The Nation Newspaper

Tag: Oil

  • War against oil theft excites generals’ wives

    Their husbands are in the war front battling either the vicious Boko Haram insurgents in the north or the greedy oil thieves and pirates in the creeks of the Niger Delta region. Members of the Nigerian Army Officers’ Wives Association (NAOWA) are on the move to compliment the efforts of their husbands.

    Mrs. Felly Minimah, their National President and wife of the Chief of Army Staff who recently described himself as a war-time general led the women out of their comfort zones. Their mission was to identify widows of fallen soldiers, commiserate with them and give them relief materials.

    Mrs Minimah and members of her group were in Bayelsa State. They were, however, excited by the successes recorded by the Joint Task Force (JTF), Operation Pulo Shield, in its war against oil thieves, pipeline vandals, illegal bunkerers  and pirates.

    They were received and treated to a grand reception by their host and Commander,JTF, Maj. Gen. Emmanuel Atewe. Their presence especially at the cocktail party organised at a grandiose hotel in Yenagoa attracted other service commanders including the state Commandant of the Nigeria Security and Civil Defence Corps (NSCDC), Mr. Desmond Agu.

    Beyond the party, the elegantly dressed women were also curious about the activities of the JTF especially its war against oil thieves. Therefore, the next day, they relocated to the headquarters of the security outfit at Opolo in Yenagoa. They were later briefed by Atewe.

    Maj-Gen. Atewe reeled out the figures and insisted that the JTF was gradually winning the war against oil theft. The evidence could be seen in the increase in oil production recorded by oil multinationals, he said.

    He maintained that oil multinationals operating in the region were recording significant increase in outputs because of JTF’s war against economic sabotage. He said the military outfit arrested 20 vessels for oil theft in the region within the first qarter of this year.

    He noted that the troops of JTF apprehended many hardened sea pirates, kidnappers and cultists, adding that some of the suspects died in gun battle with soldiers. Atewe told the women that the command raided and destroyed over 854 illegal refineries in many creeks in the region.

    But he had a big challenge. The commander paused, looked at his audience and told the generals’ wives that the major headache of the command was dearth of logistics. He begged the army headquarters to send more gunboats, operational vehicles and personnel to the command.

    Maj-Gen. Atewe also rued the proliferation of illegal refineries in the region. He, however, voiced out his suggestion. He called on the Federal Government to consider the building of modular refineries across the region to discourage the establishment of illegal refineries.

    “On my arrival as a commander of JTF, l declared zero tolerance for all kinds of illegal operations in the region in line with the mandate of the JTF”, he said.

    He observed that oil thieves remained resilient in their misplaced efforts to milk the country dry. But the commander warned them and reinstated the resolve of JTF to smoke them out and hand them over to prosecuting agencies.

    He lamented that the activities of oil thieves were affecting the nation’s economy and posing serious threats to the health and livelihood of the people. He said the thieves had devised a means of offering huge bribes to personnel of JTF to enable them have unhindered access to the country’s oil resources.

    Maj-Gen. Atewe, however, praised his men for turning down mount-watering financial inducements offered them by suspected oil thieves. He specifically cited a case where an officer was offered N25million by a group of oil thieves as a bribe. But he said the officer did not only turned down the offer but also arrested the suspect and members of his group.

    He thanked members of NAOWA for their visit describing it morale boosting. In her response, Mrs Minimah commended JTF for its efforts in tackling  the activities of oil thieves in the region. She said members of NAOWA were satisfied at the dogged manner JTF prosecuted the war against theft of the commonwealth.

    She said NAOWA was on a familiarisation tour and visit of military formations and units across the country. She lamented the increasing number of military widows in many barracks across the country.

    But she noted that the association was formed to assist the poor and the less-privileged especially widows of deceased soldiers. She added that the number of widows was increasing on daily basis because of the security situation in the country.

  • Angola seeks to rival Nigerian oil output

    Angola seeks to rival Nigerian oil output

    ENI SpA (ENI) crews in Angola, Africa’s second-largest crude oil producer, upgraded a production vessel for new pumping this year as the southwest African country targets output rivaling its bigger competitor, Nigeria.

    Eni plans to start production within five months as operator of Block 15-06’s West Hub fields, estimated to hold reserves of 200 million barrels, and boost flows to 80,000 barrels a day, documents on the Rome-based company’s website show. The block’s East Hub development is due to pump about 49,000 barrels a day after starting in 2016, the documents say.

