Nigeria

Crude or condensate? The dilemma over Nigeria’s oil-cut exemption

20 Oct 2017   Nigeria

When OPEC agreed to exempt Nigeria from its oil production-restraint deal last year, it knew the country faced a huge challenge in recouping output lost due to militant unrest. A floating fuel filling station belonging to Nigeria’s state oil firm Nigerian National Petroleum Corporation (NNPC) sits idle on a river in the oil rich southeastern Delta state, Nigeria June 18, 2017. REUTERS/Tife Owolabi As tensions subside and the country pumps closer to normal levels, another dilemma looms for the producer group as it continues efforts to eradicate a price-sapping oil glut – how to count Nigeria’s crude output without mixing in condensates. The answer could determine when – and indeed if ever – Nigeria has to cut or curtail oil production, its key source of foreign currency. While Nigeria promised to cap at 1.8 million barrels per day (bpd) once production “stabilizes”, that limit exempts all […]

Nigeria: Government Rules Out Possibility of Building New Refineries

12 Oct 2017   Nigeria

The Federal Government has ruled out the possibility of building new refineries to compliment the four existing ones in Nigeria.The Minister of State for Petroleum Resources, Ibe Kachikwu, who made this known in an online media chart with journalists recently, said government has no immediate plans to build new refineries. He disclosed that the Federal Government is currently planning to refurbish the existing ones, which have 450,000 barrels in terms of combined capacity.Kachikwu attributed the current drop in the price of Premium Motor Spirit (PMS) to market forces. “Anything can affect the pricing either way as recently seen in the United State where the hurricane induced an almost 15 per cent increase in crude oil prices. Efficiency of refineries will definitely help to bring down price of PMS”, he added. Meanwhile, the Nigerian National Petroleum Corporation (NNPC) has announced a total export receipt of $471.90 million for the month […]

Nigerian producers eye India’s new-found appetite for US crude

12 Oct 2017   Nigeria, USA

The competition that Nigerian crude oil cargoes has faced from US crude oil grades in Northwest Europe over the past two years has begun to expand into other regions, according to trading sources. Largest buyer of Nigerian oil India importing more US oil NNPC pragmatic on US crude threat Since the US crude export ban was lifted in December 2015, there has been a gradual increase in shipments of US barrels to Northwest European and Mediterranean refiners, with the flow increasing sharply in recent weeks due to a wider Brent/WTI futures spread. As Northwest Europe is a major demand center for Nigerian light sweet barrels, this could be a rather bearish development for Nigerian differentials. In recent weeks, this competition has also extended east, with India increasingly looking to the US for its crude oil buy tenders. India is the largest buyer of Nigerian crude and as such plays […]

Niger Delta State Looks To Break Free From Oil

11 Oct 2017   Nigeria

Bayelsa, a state in the Niger Delta region of Nigeria, will search for non-oil natural resources to diversify away from its main commodity—oil. This is what the state’s new commissioner in the Ministry of Mineral Resources said after taking office. Markson Fefegha added that there are plans in place to buy geological survey equipment to be used for mapping the province and its mineral resources. Funding will hopefully come from international mineral resources companies, but the Bayelsa government is also considering directly approaching the World Bank, the African Development Bank, and China’s Exim Bank. According to commissioner Fefegha, the discovery and exploitation of new mineral resources will boost Bayelsa’s monthly internal revenue to US$14 million (5 billion naira), from about US$5.56 million (2 billion naira) currently. These plans, however, do not aim to replace oil revenues, but rather to complement them. Admitting that Bayelsa is dependent on the income […]

Nigeria’s “Zero Oil Plan”

4 Oct 2017   Nigeria

I recently reported on the development of economic diversification plans among countries in the Gulf Cooperation Council (GCC) as oil demand prepares to reach a climax in 30 years. Nigeria, among other African producers, has begun to adopt the same policy, according to new goals announced by Abuja this week. The National Economic Council (NEC) aims to increase total non-oil government revenues fivefold from $5 billion to $25 billion over an unspecified timeline. Nigerian oil revenues collapsed by $100 billion between 2015 and 2017 due to the ongoing oil price crisis, curtailed only slightly by the Organization of Petroleum Exporting Countries’ (OPEC) agreement to lower output by 1.2 million barrels per day. A militancy in the Niger Delta seriously curtailed oil production in the country’s oil-rich areas. Locals argue that Lagos, the Nigerian economic capital, and Abuja, the political capital, have monopolized the nation’s oil wealth, leaving those residents […]

Nigeria: How Much Did Former Oil Minister ‘Steal’?

