Nigeria: Govt Loses N7.6 Trillion to Faulty Oil Sector Agreements

16 Dec 2017   Nigeria

The Federal Government has lost $21 billion (about N7.6trn) to faulty agreements with international oil companies from 1993 to 2017. Addressing State House reporters after the cabinet meeting yesterday, the Minister of State for Petroleum Resources, Ibe Kachikwu, said the loss was due to failure to act on the provision of Section 15 of the Production Sharing Contracts of the Deep Offshore Act. The Act stipulates that once the price of crude exceeds $20 per barrel, steps would be taken to distribute “premium element” at an agreed premium level for the Federal Government for higher revenue. This was not the case over the last 20 years. The minister said the Federal Executive Council, therefore, approved a proposal to amend the Act in order to increase oil revenue by $2 billion. He said he would work with the Attorney-General of the Federation on the proposed amendment. “In 2013, there was […]

Refining Capacity Growth In Nigeria Will ‘Substantially’ Erode Exports

13 Dec 2017   Nigeria

Nigeria’s projected growth in refining capacity over the early 2020s will ‘substantially’ erode the country’s crude oil exports due to a ‘weak’ new project pipeline. Nigeria’s projected growth in refining capacity over the early 2020s will ‘substantially’ erode the country’s crude oil exports due to a ‘weak’ new project pipeline, according to a new report from BMI Research. While the report hailed the projected start up of the 650,000 barrel per day (bpd) Dangote refinery by 2020 and the potential of a second 250,000 bpd facility start up by 2021, oil and gas analysts at BMI highlighted that Nigeria may struggle to increase its oil production to meet new demand from these facilities, as well as sustain exports, as other countries have done. “Saudi Arabia has successfully managed this challenge, adding new capacity in 2013 and 2015, yet maintaining strong levels of exports,” the report stated. Nigeria however, has […]

Nigeria: Petrol Depots Still Dry Despite NNPC’s Pledge to Flood Market

13 Dec 2017   Nigeria

Despite the pledge by the Nigerian National Petroleum Corporation (NNPC) to flood the country with petrol, most of the depots in Lagos were still dry at the weekend as the corporation’s imported cargoes were still to arrive the country, THISDAY has learnt. THISDAY, however, gathered that the queues experienced in some filling stations did not worsen, despite the tight supply. The queues resurfaced a week ago after some oil traders involved in NNPC’s Direct Sale-Direct Purchase (DSDP) contract flooded the market with diesel instead of petrol that was stipulated in their contract agreements. While the market became wet with diesel, there was a shortfall in the supply of petrol by the NNPC, which is majorly the sole importer of the product. The shortfall had fueled an allegation by the Independent Marketers Association of Nigeria (IPMAN) that the NNPC was undersupplying its members and giving priority to depot owners. IPMAN […]

Nigeria Reforms Oil Sector To Draw New Investment

8 Dec 2017   Nigeria

The additional revenue generated from the reforms will be used to help balance the federal budget and encourage fresh investment in the energy industry. “The reform is aimed at increasing private sector equity participation to improve efficiencies in the sector and also provides revenue to the government, which will be deployed solely and exclusively for creating new assets in Nigeria,” a statement from the Debt Management Office (DMO) said. The idea of raising revenue by selling stakes in JV energy assets has been on the table for more than a decade but has always faced significant opposition. However, the plan was given fresh impetus in 2015, when the Central Bank of Nigeria (CBN) promoted the measure as a way to stimulate economic development and create jobs, offsetting the negative impact of falling oil prices. Sharper focus on inefficiencies and finances The proposals signal a significant change in the way […]