    The block, 350 kilometres (217 miles) northwest of Luanda, the capital, is one of eight offshore projects Petroleum Minister Jose Maria Botelho de Vasconcelos is counting on to help raise production to two million barrels a day by next year from 1.66 million last month. That compares with Nigeria’s 2.15 million barrels daily.

    One of the largest developments, Total SA (FP)’s Clov in Block 17, started last month and targets output of 160,000 barrels a day. Analysts such as Wood Mackenzie Ltd. said the projects will be too late to boost declining flows by 2015.

    “We should think about the need to shorten the time between declaration of oil discoveries and the beginning of production,” Vasconcelos said at the inauguration of the N’Goma, a floating production, storage and offloading vessel for Eni’s West Hub project, the state-run Jornal de Angola stated.

  • ‘Merger of Ondo oil communities justifiable’

    Controversies over a suspected planned merger of communities in the oil producing Ilaje local government area of Ondo state have continued to linger on.

    The youths of the area have consequently charged the state government and security agencies to guard against breakdown of law and order in the communities.

    Apart from this, the people have also urged the state government not to succumb to the alleged threats and blackmail of some people in the area over the merger processes, saying the move should be pursued to a logical conclusion.

    The Chairman,Mahin-Aheri-Etikan (Ilaje) Youth Congress,Nelson Ololajulo and the Secretary, Babalola Solomon, condemned the recent protest embarked upon by some section of Ugbo Youths.

    According to them, the protests and the comments by some Ugbo youths over the merger plan was regrettable and uncalled for as what Chevron Nigeria Limited had demanded for was for administrative convenience of the area.

    The Ilaje youths however noted that the sponsors of the protests were people that had fraudulently benefited from exploration activities in the area to the detriment of the larger society.

    The group argued that those behind the protest were a local cabal that wanted to prevent accountability for the funds that had been remitted by the oil company for the development of the oil producing areas of the state.

    They said, “Conscious of our place and position as a people accounting for the larger population and territory of Ilaje without whose territory there is no access to Ugbo land and whose land is used for reclamation and sand filing for the infrastructural development of the whole of Ugbo kingdom.

    “We shall in the interest of Ilaje common kindred spirit, treat the empty sound and fury of threats as the usual tale. In the interest of security and peaceful co-existence of all our people and smooth business operations in Ilaje land, we only wish to enjoin all our leaders across Ilaje land,

    the Ondo state government, security agencies to warn those behind these

    careless utterances and behaviours to desist.”

    The group said as oil producing people, they are keenly watching Chevron, the Ondo State Government and its agencies in their treatment of all parties and strongly advised them against succumbing to the empty threats and blackmail by any group of Ilaje, adding that they should be fair to all.

    In specific terms, the youths insisted that all payments due to Ilaje from the offshore operations be paid into an escrow account, while all forms of empowerment benefits and contracts be evenly distributed across the entire coastline of Ilaje adding that the merger process be concluded without further delay.

  • ‘Call for merger of Ondo oil communities selfish’

    ‘Call for merger of Ondo oil communities selfish’

    The desperation of some politicians to either become chairman of Ondo State Oil Producing Area Development Commission (OSOPADEC) or Commissioner representing the State on the board of Niger Delta Development Commission (NDDC) has been identified as the driving force behind the recent agitation by Mahin, Aheri and Etikan Communities to be merged with Ugbo land.

    According to Ugbo communities through the Chairman, Ilaje Ugbo Think Tank Group, Mr Henry Agbude, it was the act that established the OSOPADEC and NDDC that gave the people of Ugbo Kingdom the preference above other kingdoms in Ilaje Local Government to occupy the positions being the only oil producing kingdom in the state as at now.

    He said it was this law that has over the time stirred up envy among desperate politicians from Mahin, Aheri and Etikan axis who have been eyeing the plumb positions for many years.

    According to him, the same agitation came up during the tenures of late Chief Adebayo Adefarati and Dr. Olusegun Agagu as Governors of Ondo State but collapsed because it was laced with self interest, greed and inordinate ambition.

    He noted that Governor Olusegun Mimiko has also seen the truth that non oil producing communities cannot be merged with oil producing communities saying that is why the merger related crisis has been lingering for almost two years now.