3 Oct 2017   Nigeria

Cape Town — Diezani Alison-Madueke, served under former president Goodluck Jonathan from 2010 to 2015 and was Nigeria’s first female minister of petroleum resources. She has been accused of corruption and misappropriation of the country’s funds during her administration. Since leaving office in 2015, Alison-Madueke has been implicated in bribery, fraud, misuse of public funds, and money-laundering cases in Nigeria, Britain, Italy and the United States. The former minister is alleged to have stolen at least U.S.$90 billion from the state. Do you know how much US.$90 billion is? The Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, described the assets recovered from embattled former minister, as just the beginning. A string of court ordered forfeitures has already began after the Economic and Financial Crimes Commission applied to the courts to reclaim the money and the property on behalf of the government. The anti-graft agency has […]

Nigeria’s NNPC expects force majeure on Bonny Light to be lifted ‘very soon’

27 Sep 2017   Nigeria

State-owned Nigerian National Petroleum Corporation expects the force majeure on Nigeria’s Bonny Light crude to be lifted “very soon,” Mele Kyari, group general manager of NNPC’s crude oil marketing division told S&P Global Platts Wednesday. “I cannot give you an immediate time frame but I know that it will be very soon,” as soon as repair works are completed, Kyari said in an interview on the sidelines of the the APPEC conference in Singapore. Asked whether the force majeure will be lifted in October, he said “it is very likely yes.” Force majeure was declared September 16 on Nigeria’s Bonny Light crude, due to issues affecting one of the two major pipelines leading into the grade’s terminal, a spokesman for terminal operator Shell Petroleum Development Co. of Nigeria, or SPDC, has said. Article continues below… The Association of Southeast Asian Nations is set to have a significant impact on […]

Oil Majors Brace For More Niger Delta Attacks

25 Sep 2017   Nigeria

The slow pace of talks between the Nigerian government and representatives from the Niger Delta—exacerbated by the impending 2019 elections—have frustrated the militants who prompted the negotiations, causing oil majors to be concerned about an impending wave of attacks on the oil and gas infrastructure in the area, a new research note from Verisk Maplecroft says. “The fragile peace in the Niger Delta is on the cusp of breaking down again,” Malte Liewerscheidt, the consultancy’s senior Africa analyst, said. “Militant groups are running out of patience, the government is unable to deliver on its promises, the president is a ‘lame duck’, and the umbrella group negotiating on behalf of the militants shows signs of disintegration.” The collective effect of these realities pressurizes Nigerian politics going into the 2019 elections. High-strung rhetoric from opposing parties, who either promise too much or too little to the residents of the oil-rich Niger […]

Nigeria: Pressure On Nigeria As the World Turns Away From Oil

25 Sep 2017   Nigeria

It may assault sensibilities of some people to insinuate that Nigerians will have to drink their oceans of ‎oil, as it may be unscientific to suggest that the resource will dry up soon. But the alarm bells are ringing loudly as the world increasingly turns away from oil. The rate at which major oil consuming countries are setting deadlines for the use of the commodity spells doom for any oil economy. And indeed Nigeria! Sooner than later we would be asking ourselves what we did with all that oil. A very expressive analyst puts it this way: “‎They say life is not fair, but God is fair. He compensated the Arabs for the harsh desert conditions with abundant oil resources, and evidently they have used it well, but why did He give Nigeria so much oil and gas?” That may be a special favour to the country, but he […]

Nigerian Oil Output Below 1.8 Million BPD Quota

23 Sep 2017   Nigeria

Nigerian oil production remains below 1.8 million barrels per day, in compliance with a quota set on the African nation by OPEC earlier this year in response to its explosive output growth through 2017. Oil Minister Emmanuel Ibe Kachikwu made the announcement in Vienna, where the Organization of Petroleum Exporting Countries’ headquarters is located. The bloc has already agreed to extend output cuts through March 2018, although another extension may be in the works. Nigeria and Libya had both been exempt from the agreement when it was first announced last November. Both countries had seen their oil output decline steeply due to months and years of domestic strife, respectively. A militancy in the Niger Delta sprung from Abuja’s revenue sharing plans, which did little to develop the oil-rich lands which provide the fossil fuels that provide the federal government with the vast majority of its wealth. But the country’s […]

Nigeria ready to play OPEC ball, Russia says

23 Sep 2017   Nigeria

Nigeria may be ready to give up its status as an OPEC member exempt from the effort to balance the market with production cuts, Russia’s oil minister said. Members of a committee monitoring an agreement to cut the equivalent of about 2 percent of world’s oil demand out of the market met Friday in Vienna to discuss the impact. The measure is aimed at draining global stockpiles closer to a five-year average. Most OPEC members are in full compliance with the agreement, though exemptions for OPEC members Libya and Nigeria have complicated the effort. Both countries were sidelined from the effort so they could steer oil revenue toward national […]

Nigerian fuel truck drivers start strike; shortages feared

21 Sep 2017   Nigeria

Nigerian fuel truck drivers have begun a strike, their union said Wednesday, triggering fears of a fresh shortage of oil products.  In addition to seeking a pay rise and a better welfare package, the drivers are protesting the government’s neglect of the roads. The spokesman for the drivers’ unit of the blue collar oil workers’ union Nupeng, Tokunbo Korodo told S&P Global Platts on Wednesday that while the bad state of most Nigerian roads had claimed the lives of many drivers in accidents, employers have refused to increase drivers’ wages.  “In compliance with the directive by the national executive of Nupeng, drivers have been directed to stop [fuel] loading at the depots across the country,” Korodo said.