Shell Idles Six Nigerian Power Plants After Gas Shortage

8 Dec 2017   Nigeria

Nigeria’s lack of infrastructure is hampering the transportation of gas to power plants, and six plants are currently sitting idle in the country because they lack gas, according to Shell’s Nigerian unit, Shell Petroleum Development Company (SPDC). “The reason is because we have about six power plants in this country that are standing idle that are not getting gas. The reason why they are not getting gas, even though we are flaring 800million scuf per day is that we don’t have enough pipelines to deliver the gas to the power plants,” SPDC Senior Commercial Adviser, Upstream Gas, Emmanuel Anyaeto, said at a gas forum. Gas producers in Nigeria are owed some US$500 million, mostly by power companies, Anyaeto said , adding that the power companies in turn are also owed huge sums, mostly by the Nigerian federal government. The lagging payments to producers, as well as regulatory issues and […]

Exclusive: China’s Sinopec looking to sell Nigeria business – sources

7 Dec 2017   China, Gabon, Nigeria

China’s Sinopec Group has hired BNP Paribas ( BNPP.PA ) to sell its oil business in Nigeria and Gabon, three people with knowledge of the matter said, as the state-owned oil giant pares back its presence in Africa. Sinopec and other oil groups including China National Petroleum Corporation and CNOOC ( 0883.HK ) made large acquisitions between 2009 and 2013 with the help of low-cost loans from Chinese state-owned banks. Sponsored The hunt for overseas assets was intended to bulk up their energy reserves and meet future demand from China, the world’s second-largest economy. But oil prices fell to about $27 a barrel in 2016 from more than $100 in 2014, making some of these investments unprofitable. Benchmark Brent Crude oil LCOc1 is […]

Nigeria: Fuel Scarcity Throws Nigerians Into Panic

6 Dec 2017   Nigeria

Nigerians have been thrown into panic following the re-emergence of long queues at fuel stations in parts of the country. The situation, amid rumour of hike in pump price of petrol, sparked fear that the festive season could be marred by scarcity of the product. In Abuja, many motorists who closed from work yesterday were unable to buy fuel, as many stations were shut. At about 8 p.m., there was a long queue at the NNPC retail station along Kubwa Expressway that kept motorists waiting for hours. One buyer, Alabi Ajibola, said: “Most fuel stations have closed. I have been on the queue for about two hours. This should not be at this Christmas period.” Haruna Bashir, a commercial driver, said his side mirror was destroyed as he jostled to buy fuel. […]

Nigeria Delta Protestors Shut Down Two Oil Wells

1 Dec 2017   Nigeria

Protestors shut down Adibawa wells 4 and 10, which feed into a flow station of the same name. Hundreds of demonstrators, comprising youths, elderly people, and women gathered to sing in solidarity and to demand power supply to their homes from the oil facility nearby. “We took the step as a last resort following several talks, the oil firm had given us hope but they later backed out by telling us that the transmission line to our community is not strong enough cannot carry the power,” youth leader Oyeso Atena said. “We have several oil wells here and merely shutting two of them have put the entire Adibawa flow station out of action, and that shows that without the oil wells from here, the flow station cannot fire and we are just asking that they give us electricity from that facility.” The oilfield in question […]

How Nigeria’s Oil Industry Went Local

30 Nov 2017   Nigeria

The biggest real-estate foreclosure in Manhattan’s history began with a Nigerian jet-fuel binge. Kola Aluko, now in hiding from the authorities of multiple countries, allegedly spent so much money on jet fuel that he could no longer pay the mortgage on his Midtown penthouse, which was consequently auctioned for $36 million in late 2017. Aluko is a central figure in criminal trials for money laundering and petro-business corruption now underway in Houston, Lagos, and London. Media coverage has, understandably, focused on the juicy details of his spending. Along with the penthouse, he owned a yacht that Jay Z and Beyoncé once rented for her birthday party, but now, on orders of a Nigerian court, sits idle with other seized cars and jets. A less-discussed byproduct of the alleged crimes committed by Aluko and his conspirators in the Nigerian government, however, is how they catalyzed what was possibly the largest […]

Can Nigeria And Libya Avoid A Production Cut?

