The Nation Newspaper

Tag: Organization of Petroleum Exporting Countries (OPEC)

  • OPEC unites on oil market stability

    …as Saudi minister meets Kachikwu

     

    Ahead of the December 7 meeting of the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna Austria, the members were united on bringing back stability to the oil marktet, said the Minister of Petroleum, Industry and Minerals Resources, Kingdom of Saudi Arabia, Engr. Khalid Al-Falih on Wednesday.

    Speaking in a meeting with his Nigerian counterpart, the Minister of State for Petroleum Resources, Dr. Emmmanuel Ibe Kachiwkwu in Abuja, the visiting minister said that he was in Iraq, Avogabe, Libya and also discussed with some other ministers, who were all longing to return stability to the oil market.

    He however noted that the way and manner of realizing the much needed stability was what they were yet to discuss, stressing that the December 7 meeting would determine that.

    His words: “I have been to Avogabe, I have been to Iraq,  have been in Nigeria today. I have also met with the Libyan National oil company head to have a delegation. I have received calls from a number of ministers. And everybody is longing for everything that brings stability back . What that decision will be I cannot say. But the decision is going to be made on December 7.”

    He added that it would be premature what the decision would be since taken at the meeting as there was yet no clarity and the barrel to market was not helpful in the last three weeks.

    He was confident that the 25 countries would want to agree and the technical committee would meet to receive the analysis from the organization’s technical advisers.

    Read Also: ‘OPEC’s output highest since 2016’

    Collaborating his position, Kachiwkwu said that OPEC members were already speaking with one voice in order to bring back oil stability. According to him, the organization accounts for not more than 35% of global oil output, although the world looks up to OPEC whenever there is volatility.

    He said ultimately every oil producer would like to have an interest in contributing to the stabilization of the oil market.

    Kachikwu noted that his colleague from Saudi Arabia had driven the confidence that all oil producers needed to work together. He added that on his own, he had brought the African producers to support whatever direction OPEC would take.

    He said that “ultimately, the work we are doing in OPEC bloc is that we are bringing countries other than OPEC to see how their contributions can be helpful in the control and stabilization of the market that we will continue to be relevant.”

    He explained that the visit of the Saudi Arabian’s minister was not focused on refining of petroleum, adding that refining was only a side conversation that they had.

    Kachikwu revealed that the meeting was simply on what they would do at the upcoming OPEC meeting.

    The minister however noted that the two countries shared their refining experiences in order to appreciate how his guest’s country accomplished its present feat in refinery.

    He submitted that “no formal thing has been agreed yet but willingness to cooperate with one another. These are usually very strong business decisions. And at the appropriate time we will nose dive into the details of that.”

    Engr. Khalid Al-Falih, said “I have invited his excellency to kindly come and see first-hand the manufacturing complexes and at the same time see our team, and how the investment opportunity can be brought to bear in Nigeria.”

    According to him, the country’s company is the largest as the upstream company and has seen Africa as a very vital market to invest in, and “there is no better place to start than Nigeria.”

    He said that the country was looking forward to investing in gas to power , especially in Africa.

    The Saudi Arabian minister said that “in terms of bilateral energy relationship, I will say that there are too many areas in which Saudi Arabia has become successful to a large degree, attaining a deficit in a few projects by becoming a major export by building a number of large refineries, world scale refineries through a joint venture investments and funding and skills from foreign direct investments. There is technical success. There is finances success for Saudi Arabia becoming a major exporter of a value added crude products and petrol chemicals.”

    He noted that during his next visit to Nigeria, he would explore the opportunities in refining, petrochemicals and gas to power to bring development and opportunities to Nigeria and Africa.

    Kachikwu said that from Europe to Latin America everyone investing in Africa promised funding or technology, challenging the Saudi Arabia totals a cue from China that was already making wave around the world.

    He however explained that the investment that Saudi Arabia was promising to explore in Nigeria was not a gift.

     

  • OPEC to unveil 2018 annual statistical bulletin

    The Organization of Petroleum Exporting Countries (OPEC) Secretariat will Friday launch the 53rd edition of the Annual Statistical Bulletin (ASB).