Nigerian Workers Stop Oil Product Loading As Union Goes On Strike

19 Sep 2017   Nigeria

Oil workers in Nigeria stopped on Monday the loading of oil products, natural gas, and aviation fuel as the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) joined an indefinite nationwide strike of its current affiliate United Labour Congress of Nigeria (ULC), demanding better conditions and pay as well as recognition of the ULC. Electricity union workers have also joined in the strike. The ULC is a breakaway union from the Nigeria Labour Congress (NLC). ULC split from the NLC last year over power struggles, and the NUPENG oil and gas workers’ union is now affiliated with the ULC. The ULC demands to be recognized and registered as a union. It also demands that roads to oil facilities be repaired and army personnel withdrawn from security duties at the oil infrastructure installations. The government, on the other hand, says the strike is illegal. The NLC, from which ULC […]

Nigeria: Oil Production Dips to 1.3mbd Over Vandalism, Says NNPC

15 Sep 2017   Nigeria

An average of 700,000bpd of crude oil was deferred in 2016 due to pipeline sabotage, this brought Nigeria’s production down to as low as 1.3 million barrels per day from 2.2 million barrels targeted for the period. At an average price of $52 per barrel, the country differed about $13.286 billion (N4.05 trillion). The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, stated this in a keynote address at the maiden edition of the Nigerian International Pipeline Technology and Security Conference (NIPITECS 2017) in Abuja yesterday. He said Year-To-Date 2017; NNPC had recorded 27 breaching incidents on the Trans Niger Pipeline (TNP), adding that for the Trans Forcados Pipeline (TFP) with a capacity of 300,000bpd, 17 breaches were recorded in 2016. NNPC also suffered at least 15 breaching incidents on the TFP, while charging members of the Pipeline Professionals’ Association of Nigeria (PLAN) to […]

Nigeria To Shutter Three Oil Refineries To Rehabilitate Output

14 Sep 2017   Nigeria

Wednesday . The Kaduna , Warri and Port Harcourt refineries will shutter to allow the national oil company to return refining capacity to their nameplate levels, NNPC managing director Dr. Maikanti Baru told reporters at the capital. “As you know, it is being the perception of the public that the repairs of the refineries are never done thoroughly. So this time, our intention is to shut down the refineries when we are ready, and then fully bring them back to what they should be as new refineries,” Baru said during the Nigerian Pipeline Security Conference going on in Abuja this week. Despite being Africa’s largest crude oil producer, Nigerian refining capacity is low, which has forced the government to spend foreign currency reserves on purchases of refined oil goods. Building new refineries within the country’s borders would allow Lagos to revitalize aging oil facilities while preserving foreign currency resources. […]

Nigeria Defies Calls To Curb Crude Oil Output

13 Sep 2017   Nigeria

Although it faces mounting pressure to join OPEC’s production cuts, exempt producer Nigeria will resist any attempt to cut its oil output because it needs time at least until March next year to make sure its production gains are sustainable, Oil Minister Emmanuel Kachikwu told the Financial Times in an interview published on Tuesday. “We have a nine-month exemption period within which to come back to the table,” Kachikwu told FT. “You need that timeframe to see if any recovery is sustainable,” the minister added, putting further pressure on fellow OPEC members in trying to persuade Nigeria to join the cuts. “They should let us exhaust those nine months and see whether we have been able to establish stability,” Kachikwu told FT, commenting on his country’s plans regarding joining the cuts. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC)—the panel tasked to supervise compliance with the cuts—is meeting in Vienna […]

Niger Delta Militants Rescind Threat Against Oil Majors

11 Sep 2017   Nigeria

A coalition of militants in the Niger Delta who had previously vowed to attack Nigerian oil and gas pipelines if their demands were not met by October 1 st , has agreed to rescind their threats on the fossil fuel infrastructure in the delta. Abuja held several closed-door meetings with the coalition on Thursday, after which the group declared its loyalty to the Pan Niger Delta Forum, which is negotiating with the federal government to increase the proportion of oil revenues used to develop the oil-rich delta. “ Niger Delta Forum (PANDEF), the Coalition of Niger Delta Agitators, which comprises over 250 groups with their leaders and representatives present at yesterday’s meeting, officially withdraw our quit notice issued to the Northerners and Yorubas living in Niger Delta region; call off planned resumption of attacks on oil and gas installations across the Niger Delta region and beyond from September 10, […]

Nigeria: Total’s Egina to Raise Nigeria’s Oil Output By 200,000bpd in 2018

8 Sep 2017   Nigeria

Federal Government’s plans to increase crude oil production to four million barrels daily (bpd) will receive a boost, as the multi-billion dollar Egina Floating Production Storage and Offloading (FPSO) vessel, currently being constructed in South is schedule to add 200,000 bpd to Nigeria’s output by the fourth quarter of 2018. Total Upstream Nigeria Limited (TUPNI) said the completion of the 200,000bpd vessel would be on schedule and within budget as Samsung Heavy Industries (SHI) is nearing its completion. When TUPNI and the Nigerian Content Development and Monitoring Board (NCDMB), insisted that the Egina FPSO must be integrated in Nigeria, it was quite a challenge to find the shipbuilding company, which would build an integration yard. In the global oil and gas industry, the fabrication and integration of the FPSO modules requires high-end technology, which only a few international companies have the capacity to take on the scope of responsibility. […]

Nigeria Pays $120 Million Demurrage Annually On Imported Fuel

30 Aug 2017   Nigeria

The federal government is currently counting significant losses arising from demurrage paid by vessels which bring in imported petroleum products into the country. Available statistics shows that the country pays $120 million annually on demurrage due to infrastructural constraints. LEADERSHIP learnt that major marketers who augment importation of products into the country reportedly build the cost into final receipts issued to the Nigerian National Petroleum Corporation, NNPC, which bore the additional cost so that pump price stays at N145 per liter for Premium Motor Spirit, PMS also called fuel. LEADERSHIP reports that infrastructural constraints has continue to have a significant impact on the distribution of petroleum products; with 70 per cent of Nigeria’s domestic petroleum products demands being met through petroleum importation. As at 2016, Nigeria spent N2.5 trillion on the importation of refined petroleum products according to data from the Nigerian Bureau of Statistics (NBS), making […]

