring his men high in the fight against criminality at sea.
    “As a result of pipe line vandalism, IOC decided to shut down some of their main-folds, hence, they cannot meet the quota allocated to Nigeria. In our resolve to address crude oil theft, we have arrested over 80 vessels including badges,” said Jibrin.
    He also used the opportunity to appeal to Nigerians to empower the navy to prosecute sea criminals.
    Dissatisfied with the judgment debts and garnishee orders against the navy as a result of failures of prosecuting agencies, Jibrin highlighted the implications of keeping impounded vessels for too long at the jetties.
    Jibrin, who had earlier expressed displeasure on the huge judgment debts on the navy’s account, noted that if the force is allowed to prosecute its suspect, its legal department would ensure due diligence and speedy prosecution.
    Although he acknowledged that there would be some constitutional amendments for prosecutorial powers to be vested on the navy, Jibrin however urged the National Assembly to give the force temporary approval to that effect.
    According to the CNS, “When these criminals are arrested and handed over to the Economic and Financial Crimes Commission(EFCC); The Nigeria Police or the Nigerian Security and Civil Defence Corps (NSCDC), they are taken to court but we don’t get prompt judgement. “Sometimes these arrested ships create problem for us. For instance ,where we berth them will reduce the length of sea room for other ships to ply the waterways, especially within the channels. Our jetties are now being damaged by these ships.
    “As if that is not enough, on each ship we deploy an officer and a minimum of four Ratings. On daily basis we pay to maintain them. This, I must tell you was never budgeted for.
    “That is why as much as possible, we want quick dispensation of justice. We have written to seek permission from the Ministry of Justice but we have not gotten because I am told it would need constitutional amendment before that is given to us.
    “The area we are dealing with now is how to push it forward to the National Assembly, so that they will look and see if there is still a
    possibility. However, if that won’t be quick enough, we are appealing for a temporary approval
    for us to take these criminals to court on our own.
    “If the EFCC, Nigerian Police and the NSCDC have this capacity, we have lawyers also. The most astonishing part of the problem is when you have a ship with stolen products. Who then is wasting whose time in delivering judgement?”
    Some of the projects commissioned included a digital access gate at NNS Beecroft, Apapa and others at the Navy town, Naval Air base Ojo, as well as the inspection of an ongoing construction of a 24 by two bedroom flats that would accommodate Ratings.

  • Petralon eyes first oil from OPLs 2005, 2006

    Petralon eyes first oil from OPLs 2005, 2006

    An indigenous exploration and production (E&P) company, Petralon Energy,  has recorded progress in its oil block located in oil prospecting leases (OPLs) 2005 and 2006 in Rivers State. It may hit first oil in the next few months.

    Petralon farmed into the Dawes Island field in OPLs 2005 and 2006 in July 2014, in partnership with Tako E&P Solutions Limited. The Dawes Island marginal field located in OPLs 2005 & 2006 was formerly oil mining lease (OML 54). The oil and gas asset is in swamp terrain about 15km southwest of Port Harcourt in Rivers State and occupies an area of 40km2.

    The field was previously owned by Chevron Nigeria Limited as OML 54 but it is currently owned by Eurafric Energy Limited.