    This year’s edition provides updated statistical data on the oil and natural gas activities of each of OPEC’s 14 Member Countries.

    It also contains valuable industry data for various countries around the world and for the world’s major economic areas.

    Read Also:OPEC deal: Members, non-members achieve 149% conformity level

    OPEC made this known in the press statement it issued from its headquarters in Vienna, Austria Thursday.

    The statement noted that the “ASB provides a wide range of data on the oil and gas industry worldwide, and provides comprehensive time-series data on many different aspects of the global petroleum industry. Highlights of this year’s edition, which includes statistical data for 2017, include world crude oil production showing a decline; world oil demand rising; total exports of crude oil from OPEC Member Countries falling; and total world proven crude oil reserves decreasing slightly.”

  • I’m ashamed Nigeria has no data on oil – Yemi-Esan

    I’m ashamed Nigeria has no data on oil – Yemi-Esan

    The Permanent Secretary, Ministry of Petroleum Resources, Dr. Folasade Yemi-Esan, yesterday expressed concern over the non-availability of data on Nigeria oil sector in the country.

    According to her, Nigerians have to go to the secretariat of the Organization of Petroleum Exporting Countries ( OPEC ) before getting data on Nigerian oil.

    She said: “immediately after the minister’s speech last week, somebody stood up and said we didn’t have data source on Nigeria. And I was actually ashamed of myself and I think as we provide data for OPEC, we should address the question of churning credible data to be consumed in-country. It is a pity when students are looking for data we have to go to OPEC to get data about Nigeria.”

    She spoke while declaring the OPEC data management training workshop open at the Petroleum Technology Development Fund ( PTDF ) in Abuja.

    Yemi-Esan tasked the stakeholders in the workshop to work with the ministry to ensure that there is a generation and provision credible data that could help in planning and research purposes in the country. 

    She noted that the ministry works with the Nigerian Liquified Natural Gas, the Central Bank of Nigeria, Debt Management Office, National Population Commission, Energy Commission of Nigeria, Nigerian Electricity Regulatory Commission and Indorama Nig Ltd in order to generate its data.

    The Perm Sec, who noted that OPEC had commended the ministry on the last questionnaire it filled on data generation, stressed that “the format has changed slightly and we want to be sure that we are actually doing better. That is why we have this training.”

    According to her, the ministry was expecting participants from Equatorial Guinea, and Gabon but they cancelled their trip at the last minute. 

    Meanwhile, the Executive Secretary of the PTDF which hosted the event, Dr. Aliyu Gusau, noted that presently the organization relies heavily on member countries for accurate and timely data to effectively carry out its mandate.

    He added that for the Fund, “this workshop offers an opportunity for the expression of our strategic objectives to engage more effectively key players of the oil and gas industry by making valuable contributions that will further enhance capacity building of personnel and operators in the industry.” 

    Speaking, the Head, OPEC Data Management, Dr. Adedapo Odulaja all the activities of the organization is based on the data from member countries. 

    He stressed that without data transparency the oil industry cannot thrive. He noted that there are legal and technical aspects of the data, and without capacity building on them there will be no achievements in the industry. 

    He pointed out that the essence of the workshop was as a result of the need to make other agencies in the world compatible with the change in the questionnaire that was used for 20 years. 

    He submitted  that “we will have to understand the connection between the old and the new one and that is why we are here today.”

  • Falling crude price: FG may discontinue oil projects

    Falling crude price: FG may discontinue oil projects

    The Minister of State of Petroleum for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu Thursday dropped the hint that the Federal Government was having a rethink about the essence continuing existing oil projects owing to the falling crude oil prices.

    He however allayed fear over declining prices and productions, stressing that there was no cause to panic as no minister in the Organization of Petroleum Exporting Countries (OPEC) was looking forwarding to the prices exceed $70 per barrel.