    Agbube said it was Ilaje Ugbo Communities that signed the General Memorandum of Understanding (GMOU) with the Chevron Nigeria (CNL), advising that the people of Mahin, Etikan and  Aheri should enter into their own discussion with the company first before knowing the next step to take.

    According to him “the Communities in Mahin, Aheri and Etikan axis have no GMOU with CNL.

    What Ugbo People are saying is that Mahin, Aheri and Etikan should first enter into GMOU with CNL in order to confirm their oil producing status”,

    The group also urged the merger agitators to approach relevant government agencies that give recognition to communities as oil producing ones and prove their eligibility for recognition.

    It said the idea of gaining recognition from the back door through merger of the communities would not work.

    “If Mahin, Aheri and Etikan should hinge the basis of their offshore recognition on the fact that they share the same coastline with Ugbo Kingdom,  they should be informed as well that the same coastline extend to Ogun and Lagos states, therefore the reason for the agitation is not

    enough” The statement stressed..

    The chairman accused some government functionaries of being the brain behind the merger agitation.

    He therefore called on CNL to continue its relationship with Ilaje Ugbo Coastal Communities Development (IUCCDC). The chairman also called on the Ondo State Government of Ondo State to also see the insistence of Mahin  Aheri, and Etikan’s call for Pan merger as an action that is capable of causing crisis.

  • War against oil thieves begins in Nembe

    War against oil thieves begins in Nembe

    It is oil and gas everywhere. In fact, the ancient kingdom of Nembe is the home of the black gold. Almost every community in Nembe, one of the eight local government areas, in Bayelsa State, produces the mainstay of the country’s economy.

    Nembe is the host to two major oil multinationals – Shell Producing Development Company (SPDC) and the Nigerian Agip Oil Company (NAOC). The rich oil block famously known as Oil Mining Licence (OML) 29 operated by Shell is domiciled in Nembe.

    OML 29 is believed to be the most lucrative asset. Its output is said to have increased to 62,000 bpd of oil and 40 million standard cubic feet of gas per day (mmscf/d). It also holds reserves of 2.2 billion barrels of oil equivalent (boe). Shell’s Santa Barbara Flow Station, Tora Manifold and Odema Flow Station are located within the council. Agip also boasts other oil producing platforms in the council.

    Indeed, Nembe is said to have the largest oil field in Africa. But, the Ijaw-speaking Nembe, just like Ogoni in Rivers State, appears to have the largest share of oil curse. Its development belies its wealth and its environment is ravaged and devastated by oil exploration and exploitation. Gas is still flared almost everywhere in the ancient city.

    Apart from anti-environmental activities of oil companies, Nembe is suffering the diabolic and criminal menaces of pipeline vandals, oil thieves and illegal bunkerers. Niger Delta Report learnt that many communities have taken to the illegal business of setting up illicit refineries and breaking pipelines as their major sources of livelihood.

    In a decisive move, however, the new administration of the council led by Mr. Eminah Bioghoemi, has declared war on economic sabotage prevalent in the council. Bioghoemi in a rare display of courage and patriotism has evolved strategies to combat the menace.

    Niger Delta Report found that the council chairman has already established a task force consisting of notorious oil theft converts and opened discussion with the the Nigerian Security and Civil Defence Corps (NSCDC) for partnership.

    It was learnt that the chairman held discussions with the state Commandant of the NSCDC, Mr. Desmond Agu, to fine-tune the tactics and logistics required to flush economic saboteurs out of the council. He believes that if each council should deal with the problem, oil theft would soon be history in the state.

    Bioghoemi said his council decided to partner with NSCDC in recognition of the corps’ mandate as provided by the Act of 2007. He said: “We have already set up the task force and what we are looking at is for the operational arm of the civil defence to also come and back up the task force.

    “Facing criminals in the creeks will not be mere surveillance affair. We need to confront people who are seriously in that bunkering activity. You can’t fight drug without arming yourselves the way it happened in Colombia.

    “That is why we are partnering with the civil defence. We are happy that the state commandant and the whole of the service in Bayelsa State have promised to give us the needed support by following us to the creeks.”

    He confirmed that former oil thieves and operators of illegal refineries gave up their criminal ways to help the task force realise it’s mandate. He said the former vandals repented because of government interests.

    “They have listened to the government and have also agreed to work with civil defence to ensure that this menace is arrested,” he said.