Shell starts new work in Nigeria’s Niger Delta

24 Aug 2017   Nigeria

The Nigerian subsidiary of Royal Dutch Shell said Wednesday that hundreds of thousands of new barrels of product are expected from a project in the Niger Delta. Shell said it started production from the second phase of its Gbaran-Ubie project in Nigeria’s Niger Delta region. The company said 18 wells have been drilled at the site already and a new pipeline connects it to a nearby plant. Peak production is forecast at 175,000 barrels of oil equivalent per day by 2019, though most of that would be in the form of natural gas. “Today’s announcement is a positive step for Shell’s global gas portfolio,” Andy Brown, Shell’s director of exploration and production, said in a statement . “It […]

Nigeria: Oil Production At $32 Per Barrel Too High – Kachikwu

18 Aug 2017   Nigeria

The Minister of State for Petroleum Resources, Ibe Kachikwu, has decried the high cost of oil production at 32 dollars per barrel, saying it makes cost of Foreign Direct Investment very expensive. Kachikwu made the assertion at the 2017 annual conference of the National Association of Energy Correspondents (NAEC), in Lagos. The minister said that the Federal Government was making frantic efforts to bring down the cost to 15 dollars per barrel in order to significantly bring down cost of FDI. “The outcome of this initiative will be a win-win for investors and the nation,” Kachikwu said. He said the Petroleum Industry Governance Bill (PIGB) had been structured to fully turn around the petroleum sector and make it attractive to investors. Kachikwu also said that the security issues and funding gap in the area of refinery had delayed the take-off of refinery projects, even after licences had been issued. […]

Nigeria: NNPC Cuts Production Cost to $23/Barrel

18 Aug 2017   Nigeria

The Nigerian National Petroleum Corporation (NNPC) said yesterday that the country has saved a minimum of $3billion per annum by cutting the cost of crude oil production from $78 dollars per barrel to $23 per barrel as at August 2015, representing 70.5 per cent reduction. The Group General Manager of National Petroleum Investment Management Services (NAPIMS), a unit of NNPC, Engr. Dafe Sejebor, disclosed this during the inauguration of the anti-corruption committee of the unit. A statement issued by the Corporation’s spokesperson, Ndu Ughamadu, noted that NAPIMS arrived at the figure after looking at the difference between the $78 and $23 which represent the old and new cost of production in relation to the present daily average production in the country. “If you knock down your cost of production from $78 per barrel to $23, take the difference and multiply by the average daily production, you will discover that […]

Protesters drag Shell Niger Delta oil facility shutdown into fifth day

16 Aug 2017   Nigeria

Protesters on Tuesday dragged the shutdown of a Shell crude oil facility in the Niger Delta into its fifth day, after storming the flow station demanding jobs and infrastructure development last week. Echoing a common complaint in the impoverished swampland that produces most of Nigeria’s oil, the protesters said they were not benefiting from the region’s oil wealth and wanted an end to the oil pollution that has ruined much of the land. Protesters still numbered around 800 people, praying and cooking under canopies set up at the Belema Flow Station in Rivers state as security personnel watched. Shell had evacuated staff late on Thursday, the day before the protest, and shut the facility when it became clear the demonstrators were on their way there, the company has said. The firm also said last week that its “commitment to the welfare of host communities in […]

Nigeria: We’ll Continue Operation Till You Empower Us, Ex-Illegal Oil Refiners Tell FG

15 Aug 2017   Nigeria

 Former illegal oil refiners in Rivers State have vowed to continue in their illegal dealings in petroleum products until the Federal Government provides them with empowerment.  The artisanal refiners, who are mainly drawn from the Ogoni extraction, noted that they cannot leave their only source of survival until the Federal Government provides them an alternative.  Their position was disclosed to Minister of State for Environment and Chairman, Governing Council, Hydrocarbon Pollution Remediation Project, Ibrahim Jibrin, in Port Harcourt, at a one-day consultative meeting organised by the office of the Project Coordination, HYPREP.  Speaking for the ex-artisanal refiners, Mr. Domka Humphrey said they can only stop refining petroleum products illegally if the Federal Government empowers them and include them in the remediation process in Ogoni.  Humphrey said: “Sir, I will tell you our minds, if you don’t empower us, we will not stop refining, because this is what we feed our families and relations with. We don’t have anything doing after government took away the pipeline surveillance from us.