    He pointed out that the low prices have their advantages, which are to compel review high cost of production, stressing that “even for the projects we are doing today, we are looking at it again to see if it makes sense; whether if the oil in the ground is not going to yield money to the Federal Government. We are doing a lot of work on the cost aspect.”

    The minister said that most oil producing countries were already working internally to ensure that they get the best margins from their businesses.

    He made this known in a world press conference at Abuja, where he announced that the Federal Government will be hosting the Nigerian Investment Petroleum Summit (NIPS) from 18-22 February, 2018. The conference, according g to him, will be the equivalent of the Offshore Technology Conference (OTC) that holds annually in Houston.

    Kachikwu said that in order to save the nation from the embarrassment of fuel queues in the Federal Capital Territory; he will direct the Nigerian National Petroleum Corporation to do everything in its capacity to remove petrol queues from Abuja.

    His words: “I will be instructing NNPC to do whatever it takes it ensures that I do not bring visitors here next week and experience fuel queues. They (NNPC) have to do whatever it takes to get this out of Abuja.”

    He said that “Lagos is largely more fuel queues free while Abuja is still struggling because of some of the logistics issues, although there is now a huge amount of improvement.”

    Kachikwu, who foreclosed the possibility of price hike, recalled that the government increased fuel price two years ago and has no intention of doing that again.

    According to him, the fuel queue issue is both a policy and logistic issue, and the government needs to address the fundamental policy issue, especially in the area of pricing differentials to enable a uniform prices of N145/liter.

    Kachikwu said that plans are in place to attain the target of 2.3million barrel per day (mbd) in 2019 and 2.5mpd in 2020.

    Allaying fears, he said that concerning prices, “I do not think we need to be panicky about it. We hit an all-time $70 in December, which surprised a lot of us. And that was because of the huge amount of work done in OPEC. We are not ruffled by it. I know it is coming down to the higher $60s now”

    The minister said that “Shale is going to be active. We know that whenever we are in excess of $65, shale gets very active because the fundamentals become much more supportive to more investments and more production lines.

    “I have always said that two things need to happen. OPEC needs to just focus on itself and on what it needs to do and forget about what is happening in shale. Two is that every OPEC producer must work hard to become a least-cost-producer.

    “The truth is that if shale can produce at $65, there is no absolutely no reason why we should be struggling. The fundamentals of our earnings, how efficient we are, our cost of production is work that we need to do internally.

    “That does not depend on OPEC. If you look at what is happening at Saudi Arabia and UAE, there is a fundamental rejigging of their production models to ensure that they are getting the very best in terms of their prices and their cost is going down. One nice thing about low prices is that it forces everybody to abandon high cost production.

    “Even for the projects we are doing today, we are looking at it again to see if it makes sense; whether if the oil in the ground is not going to yield money to the Federal Government. We are doing a lot of work on the cost aspect.

    “However, we have obviously oscillated between $60 and $70. $70 was a sharp move and we were obviously thankfully receptive of it, but I am not sure that there is a lot of minister in OPEC who would say they were looking forward to a $70 per barrel oil largely because of the effect it has on shale and the effect it also has on laziness in terms of cost management.

     

