The Nation Newspaper

Tag: Oil

  • Oil, gas entrepreneurs to tap from CBN’s N220b MSME cash

    Oil, gas entrepreneurs to tap from CBN’s N220b MSME cash

    The Federal Govern ment has unveiled an entrepreneurship, empowerment and employment initiate for young Nigerian entrepreneurs in the oil and gas industry.

    To speed up its take off, a window has been opened through the Central Bank of Nigeria (CBN) for qualified young entrepreneurs to access funding from the N220 billion Micro Small Medium Enterprises (MSME) fund.

    This new initiative, under the Youth Empowerment Strategy of Nigeria for the oil and gas sector will be executed through the Nigerian Content and Development Monitoring Board (NCDMB).

    The entrepreneurship, empowerment and employment programme will be manned by an Advisory Team from Annabel Group, that will prepare young Nigerians to become entrepreneurs in the oil and gas industry.

    Under the programme, young registered entrepreneurs would be equipped with training and funding to participate in the oil and gas sector to create jobs remain sustainable and expand globally.

    Speaking at the launch of the youth entrepreneurship scheme in Abuja yesterday, the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said the initiative would attract participation from the oil and gas sector of the economy as the government would assist young Nigerians to become Small and Medium Scale Entrepreneurs in the oil and gas sector.

    Addressing the youths gathered at the event, Aganga said: “The greatest asset you have now is your brain and that is where the future is.

    “The power of the youth in economic development is very important today. So any country that does not tap the potential of the youth can’t compete globally.

    “It is important we reinvent ourselves and position our economy for industrialisation and entrepreneurship.”

    The Chief Executive Officer, Annabel Group, Mr. Nicholas Okoye said the initiative is an idea that was borne out of the need to empower Nigerians in the oil and gas industry.

    Annabel’s role in this initiative he said “is that of facilitation by supporting with bankable business ideas. We want to take advantage of the Nigerian Content Development Act by assuring Nigerians to participate in the oil and gas sector to become the next generation of billionaires.”

    “A commitment has been received from the Central Bank of Nigeria that part of the N220 billion MSME fund would be deployed to fund MSMEs in the oil and gas sector through the initiative,” he said.

  • We’re committed to building capacity in oil, gas, says bank

    Access Bank Plc is suporting the  Oil and Gas Conference in Abuja, which will end on Thursday.

    Executive Director, Corporate and Investment Banking Division, Access Bank, Elias Igbinakenzua, said the bank was delighted to be a part of the conference, adding that its involvement in the sector was in line with the commitment to contribute to the economic growth of the country.

    “Our support for the oil and gas industry remains strong. This further demonstrates our commitment to increase the capability of corporate customers as we continue to put them first in the heart of our business,” he said.

    Igbinakenzua said that Access Bank has been a major sponsor of the conference, noting that the bank’s participation at the event reflects its focus on being a strategic partner to key stakeholders across the industry value chain.

    He promised the bank’s continued partnership with and assistance to the oil and gas companies by supporting initiatives that will create business opportunities and investments in Nigeria and the African continent.

    He said: “Access Bank has played, and will continue to play a significant role in supporting the growth of the industry by arranging appropriate financing for operators to enable them execute their projects.”

    As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. The bank strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant, he added.

  • Oando increases output with Qua Iboe first oil

    Oando increases output with Qua Iboe first oil

    Oil and gas giant Oando Energy Resources (OER), the upstream arm of Oando PLC, has begun production from its Qua Iboe Field.

    The feat is despite the slump in oil prices, the impact on global economies and investor confidence in the oil and gas sector being at an all-time low.

    In 2003, the Department of Petroleum Resources (DPR) awarded 24 marginal fields to 31 indigenous companies, a move initiated by the Federal Government to grow production by expanding the scope of engagement in the upstream sub-sector through indigenous participation.  However, reports indicate that this proactive initiative is yet to make a significant impact on Nigeria’s petroleum sector, worsened by the present terrain of a slump in oil prices.

    At present,  only eight of the 24 marginal fields awarded are fully operational with the rest still grappling with financial and technical challenges.

    This redundancy is further aggravated with the continued decline in oil prices. With austerity measures being implemented by the government as part of the oil price shock, local players are increasingly seeking methods to enhance the economic productivity of their operations via a diversified portfolio.