Nigerian Protesters Storm Shell Crude Oil Flow Station

12 Aug 2017   Nigeria

Hundreds of Nigerians stormed on Friday a Shell-owned crude flow station that feeds the Bonny export terminal, protesting against lack of jobs and demanding infrastructure development, according to a Reuters witness. The protesters were also asking for an end to oil pollution in the Niger Delta and claimed that they were not benefiting from the oil-rich resources in the restive area. The army sent reinforcements to the Belema Flow Station in Rivers State, after the protesters had said that they would remain at the facility for two weeks, according to the witness. It was not immediately clear if the protest had disrupted any operations or if the situation has had an impact on crude oil production. The Nigerian unit of Shell said on July 24 that it had shut its Trans Niger Pipeline due to a leak, while the managing director of the Nigerian National Petroleum Corporation (NNPC) said […]

Niger Delta Legalizes Illicit Oil Refineries

7 Aug 2017   Nigeria

The Nigerian government will make illicit refineries operating in the Niger Delta legal, and will even supply them with crude oil, the presidency announced yesterday. The legalization process will take until the end of the year, and the crude they will process will be sold at a reasonable price. The move, in stark contrast with years of forceful shutdowns of illegal refineries in the poverty-ridden Delta, follows negotiations between the federal government and local community leaders that were aimed at resolving problems, including oil theft that causes spills and losses for pipeline operators as well as lack of jobs in the area. Oil theft is how most of these mini-refineries get the crude to process, and it has been a major headache for Nigeria’s oil industry. Last month, Bloomberg’s Paul Wallace reported that according to Wood Mackenzie estimates, almost a third of the crude that flows along pipelines in […]

Nigeria’s NNPC in funding deals with foreign partners to develop oil fields

3 Aug 2017   Nigeria

Nigerian National Petroleum Corp said Thursday it had agreed new funding arrangements with four foreign partners to develop new oil fields in the Niger Delta that will substantially increase Nigerian reserves and daily production. The first of the deals, with US major Chevron Corp., is for development of two offshore oil blocks OMLs 91 and 91 and is expected to add 211 million barrels of oil and 1.9 Tcf of gas to Nigerian reserves, and potential output of 30,000 b/d of oil equivalent, the NNPC added. The second agreement was signed with the Shell, Total and Eni joint venture partnership for the development of several onshore and offshore oil fields that had long been delayed due to a lack of funds. “The deal (Project Santolina) is for an accelerated upstream production comprising of 156 development activities across 12 OMLs and 30 fields in the Niger Delta,” NNPC said. Lack […]

Nigeria: Security Still a Challenge in Niger Delta – Shell

2 Aug 2017   Nigeria

Shell Petroleum Development Company has disclosed that its operation is still threatened by insecurity in the Niger Delta. The company indicated in its latest report that crude oil theft, sabotage and related damage to oil and gas facilities continue to present significant security concerns in parts of the Niger Delta, as well as environmental damage, which is aggravated by the proliferation of illegal refineries in the area. It stated that illegal refining and third-party interference are the main sources of pollution in the Niger Delta today. According to the report, third-party interference is the cause of 90% of the number of spills of more than 100 kilograms from The Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) pipelines in 2016. It stated that security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, vandalism, threats from self-described militant groups, […]

Nigeria: Government Vows to Halt Oil Production If Cost Remains High

2 Aug 2017   Nigeria

International Oil Companies (IOCs) and their indigenous counterparts may soon be forced to halt operation, as the cost of producing a barrel of crude oil remains high. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, says there is no way the country can keep producing, while the prices of crude remain low. The minister said that the oil sector has suffered infrastructural deficit of over $15 billion (N4.59 trillion) as many investment has been put on hold due to the low oil prices. At an international conference and exhibition organised by the Society of Petroleum Engineers in Lagos, he said it is better for Nigeria to stop crude oil production than to produce at a high cost. The minister said that government is compelled to work towards drastic reduction of cost of production because “there is no way this country will produce oil at this sort of […]

Nigeria: 3 Yrs of Low Oil Price and Nigeria’s Struggle for Survival

2 Aug 2017   Nigeria

After trading at over U.S.$100 per barrel for some years, the price of oil began to tomble down around July, 2014, falling to below U.S.$30 per barrel. The collapse of the price of crude created serious economic crisis for oil-reliant countries, including Nigeria. It was not unexpected that Nigeria became one of the countries most affected by the downturn. Central to the economic crisis that would later befall the country was her over reliance on oil. Oil accounts for 69 per cent of exports, according to the National Bureau of Statistics (NBS) and around 70 per cent of government revenue. The impact started to be felt at the most unfavourable period, at the crucial time a new administration had just come into office. The slump in crude prices, Nigeria’s mainstay, hammered the country’s earnings, leading to a significant decline in the country’s foreign reserves and a free fall of […]

Nigeria: Boko Haram Attack On Nigeria Oil Team Killed Over 50

31 Jul 2017   Nigeria

More than 50 people were killed in a Boko Haram ambush on an oil exploration team in northeast Nigeria earlier this week, multiple sources told AFP news agency on Thursday, warning the death toll could rise. Tuesday’s attack in the Magumeri area of Borno state on a convoy of specialists from the Nigerian National Petroleum Corporation (NNPC) was the group’s deadliest in months. It underscored the persistent threat posed by Boko Haram fighters, despite government claims they were a spent force, and also the risks associated with the hunt for crude in the volatile Lake Chad basin. Details of the ambush, which was initially thought to be a kidnapping attempt, have been slow to emerge and an exact death toll difficult to establish, as the military strictly controls access to rural Borno. Telecommunications and other infrastructure have been severely damaged or destroyed in the conflict, which has left at […]