  • FG to spend N3.4tr on petroleum products in 2017

    FG to spend N3.4tr on petroleum products in 2017

    …requires $1.1b, $1.2b for repairing refineries
    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, on Thursday revealed that the Federal Government would in this year spend N3.4trillion on the importation of petroleum products.
    Addressing newsmen in Abuja, he refuted reports that quoted him to have said that government was concessioning its refineries.
    He said that government has no plans to concession the refineries but it is only making arrangements for private financing of their repair. The minister denied the claims that Oando has won the contract for financing the repair of the refineries.
    According to him, Nigeria that consumes 35million daily presently has domestic refining capacity of six million liters, which is about 25% of the demand.
    “The importation of products even between January and December of this year, amounts to 20million metric tonnes and a total amounting of N3.4 trillion. The logistic cost of that importation shipping clearing and all that is about N1.34trillion since the same one year period,” the minister said.
    Owing to this domestic and demand situation, the government had to plan for the improvement of its domestic refining capacity.
    Kachikwu noted that government raised a technical and steering committees on the financing of the refineries that its report will be presented to the National Assembly and Federal Executive Council upon conclusion.
    He however noted that what has been so far established is the magnitude of work that is required in the entities.
    The minister said that apart from piping, about $1.1billion, $1.2billion (depending of the category), will be required to fix the refineries.
    His words: “Internally, we have been able to determine the amount we want to do this work in terms of what work is required to be done. And the total cumulative amount if I am not mistaking is the $1.1, $1.2b type category depend on the refineries with specific breakdown. That of course does not include the cost of piping.”
    Explaining why government has decided to deal with the Chioda, Sapiem and GGC, he said that Chioda built Kaduna refinery, Sapiem built Warri refineries while CGC built the PortHacourt refineries.
    These companies, according to him, have the designs, engineering outlay and upgrade capability for the refineries.
    Today, the reality is still that the reality for downstream product surges that very few people will undertake the financing.
    “So that is why we have created a business model that tie them to the Direct Sale Direct Purchase (DSDP) Programme and that is still working and that is still work in progress.
    “When they finish this and are done with the analysis, I will expect that they will then invite everybody who is interested to the commercial terms set out formally…before we get to FEC, National Assembly and Mr. President. We haven’t reached there and so nobody can say contracts have been given.”
    Kachikwu advised the International Oil Companies to invest in building refineries in Nigeria in order to avoid the negative effects of dip in oil prices.
    He said more importantly, we need to address IOCs in terms of what they need to do to help local refining because if you encourage all these refining capabilities whenever they run out of crude availability we need to look at them why are you taking out crude when you can get the same pricing equivalent in local refining.”
    In terms of the incentives or guarantee for the corporations that would finance the repair of the refineries, he said that there will incremental volumes, access to sales to cushion the challenge in the markets in terms of pricing.
    He revealed that the Organization of Petroleum Exporting Countries (OPEC) is reaching out to its non-members including the US on measures to control the glut in the market.
  • FG to spend N3.4tr on petroleum products this year

    FG to spend N3.4tr on petroleum products this year

    …Requires $1.1b, $1.2b for repairing refineries

    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, Thursday revealed that the Federal Government would in this year spend N3.4trillion on the importation of petroleum products.

    Addressing newsmen in Abuja, he refuted reports that quoted him to have said that government was concessioning its refineries.

    He said that government has no plans to concession the refineries but it is only making arrangements for private financing of their repair. The minister denied that the claims that Oando has won the contract for financing the repair of the refineries.

    According to him, Nigeria that consumes 35million daily presently has domestic refining capacity of six million liters, which is about 25% of the demand.

    The minister said “the importation of products even between January and December of this year, amounts to 20million metric tonnes and a total amounting of N3.4 trillion. The logistic cost of that importation shipping clearing and all that is about N1.34trillion since the same one year period.”

    Owing to this domestic and demand situation, the government had to plan for the improvement of its domestic refining capacity.

    Kachikwu noted that government raised a technical and steering committees on the financing of the refineries that its report will be presented to the National Assembly and Federal Executive Council upon conclusion.

    He however noted that what has been so far established is the magnitude of work that is required in the entities.

    The minister said that apart from piping, about $1.1billion, $1.2billion (depending of the category), will be required to fix the refineries.

    His words: “Internally, we have been able to determine the amount we want to do this work in terms of what work is required to be done. And the total cumulative amount if I am not mistaking is the $1.1, $1.2b type category depend on the refineries with specific breakdown. That of course does not include the cost of piping.”
    Explaining why government has decided to deal with the Chioda, Sapiem and GGC, he said that Chioda built Kaduna refinery, Sapiem built Warri refineries while CGC built the PortHacourt refineries.

    These companies, according to him, have the designs, engineering outlay and upgrade capability for the refineries.

    Today, the reality is still that the reality for downstream product surges that very few people will undertake the financing.  So that is why we have created a business model that tie them to the Direct Sale Direct Purchase (DSDP) Programme and that is still working and that is still work in progress.