    Oando Energy Resources holds a 40% working interest in the field. In its capacity as technical services provider, the company, together with the operator and 60% owner, Network Exploration and Production Nigeria Limited (NEPN), brought the field from conceptualisation, through development, to first oil in a matter of 2 years, a record time for fields of this nature in Nigeria. Following the completion of the Maximum Efficiency Rate (MER) testing, commercial oil production from the field’s reservoirs has now commenced at 2,150boepd. The crude processing facility commissioned in the fourth quarter of 2014, was delayed until the completion of the associated cluster crude delivery and sales infrastructure into the Qua Iboe Terminal for commercial production.

    Commenting, Pade Durotoye, CEO Oando Energy Resources said: “We are delighted to have achieved this milestone, having taken this field through the full cycle of asset development, from drilling to facility engineering, construction and commissioning and also increasing our organic production contribution from our portfolio. We will now be focusing our attention on maturing the potential of this field through seismic acquisition and interpretation, and a possible multi-well drilling program. We hope the Qua Iboe field will follow in the footsteps of our successful Ebendo field, where production has increased from 900bopd (gross) at inception to over 7,500bopd (gross) through the identification and drilling of new reservoirs in the field”.

    The opportunity is clear in that these marginal fields can be turned into valuable production assets if the oil and gas companies have the requisite financial, technical and local capability.  Oando has realized this opportunity barely nine months after the completion of its landmark $1.5bn ConocoPhillips Nigeria acquisition deal.  This achievement reinforces its technical capabilities and further crystalizes Oando’s position amongst majors in the sector. The company has grown exponentially in its oil production from 5,000boepd to 53,100boepd; recent actions are evidence that despite the gloomy outlook for the sector Oando is well positioned to continue to create and realise value for its shareholders. With a focus on organic growth such as ‘Qua Iboe’ and more prospective acquisitions and mergers, the company is well on its way to reaching its daily output target of 100,000boepd in the coming years.

     

  • ‘Non-passage of PIB delaying investments in oil, gas sector’

    There has not been any major investment in the oil and gas sector in the last four years, due to the non-passage of the Petroleum Industry Bill (PIB) by the National Assembly, the Managing Director and Chief Executive Officer, Frontier Oil Limited, Dada Thomas, has said.

    He said Nigerians should hold the lawmakers responsible for the non-passage of the PIB.

    Thomas said: “I don’t believe that the bill would be passed into law before this National Assembly goes. I think the PIB will have to be addressed by the incoming National Assembly.’’

    He said as long as there is uncertainty surrounding the bill’s passage, the exploration and production firms might not want to invest.

    “The damage is that there has not been any exploration in Nigeria to find new oil or gas reserves. We need to make sure that the cloud of uncertainty, which is the lack of passage of the PIB is removed so that people know, the rule of the game. With the uncertainty removed, the regulators will be able to know what their roles and responsibilities are, and every stakeholder, including the communities, will know the rules of the game in the operation of the industry,” he said.

    Thomas urged political leaders   to put politics aside and think of the economic well-being of the people and the nation. He said: “They should put politics aside and do what is good for Nigerians and investors so that we have a bill that would address all the concerns and needs of the various stakeholders including the investors. We need to show commitment to the growth of the industry.”

    Also, the Managing Director, Treasure Energy Resources Limited, Rivers State owned Oil and Gas Company, Eddie Wikina, in a telephone interview, agreed that the government is prolonging investments in the country due to the non-passage of the bill.

    He also listed corruption and insecurity as other major factors affecting investments in the sector.

    According to him, if the bill is passed into law, it will help to check corruption in the Nigerian National Petroleum Corporation (NNPC). He said that the government has  misapplied the funds appropriated to the corporation by put them in wrong priority areas.

    Since the NNPC is not autonomous of the Federal Government, it acts on instructions.

    Wikina claimed the government was aware of this and continued to play down the passage of the bill.

    “Such a bill as the PIB has been shrouded in so much secrecy that certain unscrupulous elements begin to profit from the quagmire. Such a bill should be openly debated in the Senate and passed immediately in the interest of the nation,” he stated, urging the lawmakers to pass the bill before they go in May.

  • ‘Restructure oil industry’

    An expert, Dr. Deinde Omotayo, has called for the restructuring of the oil sector.

    He said this became necessary because of the challenges facing the Nigerian National Petroleum Corporation (NNPC)  and the sector.