    To begin the operation, he said the council has acquired two boats of 250 horse power each, gunboats against light ammunition and other facilities. He is optimistic that the arrangement will end  the problems of oil thieves.

    “We held a meeting with the civil defence and we were impressed with what we heard from them. With the cooperation of most of these men who have declined to be involved in that business and volunteered to come back and support the government, we are going to get results”, he insisted.

    Apart from the warfare, the task force will engage in widespread sensitisation of communities on the negative effects of oil theft. The chairmen of community development committees, youth leaders and community leaders will be persuaded to support the war against illegal bunkering.

    The chairman said: “Youth leaders, the CDC chairmen and the community heads will be engaged. The arrangement is for them to concede to government and see reasons why this notorious activities must stop”.

    He added: “These things are not done in the moon, they are done in communities. We are aware before now that these criminals were even paying community leaders pretending to love them while they come to sabotage their economy.

    “We want to take the message to the communities that if anything like that happen in your area, the first clamping will be on you the community leaders for abetting the criminality. It is conspiracy in crime. We want them to see reasons why security must start from them.

    “They need to give us vital and security information to enable the government act. The task force will also go from community to community for an awareness campaign. Youths are mainly involved in this criminality. They will engage them and tell them the reason why vandals will not be allowed to operate in the local government area.”

    Confirming the partnership, Agu said the chairman was motivated by a similar intervention in the Southern Ijaw Local Government Area. Agu disclosed that the task force in Southern Ijaw lead by civil defence operatives has so far destroyed 225 illegal refineries operated in 17 communities, discovered and clamped 70 spill points.

    Describing the exercise as successful, he said persons arrested had been arraigned by the corps. “Having studied the ongoing successful operation at Southern Ijaw, the Chairman of Nembe became interested and we have finalised to begin the operation.”

  • Forte Oil:Growing profit

    Forte Oil:Growing profit

    Forte Oil Plc continued in its strides in the first quarter with significant growths in sales and profitability. Key extracts of the unaudited report and accounts of Forte Oil for the three-month period ended March 31, 2014 made available by the Nigerian Stock Exchange (NSE) yesterday showed that turnover grew by 30.74 per cent while pre and post tax profits rose by 100.6 per cent and 107.8 per cent respectively. The report showed that turnover rose to N34.78 billion in the first quarter of 2014 as against N26.6 billion recorded in comparable period of 2013. Gross profit rose by 72.4 per cent from N2.68 billion to N4.63 billion. Profit before tax doubled from N633.07 million to N1.27 billion. After taxes, net profit stood at N1.10 billion by March 2014 as against N530.60 million recorded in corresponding period of 2013. Basic earnings per share rose from 49 kobo to 75 kobo.

    The first quarter report came on the heels of distribution of N4.32 billion as cash dividends to shareholders for the immediate past year ended December 31, 2013. Breakdown of the dividend indicated that shareholders received a dividend per share of N4. Forte Oil had consolidated its recovery in 2013 with impressive growth in turnover and profitability as the downstream oil-marketing company intensified its diversification into the allied power and energy sector.

    Audited report and accounts of Forte Oil for the year ended December 31, 2013 showed that turnover rose by about 41 per cent while pre and post tax profits jumped by 467 per cent and 396 per cent respectively. With 292 per cent increase in pre-tax profit margin and a double in return on total assets, the underlying improvement in profitability and return in 2013 was underpinned by the diversification of income stream and improvement in its core downstream business.

    Total balance sheet size doubled by 146 per cent while total equity funds leapt by about 459 per cent. Besides, the balance sheet structure became more supportive and stable in 2013. With significant reduction in financial leverage, increased equity funding, improved liquidity and positive working capital, the balance sheet structure was evidently in a better stead.

    As earnings per share rose from 93 kobo to N4.32, the company paid a dividend per share of N4 to shareholders, totaling N4.32 billion. Besides, net assets per share increased by 458 per cent from N7.03 to N39.25.

    However, the performance of the core downstream business was still tepid. With negative operating profit, the midline performance was buoyed largely by the impetus from the new power business and efficient financial management. This was evident in the decline in gross margin and the increase in cost of business relative to turnover.