Nigerian media reports halt to some crude oil production

28 Jul 2017   Nigeria

Nigerian media reported Thursday the federal government opted to halt crude oil exploration in part of the Niger Delta because of heightened security concerns. Militants struck a crude oil pipeline in Nigeria early this week , sidelining more than 100,000 barrels of oil per day. On Wednesday, militants abducted dozens of oil contractors working for the Nigerian National Petroleum Corp., though security forces were said to have conducted a successful rescue mission. Nigerian news service This Day reports nine soldiers and one civilian were killed during the operation. Nigeria is a member of the Organization of Petroleum Exporting Countries, but is exempt from a multilateral agreement to stem production because it needs oil revenue to fund national security efforts. Improvements late […]

Nigeria To Shake Off The Shackles Of Oil

27 Jul 2017   Nigeria

Nigeria is now saying that “era of oil booms” may be over—for good. According to its national petroleum policy approved this week by the federal executive council, the country plans to cut its oil exploration costs and move away from reliance on revenues from crude oil exports. Its expectations are that oil prices will hover near $45 per barrel “for the foreseeable future”, necessitating a shift towards diversifying its economy and develop its own refining and petrochemical sectors. “The most realistic line of action for any nation with oil as the backbone of its economy is to diversify, because indices strongly point to the possibility that the era of oil booms may be over for good”, said the policy . In accordance with this 112-page policy document, the other aim of Africa’s second biggest oil producer is to reduce the cost of extracting oil, which now stands at $29 […]

Militants hit Nigerian crude oil pipeline

26 Jul 2017   Nigeria

Nigerian crude oil production was lowered following a militant tank on an oil pipeline, the state oil company said. File photo by vanhurck/Shutterstock July 25 (UPI) — A militant attack on a crude oil pipeline in Nigeria has sidelined more than 100,000 barrels of oil per day, the head of a state oil company announced. Maikanit Baru, the head of the Nigerian National Petroleum Corp., said as-yet identified saboteurs caused a breach on a major transit artery, curbing 150,000 barrels of oil per day. The rupture from the Trans-Niger pipeline came as parties to a committee monitoring a production agreement coordinated by the Organization of Petroleum Exporting Countries, of which Nigeria is a member, met to consider its impacts. Baru said the problem at the pipeline created obstacles to sustaining what he said was the 2.2 million barrels of crude oil production per day reached last week. “Unfortunately, we […]

Nigeria Oil Thieves Keep a Lid on Output Even as Bombs Abate

21 Jul 2017   Nigeria

The continual disruption blighting the impoverished delta region threatens plans to exceed 2 million barrels a day, according to Wood Mackenzie. (Bloomberg) — The Agbada 2 flow station should have been buzzing with activity, pumping crude to one of Nigeria’s largest export terminals. Instead it was idle in the muggy, mid-morning heat as Wilcox Emmanuel, the facility’s manager, shrugged in resignation about the thieves who’d shut him down. As much as 30 percent of the oil sent by pipelines through the swampy Niger River delta is stolen, consultant Wood Mackenzie Ltd. estimates. That’s depriving the country of income amid a crippling recession and compounding the pain of a global price slump for Africa’s largest producer. At Agbada, the wells dotting the surrounding forests had been closed for three weeks following a pipeline leak that was probably deliberate. “Who knows when we’ll be back up?” Emmanuel said. The 60,000-barrel-a-day flow […]

U.S. seeks to recover $144 million in Nigeria oil industry bribery case

15 Jul 2017   Nigeria

The U.S. Justice Department on Friday filed a civil complaint seeking to recover about $144 million in assets obtained through paying bribes to a former Nigerian oil minister, the department said in a statement. The complaint said that from 2011 to 2015 two Nigerian businessmen conspired with others to pay bribes to the minister, Diezani Alison-Madueke, who steered lucrative oil contracts to companies owned by them. The proceeds were laundered in and through the United States, and were used to purchase assets including a $50 million Manhattan condominium and an $80 million yacht, it said. Alison-Madueke was charged with money laundering in Nigeria, the country’s financial crimes agency said in April. She previously denied to Reuters any wrongdoing when questioned about missing public funds and corruption allegations.

Libya gains balance Nigerian oil loss

15 Jul 2017   Libya, Nigeria, OPEC

Officials from a state oil company in Libya brief representatives from Norwegian energy company Statoil about the potential to bring production back to normal levels. Photo courtesy of the Libyan National Oil Corp. July 14 (UPI) — Disruption to Nigerian oil exports is offset by production gains from Libya, which is on pace to add another 100,000 barrels per day to the market, a market report found. Nigeria and Libya are two members of the Organization of Petroleum Exporting Countries exempt from a multilateral effort to balance the market with production declines so they can steer oil revenue to national security efforts. Since the deal was implemented in January, both countries have stabilized somewhat and in part undermined the broader OPEC-led effort. OPEC economists in their monthly market report for July said that, combined, Nigeria and Libya were adding about a quarter million barrels of oil per day to […]

Shell Nigeria Declares Force Majeure On Nigerian Light Oil Exports

15 Jul 2017   Nigeria

Shell’s Nigerian unit declared a force majeure on Bonny Light crude oil exports effective 12:00 local time on Thursday, just two weeks after it had lifted a previous force majeure on exports of the grade. According to Shell Petroleum Development Company of Nigeria Ltd, as quoted by Reuters, the force majeure was declared after Aiteo, the operator of the Nembe Creek Trunk Line—one of two pipelines that export the Bonny Light grade—shut down the line. On June 30, a Shell spokesman told Platts that the company had lifted a force majeure on Bonny Light exports on June 28. That force majeure was declared on June 8 after the other export pipeline, Trans Niger Pipeline, was shut down following a sabotage attack by oil thieves. The grade was exported, but cargoes were delayed by around 10 days. Exports of Bonny Light in June were planned at 203,000 bpd . The […]