    Speaking in Lagos, Omotayo said despite its role as the nation’s highest foreign exchange spinner, which amounts to about 90 per cent, the industry has been bedeviled by lack of transparency, corruption and theft.

    He said he was worried that over 40,000 barrels of crude oil are allegedly stolen daily by thieves, adding that despite the presence of security agencies, such as the Joint Task Force to police our water ways, the oil saboteurs still effortlessly have their way, leaving the nation bleeding.

    Omotayo, a medical practitioner and stalwart of All Progressives Congress (APC), said in addition to appointing more committed and sound professionals to manage the industry, both the downstream and the upstream sectors of the critical industry should be re-focused to meet the challenge  of modern management and set them on the sustainable part of enhancing the country’s development.

    He accused the Federal government and its gents of running the NNPC aground.

    He said whereas, Ghana produced 250,000 bpd, as against Nigeria’s four million bpd for domestic consumption, the impact of the industry is not felt by the people.

    He warned Nigerians to change their over reliance on oil revenue, saying that this could backfire, especially with the global oil price fall, which had led to a sharp drop in our foreign exchange earnings.

    He said greater investment in modern technology for exploration, drillings and manpower needs must be committee to the sector enhanced operation and value addition.

  • Oil: Nigeria, others push for extraordinary OPEC meeting

    Oil: Nigeria, others push for extraordinary OPEC meeting

    As oil inches back to $60 per barrel Nigerian, Venezuelan and Ecuadorian officials are leading the calls for an extraordinary meeting of the Organisation of Petroleum Exporting Countries (OPEC) ministers to haggle over the cartel’s production quota to the wider oil market.

    According to Forbes’ report, which quoted a recent article in the Financial Times, Nigeria’s Minister of Petroleum Resources and OPEC President Diezani Alison-Madueke, expressed open frustration at the attitude of the OPEC kingmakers –Saudis to the current oil market situation. “Almost all OPEC countries, except perhaps the Arab bloc, are very uncomfortable….We are very cognisant of the Saudi position,” she said.

    Forbes analysis maintained that the Saudis, and by extension most of the Arab bloc comprising of Kuwait, Qatar and the United Arab Emirates, won’t not give ground in the current almighty tussle for market share.

    OPEC ministers are next scheduled to meet on 5 June, 2015 at their Viennese secretariat following the organisation’s international seminar for 2015. Forbes stated that anecdotal evidence I have from reliable contacts suggests that is not changing and for one reason alone – the Saudis won’t have it, and by extension neither would the Qataris, Kuwaitis and Emiratis. So what is the intention of non-Arab members in calling for it?

    According to Forbes, first motive is to get a reaction out of the market. For example, after the FT published Alison-Madueke’s quotes, Brent rose albeit for a precious few moments but not nearly as meaningfully as she would have wanted. Given the supply glut, these things no longer have the impact they used to. Second motive is to put out their blindingly obvious unease to the Saudis, hoping against all hope for a shift in position.

  • N/Assembly accused of delaying investment in oil, gas sector

    There has not been any major investment in the Nigerian oil and gas sector at least in the last four years and there has not been additional increase in the nation’s oil and gas reserves in the last ten years due to non- passage of the Petroleum Industry Bill (PIB), which has been before the National Assembly for many years, the Managing Director and Chief Executive Officer, Frontier Oil Limited, Dada Thomas has said.

    Thomas said that Nigerians should hold the National Assembly accountable for lack of passage of the Petroleum Industry Bill. He noted that the bill has been in the making for more than four years until now we have only May 29, 2015 for this current regime to be over. “I don’t believe that the bill would be passed into law before then, I think the PIB will have to be addressed by the incoming National Assembly,” he stated adding that the country has lost so much for the non-passage of the bill.

    The Federal Government has over the years set a target to achieve oil reserves of 40 billion barrels 4 million barrels per day production but how this vision could be realised remains doubtful as the government lacks the political will to pass the important bill into law, industry stakeholders said.

    Speaking with The Nation at an oil and gas event in Lagos, Thomas stated that as long as there is a cloud of uncertainty as to whether or not to pass the bill, the exploration and production companies may not want to invest as they ought.

    “The damage is that there has not been any exploration in Nigeria to find new oil or gas reserves. We need to make sure that the cloud of uncertainty which is the lack of passage of the PIB is removed so that people know the rule of the game. With the uncertainty removed, the regulators will be able to know what their roles and responsibilities are, and every stakeholder including the communities will know the rules of the game in the operation of the industry,” he said.