     Financing structure

     The financing structure was generally positive. The proportion of equity funds to total assets increased from about 18 per cent in 2012 to about 41 per cent in 2013. The rooftop gearing ratio of 130 per cent in 2012 dropped to 12 per cent in 2013 as immediate bank loans halved from N9.9 billion to N4.9 billion. Current liabilities/total assets ratio improved from 77 per cent to 44.6 per cent while long-term liabilities/total assets ratio was relatively better at 15 per cent in 2013 as against 5.1 per cent in 2012.

    Forte Oil’s group paid up share capital remained unchanged at N539 million. Total equity funds meanwhile rose from N7.58 billion in 2012 to N42.35 billion. The improvement in equity funds was due to increase in primary equity funds attributable to shareholders of the company, which rose from N7.58 billion to N13.04 billion, and special equity funds of N29.31 billion. Total assets rose from N42.51 billion to N104.68 billion while total liabilities increased from N34.93 billion to N62.33 billion.

    Efficiency

    Average cost efficiency declined during the year underlining the low margin in the downstream business and notable increase in administrative expenses. Average cost of sale per unit of sale increased in 2013 and this was compounded by substantial increase in operating expenses. Total cost of business, excluding finance charges, inched up to 100.1 per cent in 2013 as against 97.5 per cent in 2012.

    Profitability

    Underlying indices showed improvements in profitability and returns. While gross profit margin decreased from 11.2 per cent in 2012 to 9.9 per cent, average pre-tax profit margin increased substantially from 1.3 per cent in 2012 to 5.1 per cent in 2013. Return on total assets doubled from 2.7 per cent to 6.2 per cent while dividend cover stood at 1.08 times. However, return on equity declined marginally from 13.3 per cent to 11.8 per cent.

    Group turnover rose from N90.98 billion in 2012 to N128.03 billion in 2013. Cost of sales however rose by 43 per cent to N115.4 billion as against N80.84 billion. Gross profit thus increased by 24.5 per cent from N10.15 billion to N12.63 billion. Total operating expenses stood at N12.77 billion in 2013, about 62 per cent above N7.89 billion in 2012. Administrative expenses had jumped from N5.01 billion to N9.81 billion while distribution expenses increased from N2.87 billion to N2.94 billion. Non-core business incomes-including finance incomes; however leapt by 1,055 per cent from N738 million to N8.52 billion. Finance expense was moderated at N1.88 billion in 2013 compared with N1.85 billion in 2012. These boosted the bottom-line with pre-tax profit rising from N1.15 billion to N6.53 billion. Profit after tax also quadrupled from N1.01 billion in 2012 to N5.0 billion in 2013. With these, basic earnings per share increased from 93 kobo to N4.32. The board of the company has recommended payment of nearly the entire net earnings to shareholders at a ratio of N4 per share.

    Liquidity

     The company’s liquidity position improved significantly during the period with positive working capital and increased financial agility. Current ratio, which measures the financial readiness of a company by relating current assets to relative liabilities, crossed the thresholds to 1.06 times in 2013 as against 0.75 times. Working capital/turnover ratio improved from -8.9 per cent in 2012 to positive 2.1 per cent in 2013. Debtors/creditors ratio closed 2013 at 87 per cent compared with 60.6 per cent in 2012.

    Governance and structures

     Forte Oil, formerly known as African Petroleum (AP), is a major downstream company quoted on the Nigerian Stock Exchange (NSE). Forte Oil has more than 500 retail outlets spread across the country, a fuel storage facility at Apapa and aviation joint users hydrant in Ikeja, Lagos. It also operates another large storage depot at Onne, Rivers State as well as joint aviation depots in Abuja, Port Harcourt and Kano. The Forte Oil Group includes a foreign subsidiary, AP Oil and Gas Ghana Limited (APOG), which operates some eight retail outlets in Ghana; an indigenous upstream services company, AP Oilfields Services Limited (APOS) and its new power plant subsidiary, which owns the 414-megawatts Geregu Power Plant.

    The board and management of the company remain stable. Mr Olufemi Otedola, the core investor in the company, chairs the group’s board of directors while Mr Akin Akinfemiwa leads the executive management team as group chief executive officer. On the basis of available information, the company has largely complied with extant codes of corporate governance and best practices.