    “When they finish this and are done with the analysis, I will expect that they will then invite everybody who is interested to the commercial terms set out formally…before we get to FEC, National Assembly and Mr. President. We haven’t reached there and so nobody can say contracts have been given.”

    Kachikwu advised the International Oil Companies to invest in building refineries in Nigeria in order to avoid the negative effects of dip in oil prices.

    He said more importantly, we need to address IOCs in terms of what they need to do to help local refining because if you encourage all these refining capabilities whenever they run out of crude availability we need to look at them why are you taking out crude when you can get the same pricing equivalent in local refining.”

    In terms of the incentives or guarantee for the corporations that would finance the repair of the refineries, he said that there will incremental volumes, access to sales to cushion the challenge in the markets in terms of pricing.

    He revealed that the Organization of Petroleum Exporting Countries (OPEC) is reaching out to its non-members including the US on measures to control the glut in the market.

  • Oil price: Hopes for non- OPEC output cut

    Oil price: Hopes for non- OPEC output cut

    Oil prices extended gains on Friday on optimism that non-OPEC producers would agree to cut output following a cartel agreement to limit production.

    The Organization of Petroleum Exporting Countries (OPEC) will meet non-OPEC nations in Vienna on Saturday seeking their help in curbing a global supply glut.

    Azerbaijan has said it will come to the Austrian capital armed with proposals for its own reduction.

    Brent sweet crude for February delivery was up 17 cents at 54.06 dollars a barrel by 0 after settling up 1.7 per cent on Thursday.

    The contract hit its highest since July 2015 at 55.33 dollars on Monday.

    NYMEX crude for January delivery was up 33 cents at 51.17 dollars a barrel.

    Russia has said it would cut 300,000 barrels per day, meaning other non-OPEC producers combined would need to pledge the same amount to lower output by the 600,000 bpd.

  • OPEC members seal deal on oil production cut

    OPEC members seal deal on oil production cut

    …Kachikwu’s diplomacy yields dividends

    After about forty eight (48) hours of a grueling meeting of the Organization of Petroleum Exporting Countries (OPEC) held in Algiers, Algeria, the oil cartel on 28th September, 2016, agreed to a landmark deal that will effectively cut production to 32.5 million barrels per day from around 33.24 million, with levels of output for each member country to be determined in November 2016.

    The Director, Press, Ministry of Petroleum Resources, Idang Alibi said this will be the first time in eight years that OPEC would be reaching such an agreement. This could be loosely tied to the role that has been played by member countries, including Nigeria, in refocusing OPEC to work harmoniously in identifying needs and challenges that are peculiar to the body and surmounting them, a key challenge being the low price of oil in the international market which has affected the global economy with most OPEC member countries feeling the heat.

    OPEC member countries reached a consensus in the agreement where three countries are exempted from the production cuts and they include, Iran, which just had its economic sanctions lifted earlier in the year, Libya and Nigeria who have had some of their oil facilities damaged by terrorist attacks in recent months.

    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who led Nigeria’s delegation at the meeting argued for the exemption of Nigeria from the production cut. The concession was given considering the recent challenges the country has been through due to vandalism of oil and gas infrastructure, which has negatively impacted the country’s ability to produce oil optimally in the recent past

    This deal will obviously enhance the prospects for the energy industry with the impacts already being felt as oil price jumped more than five per cent in New York after the agreement was reached. A steady increase in oil price, one of the advantages the deal will produce, would most likely contribute positively to the revival of the economies of member countries presently undergoing challenges which Nigeria is a part of.  However, many of the details of the production cut deal are still being worked out by member countries and the group won’t decide on targets for each country until its next meeting at the end of November 2016. Kachikwu would be representing Nigeria and her interest at the November meeting.

    The landmark deal is coming at a time when Kachikwu played a key role to clinch the top job at the OPEC for Nigeria with the appointment of Dr. Mohammed Sanusi Barkindo as the Secretary-General of the Organization. This meeting was the first official meeting of OPEC to be organized by the new Secretary General since his official resumption on 1st August, 2016, he added.