    Thomas urged those at the corridors of power to put politics aside and think of the economic wellbeing of the people and the nation first and foremost. He said: “They should put politics aside and do what is good for Nigerians and investors so that we have a bill that would address all the concerns and needs of the various stakeholders including the investors. We need to show commitment to the growth of the industry.”

    The Managing Director, Treasure Energy Resources Limited, Rivers State owned Oil and Gas Company, Eddie Wikina, in a telephone interview also agreed that the government is prolonging investments in the country due to non-passage of the bill, which he described as prolonging the evil day.

    He also mentioned corruption and insecurity as other major factors that push investment out of the country. According to him, if the bill is passed into law it would help to check the level of corruption in the Nigerian National Petroleum Corporation (NNPC). He said that the government has severally mismanaged the funds appropriated to the corporation by having wrong priorities.

    Since the NNPC is not autonomous of the federal government, it acts on instructions. Wikina said that the government is aware of this and continues to play down on the passage of the bill so that corruption would continue to thrive in the system

    “Such a bill as the PIB has been shrouded in so much secrecy that certain unscrupulous elements begin to profit from the quagmire. Such a bill should be openly debated in the Senate and passed immediately in the interest of the nation,” he stated urging the government to pass the bill within the remaining three months.

  • Oil rallies raises OPEC demand forecast

    Oil rose for a third straight session on Monday as OPEC forecast greater demand for crude this year.

    Data from last week showed that  the United States (U.S.) oil rig counted  at a three-year low.

    U.S. crude futures, or WTI, rose $1.41, or almost 3 per cent, to $53.05 after rising to $53.40 earlier.

    WTI’s front-month contract,in  March 2014  was at its narrowest discount in a week to the second month. April recorded strong gains in oil for prompt delivery reduced some of “contango” that made it profitable to store crude for future delivery.Both WTI and Brent have gained nearly 20 per cent since a January 29, 2015  rebound inspired by better confidence in the supply outlook for crude following a seven-month-long selloff that took prices down by more than 50 per cent.

    “The harder you fall, the stronger you often rebound, from a statistical point of view,” said Phil Flynn, analyst at the Price Futures Group in Chicago.

    “But I think there is still a lot of denial that the market has hit bottom, and you’ll continue seeing people standing in front of the rally for a selling opportunity.”

    While Monday’s sentiment in oil was predominantly bullish, some traders sounded caution over rising tensions surrounding Greek debt negotiations, and how that could affect the broader European macroeconomic picture and demand for energy.

    The Organisation of the Petroleum Exporting Countries (OPEC), forecast demand for the cartel’s oil will average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous forecast.

    In its monthly report, the group also slashed its outlook for crude supply growth in non-OPEC countries, citing a slowdown in the U.S. shale boom and lower capital investment by energy firms.

    Meanwhile, data from U.S. oil services firm Baker Hughes on Friday showed that the number of rigs drilling for oil in the United States fell to 1,140 last week, the lowest since December 2011.

  • Why I abandoned oil for agro-allied business-Elephant Group MD Owoeye

    Why I abandoned oil for agro-allied business-Elephant Group MD Owoeye

    Tunji Owoeye, a chartered accountant, is the Managing Director of Elephant Group, one of the leading agro-allied companies in Nigeria. He is also the Chairman of Rice Investors and Distributors Association of Nigeria. He spoke to OKORIE UGURU about his life and business. Excerpts:

    You trained as a demographer. What are you doing in business?

    My training as a demographer was just a phase of my life. It was just the first course of study. With my first degree in Demography, I trained as a chartered accountant in some of the renowned accounting firms that we have in the country. From there, the interest in commodities came up. We started that in 1994.

    At what point did you decide that you’d had enough of paid job and wanted to be on your own?

    Between 1991 and 1993, I was responsible for driving the revenue of a savings and loans company, as the general manager. We found out then that with the scarcity of foreign exchange, some of our customers were always looking for foreign exchange. We saw the scarcity and we saw a service scam in the foreign exchange system in the country. Because of that, I and one of my colleagues in the industry then decided to look at servicing the gap here. And how would we do that? We saw that one of the opportunities was to engage in foreign exchange earning. And what could give that other than oil is export of agro-commodities. That was how we started the Elephant Group in 1994.