     

    Analyst’s opinion

    The outlook for Forte Oil is reassuring. The performance over the 15-month period reinforces the continuing success of its business development programme, especially the landmark diversification into the electric power business. Two years into its three-year strategic business transformation initiative which started in 2012, immediate past year further evidenced the continuing solidification of the business. With the steady success of the immediate initiative, the company can transit into its medium-to-long term corporate plans, which entails expansion into the upstream oil and gas sectors.  Obviously, the new power business will continue to be a major driver for group performance in the years ahead.

    Forte Oil was recently added to the MSCI Frontier Market Index 100, a global index for the 100 of the largest and most liquid stocks in some 26 countries generally classified as frontier markets. The MSCI Frontier Markets 100 Index is designed as the representative and more easily replicable alternative to its broader parent index, the MSCI Frontier Markets Index. With the May 2014 semi-annual review, frontier markets countries now include Argentina, Bahrain, Bangladesh, Bulgaria, Croatia, Estonia, Jordan, Kenya, Kuwait, Lebanon, Lithuania, Kazakhstan, Mauritius, Morocco, Nigeria, Oman, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia, Ukraine, and Vietnam.

    The MSCI Frontier Markets 100 Index was launched on Apr 11, 2012 and placed strong emphasis on tradability through three main features of a minimum liquidity level and proportion of shares still available to foreign investors relative to maximum allowed. The 100 largest securities are selected from the eligible universe and ranked by float adjusted market capitalization.

    Notwithstanding, Forte Oil needs to strengthen its capital base to support its business expansion. It also needs to strengthen its downstream marketing business to increase its complement to the group performance.

  • FG loses N376.6b to vandalism in 6 years

    The Federal Government said it lost over N376.6 billion in six years (2008 – 2013) to vandalism of oil and gas pipelines by crude and products thieves.
    The Managing Director, Products and Pipeline Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), Prince Haruna Momoh disclosed this during a capacity building workshop for media practitioners in Uyo, Akwa Ibom State.
    Momoh who was represented by the company’s Executive Director, Commercial, Mr. Frank Amego, said that incidents on the company’s pipelines caused by vandals, rose from over 400 in 1999 to 3571 by end of 2013 adding that activities of vandals seem more difficult to stem.
    In his analysis of the implication of the revenue losses, the Group Coordinator, Corporate Planning and Strategy, NNPC, Dr. Timothy Okon, described the act as economic sabotage adding that the amount would have been enough for annual budget allocations for Akwa Ibom and Borno States.
    “it is equivalent to a year’s allocation for Akwa Ibom and Borno State,” he said.
    The cost of securing and maintaining the pipelines, he noted, has no budgetary allocation but unknown to so many Nigerians, NNPC incurs the expenses. “We are required to provide services but there are no provisions or mechanism for the cost we incur to be addressed,” he said.
    He urged the saboteurs do desist from their act because it affects the citizenry adding that it is politically time for Nigerians to resolve that such theft and losses are not conducive for a nation that aspires to be among the 20 largest economies of the world by 2020.
    He said: “If you vandalise gas pipeline, it is not as if you can just put a jerry can and take it, so vandalisation of gas pipeline, is pure sabotage.”
    The Group Executive Director, Gas and Power, NNPC, Dr David Ige who was represented by the Manager, Trans Nigeria Gas Pipeline, Engr. Alfred Amadi, in his presentation, disagreed with the claim of the Minister of Power, Prof. Chinedu Nebo that low price is responsible for the shortage of gas to power.

  • Oil firm to partner host communities

    Despite many firms poor showing in image branding, Seplat Petroleum Development Company achieved results in the first phase of its brand placement and capacity developement.

    Following its listing on the London and Lagos stock exchanges, the company has said it is ready to project its brand and establish itself as a global player through corporate social investments in its host communities.

    Its Chairman, Ambrosie Orjiako, at a briefing, said: “Seplat is a Nigerian brand and we are proud of our Nigerian heritage. We are a global brand and we are listed on the London stock Exchange. In terms of branding, we have distinguished ourself from others in terms of corporate governance, constitution of our board; we have best management team you can ever have in the world; it’s a world-class team which gave us an edge against competition.”

    On the challenges facing the sector in image branding, Orjiako said the company is engaging its communities to enhance success as a socially responsible oil firm.