Capping Libya, Nigeria Output Won’t Help Erase The Glut

14 Jul 2017   Libya, Nigeria, OPEC

The steady recovery of oil production in Libya and Nigeria in recent months has prompted OPEC to consider limiting the output of the two African producers that are currently exempt from cuts in the deal. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) is gathering in Russia on July 24, and has invited Nigeria and Libya to attend to discuss their current production and short-term plans. According to Kuwait’s Oil Minister Issam Almarzooq, OPEC might ask the two nations to cap output as soon as possible. Talk of Libya and Nigeria possibly capping crude production has had little effect on the market, and analysts doubt that a limit would be lower than the current production of the two countries. Observers think that the two producers would agree to cap output when they reach their short-term production targets, which is 1.25 million bpd for Libya and 1.8 million bpd for Nigeria. […]

Nigeria to put off deciding whether to join OPEC cuts, minister says

13 Jul 2017   Nigeria, OPEC

Nigeria supports OPEC’s efforts to stabilize oil prices, but it wants to wait before deciding whether join the cartel’s cuts in oil production, its oil minister said on Wednesday. “Hopefully, in the next two to three months we can see how predictable the production return has been and then can say we feel stabilized and need to make the corresponding cuts,” Emmanuel Ibe Kachikwu told reporters. Nigeria and Libya, whose output has been hit by political turmoil and attacks, are exempt from an the Organization of Petroleum Exporting Countries agreement, which is an effort to reduce a glut of crude oil on world markets. Nigeria’s benchmark level to join the OPEC cuts is production of 1.8 million barrels of crude a day. Its current output is around 1.7 million barrels a day, excluding condensates, Kachikwu said. Nigeria’s output had improved in recent months, after the government […]

More oil possible from Libya, Nigeria, a report finds

7 Jul 2017   Libya, Nigeria, OPEC

A report Thursday from oil pricing group Platts stated that more production is possible from OPEC members Libya and Nigeria, adding to supply-side concerns. A survey of production from members of the Organization of Petroleum Exporting Countries by Platts found total group production rose 220,000 barrels per day between May and June. Total production last month was a six-month high for OPEC. OPEC, with support from non-member state producers like Russia, is coordinating an effort to balance a lopsided market with managed production declines. Libya and Nigeria are exempt from the arrangement so they can support national security efforts with oil revenue. Platts reported that Libyan oil production in June was around 810,000 barrels per day for its highest level in nearly […]

Nigeria Only Oil Producing Country Struggling With Importation of Refined Products – Kachikwu

30 Jun 2017   Nigeria

Minister of State for Petroleum Resources, Ibe Kachikwu Wednesday stated that the present oil that has remained the main stay of the nation’s economy may not last beyond 39 years. The Minister also lamented that Nigeria remained the only oil producing country still struggling with the importation of refined petroleum products. Speaking at the 5th Triennial National Delegates Conference of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN in Abuja Kachukwu described as embarrassing the country’s inability to refine oil in the country. Predicting the future of oil in the country, he said the nation’s future lies in the area of gas, saying at best, the nation’s oil reserve will last for another 25 to 39 years, while the nation’s gas reserve will last for over 60 years. According to him, “For me, the whole idea of continuing importation of petroleum products in this country is […]

Nigeria Near 40-Billion-Barrel Oil Reserves Target

30 Jun 2017   Nigeria

The plan by the Nigerian National Petroleum Corporation (NNPC) to grow the nation’s crude oil reserves to 40 billion barrels by the year 2020 received a major boost yesterday with the execution of a tripartite agreement in Abuja. The agreement was between the NNPC/FIRST Exploration & Production Joint Venture and Schlumberger for the development of the Anyalu and Madu fields in the Niger Delta under Oil Mining Licence, OML 83 and OML 85, offshore Nigeria. Under the agreement, Schlumberger would provide the over $700 million development cost of the Anyala and Madu fields which would generate 193 million barrels of crude oil into the current reserves of 37.2billion barrels and an additional 800 billion cubic feet of gas into the nation’s proven gas reserves which currently stand at 197 Trillion Cubic feet of gas. In terms of daily production, the fields will yield 50, 000 barrels of crude oil […]

Nigeria: Neiti – Over U.S.$21.8 Billion Unaccounted for By NNPC

24 Jun 2017   Nigeria

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the Nigeria National Petroleum Corporation (NNPC) is supposed to remit over $21.8 billion billions to the Federation Account. The agency’s Director of Communications, Orji Ogbonnaya Orji, on spoke thursday on ARISE Television, a THISDAY sister broadcast station, said the discovery came as a result of the audited account of the NNPC. He explained that the unremitted amount was a combination of monies earned by the NNPC and all its subsidiaries from several projects executed in the oil sector in the past few years, but were not remitted to the federation account. He further said the agency’s report had been made known to the Acting President, Prof. Yemi Osinbajo, who was impressed with its findings. He said the agency discovered that the money was earned but not remitted to the Federation Account. He added that such unremitted money could be […]