    You started with oil and agro-allied products in 1994. One would have thought that somewhere along the line, you would leave agro for oil, but you left oil to concentrate on agro-allied products. What informed that?

    Two reasons informed that. One, I think it was divine. It was how God had ordained it to be. Two, we saw that there were limitations in growth in the oil industry then, because it was oil services. We saw that for us to grow, we needed to partner with the oil majors, the oil-producing companies. Then and even now, I think it is dependent on the way the producing companies feel before you are given the opportunity to be part of the value chain. In agro business, we found that there are no limitations. It is not dependent on PPRMC or on relationship with a particular CEO of an oil producing company you know. It was a free entry on agro business then.

    It is good to work in an environment where you are not limited. That was a driving force in taking agro-business very seriously. If you knew what we wanted to do, we had market knowledge of origination, destination and quality, and package of finance. I think the opportunity was there for one to claim, and we took advantage of that.

    Why the choice of cashew for example?

    We also, in deciding which business to go into, looked at the ones that had the scale. So, we picked cocoa. Cocoa had the largest scale of export commodity system. And next to cocoa is cashew. We played cocoa, we played cashew, we played sesame, gum Arabic, cotton and all the agro commodities that were available in the scales that they were available.

    Do you think this line of business is still lucrative for potential business entrepreneurs now?

    It was and it still is. The only challenge has been market movement forces which everybody would have to live with. Opportunities in business in these products have never ceased. The only limitation is that government had not given the right support before the current administration. They are the ones that actually looked into agric as a business. Prior to that, unfortunately, previous governments did not see it as the next crude for Nigeria.

    You are the chairman of the Nigerian Rice Investors Group, which includes importers and millers. We have a situation whereby going by the policy of the government, Nigeria is supposed to stop importation of rice this year. How do you see that?

    Yea, you will first of all agree with me that policies are budgets, plans, and at any point in time, they are not sacrosanct. They are things that are flexible. And as you progress in the execution of a particular policy, you begin to flex it to take cognizance of indices that would impact positively or negatively on the policy. When this government came in 2011, it was a policy that was rolled out. It is laudable; one of the best policies that I have seen. We embraced the policy but we felt that the policy was a bit aggressive. As government plans, economic saboteurs also plan to sabotage policies. As laudable as the policy has been, the smugglers tried to sabotage it.

    Why would they do that when government increased tariffs to discourage importation and encourage local producers?

    It is a fantastic policy; I think government in its wisdom failed to realise the devastating effect the activities of smugglers are going to cause through the neighbouring countries. Unfortunately, Nigeria as a country could not stop this because it is not in control of the policies of neighbouring land-locked countries like Niger, Benin Republic and Cameroon. So, this has devastating effects on the policies to the extent that when tariffs in Nigeria were high and tariffs in these neighbouring countries were zero, smugglers began to have a good day.

    Of course, economic saboteurs moved in and tampered with the lofty ideas of government. Thanks to government, as a soon as this was realised, we cried to the government that this is the problem that we were having, to the extent that smuggled rice was getting cheaper than locally produced rice. Government rose in our support and reversed the tariff. That is what we’ve had since July 2014. So, they reversed the policy irrespective of the losses Nigeria was going to incur in terms of tariffs. They reversed it to import substitution.

    Do you think that the policy on self-sufficiency in rice production can be achieved without the government tackling the issue of smuggling?

    A lot of things have been brought in. I think that when government is not doing something right, we as Nigerians are quick to condemn the government. But when government is doing something good, we don’t encourage the government so that they are also encouraged or motivated to do much more. Rice policy is a good example. For two years, nothing was happening because of the effect of sabotage from the neigbouring countries. Now, some of the policies that the government has put in place to assist local producers and investors include supporting us with subsidised fertilisers. Government takes off 50 per cent and farmers pay 50 per cent.

    Recently, the government put in place the mechanisation scheme. About N300 billion was invested in that. What that means is that we are moving from the era of hoes and cutlasses to mechanisation. That is going to improve the fortune of the economy of this country and Africa. The government has also done so much in the area of irrigation. At Elephant Group, in our rice farm, we have crops in both the wet season and the dry season because government is supporting us with irrigation scheme.