    He said: “The oil sector has never had it good when it comes to image branding. As a result, the way we engage our community is very strong. Our host community engagement has been at the foundation of our success from inception. We remain committed to full implementation of our ‘SEPLAT model’ of proactive community engagement in the Niger Delta and wherever we operate. An example of this is our Global Memorandum of Understanding with the host communities. We have created the platform for economic prosperity in the communities, a ‘win-win’ strategy. In addition, we are driving various other CSR programmes in our areas of operation to encourage capacity building and economic empowerment, especially among women and the youth.

    “To help empower and build strong relationships with the local communities, we have also employed various community contractors to provide oil and gas services. In all, we have strived to create a platform for economic prosperity in the communities.”

    Recently, the World Economic Forum named Seplat, a Global Growth Company. With this recognition, the firm joins a vibrant community of the world’s most dynamic, influential and high-growth companies.

    Companies are judged on their compliance with set criteria: growth, global corporate citizenship, executive leadership and impact on the competitive landscape of their region or industry.

    However, Orjiako declared Seplat will strive to maintain its leadership position in the market and remain focus in the face of competition.

    “The future of our company is very bright. We shall strive to maintain our leadership position in the indigenous E & P industry in Nigeria and our focus in following our growth strategy to seek to ensure delivery of our commitment not only to capital growth but also to remain profitable and dividend paying. We shall seek to deliver tangible rewards to all stakeholders,” he noted.

    The company has already paid a dividend of N16.50 per share for the 2013 financial year.

  • ‘US, biggest oil producer  after overtaking Saudi’

    The US has  overtaken Saudi Arabia and Russia to become the world’s biggest producer of oil as extraction of energy from shale rock strengthens the nation’s economy,according to  Bank of America Corporation.

    U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report  yesterday.

    It  became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.

    “America is now the world’s leading producer of oil and gas,” Francisco Blanch, the bank’s head of commodities research in New York, said in the report. “The American shale revolution has had a transformational effect on the U.S. and global economies in recent years. Low energy prices are a key edge of the U.S. economy.”

    Oil extraction is soaring at shale formations in Texas and North Dakota as companies split apart rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking. The surge in supply combined with restrictions on exporting crude is curbing the price of West Texas Intermediate, America’s oil benchmark. The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm.

    U.S. oil output will surge to 13.1 million barrels a day in 2019 and plateau thereafter, according to the IEA, a Paris-based adviser to 29 energy-consuming nations. The nation will lose its top-producer ranking at the start of the 2030s, the agency said in its World Energy Outlook in November.

    Production growth outside the U.S. has been lower than the bank anticipated, keeping global oil prices high, Blanch said. Partly as a result of the output boom, WTI futures on the New York Mercantile Exchange remain at a discount of about $7 a barrel to their European counterpart, the Brent contract on ICE Futures Europe’s London-based exchange.

    Rising U.S. oil supplies come as an Islamist insurgency threatens output in Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia. Territorial gains in northern Iraq by a group calling itself the Islamic State has spurred concerns that oil flows from the south could be disrupted. Exports from Libya have been disrupted by protests, while Nigeria’s production is crimped by oil theft and sabotage.

  • Oil slips as Iraq worries fade, supply grows

    Oil futures lost a little ground as worries over Iraq and other geopolitical hot spots eased and traders focused on growing crude supplies.

    On the New York Mercantile Exchange, WTI crude oil for August delivery /quotes/zigman/2196851/delayed CLQ4 +0.16 per cent fell 38 cents, or 0.4 per cent, to $104.96 a barrel. On the ICE, August Brent futures /quotes/zigman/2648929/delayed UK:LCOQ4 -0.20 per cent fell 55 cents, or 0.5 per cent, to $111.74 a barrel.

    “In Iraq, most of the bad news has already been priced in, so it may take a significant escalation of the conflict there for oil prices to find renewed strength on just this one factor. What’s more, investors are making a more sober assessment of the conflict there, realising that most of Iraq’s oil is exported from refineries in the south of the country, where the situation is normal,” said Fawad Razaqzada, analyst at Forex.com, in a note.

    Enlarge Image Meanwhile, investors have shrugged off the end of a ceasefire in Ukraine, while rebels in eastern Libya have reportedly reopened two oil ports, he said.

    The Iraq conflict in June drove both WTI and Brent crude futures to nine-month highs.

    On the supply front, traders are awaiting the Energy Information Administration’s weekly crude inventories report.

    The American Petroleum Institute late Tuesday said crude supplies fell 875,000 barrels in the week ended June 27.