Nigerian Crude Exports to Hit 17-Month High in August

23 Jun 2017   Nigeria

Nigerian crude exports will top 2 million barrels per day in August, reaching a 17-month high, according to new data compiled by Reuters on Thursday. Attacks by militants in the Niger Delta had crippled production in 2016, but the African nation has been rebuilding output steadily through 2017. Drops in output last year were so bad that OPEC exempted Abuja from the bloc’s November deal to cut production by 1.2 million barrels per day. The new rise in exports can partially be attributed to delayed shipments from July, Reuters said. An estimated 2.02 million bpd of Nigerian crude will leave ports on 67 tankers in August, along with another 97,000 bpd of condensates. The Forcados crude grade began loading again earlier this month, when Royal Dutch Shell lifted a force majeure on facilities related to the grade. A total of 10.3 million barrels of Forcados crude will be shipped […]

Once Again, Tensions Are Rising In Nigeria’s Oil Sector

23 Jun 2017   Nigeria

On 2nd May 2017, Nigeria’s House of Representatives rejected a motion requesting that the House compel international oil companies (IOCs) to relocate their headquarters to the Niger Delta. The initiative initially emerged in March 2017, when then-acting President Yemi Osinbajo disclosed that the government was considering the move as part of a wider effort to restore peace to the oil-rich region, which has suffered from decades of ethnic and political unrest. Despite over half a century of oil production in the Niger Delta – which holds 95 percent of the country’s oil reserves – Nigeria’s key oil-producing region has remained subject to extensive corruption and severe underinvestment. The Niger Delta region consists of nine states: Edo, Delta, Bayelsa, Rivers, Akwa Ibom, Cross River, Ondo, Abia and Imo, but the majority of oil production is focused in Bayelsa, Rivers and Delta states. Due to endemic government corruption, and economic mismanagement, […]

Nigeria’s cut exemption at risk from oil revival

23 Jun 2017   Nigeria

Upward production trend could be maintained Producer faces joining OPEC pact as output recovers August exports seen surging to 18-month high Security situation fragile despite fall in attacks Nigerian oil output has recovered to its highest level in more than a year as militant attacks have declined substantially, along with the return of key export grade Forcados. Including crude and condensate, output from OPEC’s biggest African producer plummeted to near 30-year lows of around 1.2 million b/d in 2016, from 2.2 million b/d previously, as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy. But Nigerian crude oil production in May jumped to 1.73 million b/d, up 80,000 b/d from April, its highest level since March 2016, according to the most recent S&P Global Platts OPEC survey. Since then, the Forcados restart has boosted flows and production is expected to increase […]

Nigeria: Militants Give Northerners October 1 to Quit Niger Delta

17 Jun 2017   Nigeria

A coalition of Niger Delta militant groups rose from a meeting in Port Harcourt, Rivers State yesterday ordering all northerners to quit the oil-rich region. The militants threatened to attack all oil wells owned by northerners in Niger Delta before October 1, 2017. The groups, under the aegis of the Coalition of Niger Delta Agitators, berated the Acting President, Yemi Osinbajo, Inspector General of Police, Department of State Services and the Army for not arresting those who issued an ultimatum to Igbo to leave the north. This development has stoked the tension that is threatening to tear the nation apart. The government which has initiated a peace process may have to increase its parleys with stakeholders to avert the threats to the Nigerian union. At the joint meeting between the Coalition of Niger Delta Agitators and youth leaders across the region to review […]

Nigeria: Oil Output Hits Over 2.0m BPD As Shell Lifts Force Majeure On Forcados

13 Jun 2017   Nigeria

Shell Petroleum Development Company Limited has officially lifted force majeure on exports of Nigeria’s Forcados crude oil, thus increasing the nation’s oil output by additional 200,000 barrels per day. Force majeure is a legal declaration, meaning that the operator cannot fulfil a contract due to circumstances outside its control in order escape any liability. Consequently, the nation’s total production increased from two million bpd to about 2.2. million bpd, the highest in 16 months. Investigations showed that the Organisation of the Petroleum Exporting Countries, OPEC has started monitoring developments in the nation in order to see the possibility of including Nigeria in its oil output cut before the end of 2017. Nigeria and Libya were excluded from the cut in May when the organisation met in Vienna, Austria to adopt an action towards achieving stability in the volatile market. At the end of the meeting, OPEC had indicated in […]

Nigeria To Return 20% Of OPEC Cuts To The Market

12 Jun 2017   Nigeria

Shell lifts force majeure on Forcados oil in Nigeria Royal Dutch Shell (ticker: RDSA) lifted force majeure on exports of Nigeria’s Forcados oil grade, returning about 250 MBOPD to world markets, according to shipment data obtained by Bloomberg . Europe’s largest oil company placed the crude grade under force majeure – meaning the company could miss contractual obligations due to circumstances outside of its control – more than a year ago after repeated attacks on infrastructure by the Niger Delta Avengers (NDA). The NDA militia attacked a number of oil and gas pipelines in Nigeria in an attempt to undermine the presidential administration. The attacks dropped the country’s oil output by 1 MMBOPD to just 0.8 MMBOPD in June of last year. Ready to put about 20 percent of the OPEC cut production back into global oil supply The persistent attacks on the country’s oil and gas industry were […]