    There is also the common tariff that operates within ECOWAS. When we had a tariff of 110 per cent, Benin Republic had zero. That would negatively impact on our own policy. Now, the government has fought seriously that ECOWAS should go on the same tariff, and that started this January.

    How about implementation?

    It has to do with the ECOWAS team.

    I know that your company, outside the huge investment in Nigeria, has other investments around Africa. When you decided to launch out as an entrepreneur 1994, did you know that you were going to grow this big? What were the things you did to grow your business to the level is now?

    It is only God that knows tomorrow, but there are certain things, basic qualities that we should protect. Number one, integrity; nobody knows where he is going to be tomorrow; it is only God that makes a way. But as human beings, we must have a mission and a vision, which I do have by the grace of God. You must be disciplined, you must have a goal, and you must have the route towards your goal. When you have all of this and you put your best foot forward and put your whole body into what you do, of course growing big would not be anything that will be far away from you. Naturally, it would come by the grace of God.

    As a business man, what is your biggest asset?

    My time.

    Time? Not integrity or knowledge?

    You have to be conscious of the fact that the biggest thing you have in terms of resources is your time. You have the same 24 hours like every other person, so how you use your 24 hours is most important. Your time is your money. A lot of people have access to knowledge, but how they deploy their time is important. Integrity is also key. These are assets that cannot be taken away. Let your word be your bond. I think those are the two things that can make anybody to get to any level-time management and integrity.

    So, are you all about business?

    No, not at all. It is all about business and service to God.

    A lot of people would tell you that the two, business and service to God are incompatible.

    I disagree. Jesus Christ Himself is the greatest business man that ever lived. I don’t want to go into the scriptures. Why do we do business? I think that is the first question. It is to earn revenue. When you earn the revenue, what do you want to do with it? You are not impacting on the world until you begin to put smiles on the faces of other people. There is no way you can say you are successful if you are unable to put food on the table for fellow human beings; if you are unable to put smiles on the faces of the less-privileged; if you are unable to clothe people who don’t have clothes; if you are unable to support people to go to school; if you are unable to offer employment to people.

    There are reasons we are all created. What is the benefit of the resources you are getting if it is not going to put smiles on the faces of people; if it is not going to add great values to your country, to your neigbourhood? It is nonsense. But this is a principle that we may not all agree. But I think that is the whole essence of our creation, that is the whole essence of our blessing from God.

    How do you relax?

    I relax just like any other person.

    Do you go on holidays?

    When the opportunities arise, I like to shut down, relax and have private holidays. I do that regularly, but it may not be for a long time.

    Where is your favourite destination for holiday?

    Which part of Africa?

    That is a tough one. There are many destinations but I think first of all, Nigeria. Many people would not agree with me. If you go to my village in Ikogosi, you would be amazed by what God has done. If you go to Obudu, you would be happy to be in that place. There are other places, Senegal, Egypt, I love Africa.

  • Oil prices rebound on signs of output cuts

    THE price of oil rallied on Monday as investors speculated that the falling cost of crude may have ended.

    Brent crude was up 1.3per cent at $53.65 a barrel, having reached $55, while US oil rose 1.7per cent to $48.52.

    It followed the release of data showing that US demand for leasing oil rigs was slowing, suggesting that producers might be preparing to cut output.

    Meanwhile, US giant ExxonMobil reported a 21per cent fall in quarterly earnings on lower oil and gas production.

    Last week, data showed that more than 90 US oil rigs were idled, the largest number to be wound down in a single day since the mid-1980s.

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    “There were a lot of people on the sidelines waiting for an opportunity to buy,” said Bjarne Schieldrop, chief commodity analyst at SEB.

    Monday’s price rise extended the gains made last week, and boosted oil and gas share prices. Tullow Oil rose almost seven per cent, while BG Group climbed five per cent.

    Since last summer, the prices of Brent and UK West Texas Intermediate Crude have fallen from above $100 a barrel.

    “Most market observers have been surprised by the scale of the decrease, and expectations of US oil output this year will no doubt be lowered accordingly,” analysts at Commerzbank said in a research note.

    “The foundation for a steady price recovery in the second half of the year has thus been laid.”

    Meanwhile, Exxon, the world’s largest publicly traded oil company, saw profit in the fourth quarter fall to $6.57billion (£4.37billion), from $8.35billion for the same three months the year before.

    Oil and natural gas production fell 3.8per cent, Exxon said.