30 Nov 2017   Libya, Nigeria

Beyond discussing the broader terms of the production cut deal, OPEC will crunch the numbers of exempt producers Libya and Nigeria this week to see if their oil production has recovered enough to justify asking or persuading them to join the pact with some sort of cap. However, the outlook for both countries’ future oil production is still clouded, as militant and civil strife hasn’t completely vanished, but has abated enough in recent months to allow the two African producers to boost their oil production to the highest in years. So while OPEC will likely discuss Libya and Nigeria’s production, it’s uncertain whether it will impose quotas or caps due to the still-tentative recovery and possible return of sudden outages due to militancy, sources and analysts tell Platts . At June’s end, Libya topped one million bpd of crude oil production for the first time in four years . […]

Nigeria Makes First Step Away From Oil

25 Nov 2017   Nigeria

Nigeria’s state oil company is venturing into renewable fuels with a contract that will see a bioethanol plant built in the state of Kebbi, in northeastern Nigeria. The plant will have a capacity to produce 84 million liters of bioethanol derived from cassava and sugarcane. This is the second such contract that NNPC has signed with state governments this month. Earlier, the state oil company inked a preliminary contract with the government of Ondo state for a 65-million-liter bioethanol plant, to use cassava as feedstock. That project, according to NNPC’s group managing director Maikanti Baru, would also involve foreign investments. The idea of developing a biofuels industry in Africa’s top crude oil producer was originally announced by the federal government back in February, with a plan to establish a fund of US$50 billion to develop biofuels production. The funds will be provided to a Bieofuels Equity Investment Fund, which […]

Nigeria: Reps Kick Against Nigerian Govt’s Plan to Spend $1.8 Billion On Refineries

24 Nov 2017   Nigeria

The House of Representatives has criticised a bid by the Nigerian National Petroleum Corporation, NNPC to spend $1.8 billion on the maintenance of the refineries across the country. In a motion by Ibrahim Isiaka (Ogun – APC) at the plenary on Tuesday, he queried the viability of further expenditure on the country’s four refineries and the daily allocation of 445,000 barrels of crude to the facilities as they perform poorly. “The House is cognisant that sums of $308 million, $57 million, $200 million, and lately, more than N264 billon were spent on refineries, yet it was reported that the NNPC is seeking $1.8 billion to carry out another TAM (Turn Around Maintenance) to make the refineries attractive to investors.” He added that the federal government’s efforts to bring in private investors to build refineries had not yielded the desired result. “Despite major paradigm shift and consideration of different reliefs, […]

Nigeria: Again, Militants Threaten Proposed Pandef Meeting in Warri

21 Nov 2017   Nigeria

The Reformed Niger Delta Avengers (RNDA), has again kicked against the proposed Tuesday meeting of the Pan Niger Delta Elder Forum (PANDEF) in Warri, Delta State, describing the meeting as a threat to the peace in the region. Security operatives had a few weeks back disrupted a similar meeting of PANDEF at Hotel Presidential, Port Harcourt, Rivers State, citing threat by the ex-militants to stop the meeting and resume bombing of critical infrastructure in the region. The RNDA, whose members the leader of PANDEF, Chief Edwin Clark, had always described as ‘ laptop militants’, reiterated the rejection and disbandment of the Clark led group, warning that if the Federal Government allows the meeting to hold, there would be a series of coordinated attacks on oil and gas pipelines. Led by John-Mark Ezonbi, the group said it arrived at the decision after a meeting held along the creeks […]

Nigeria: Militant Group Threatens Attack On SPDC Facilities

17 Nov 2017   Nigeria

Supreme Egbesu Tigers of Africa, a militant group in the Niger Delta region, yesterday, threatened to attack oil and gas facilities belonging to Shell Petroleum Development Company, SPDC, in Ekeremor Local Government Area of Bayelsa State, for allegedly neglecting the local content law in the state. The group, in a statement by its spokesperson, Mr. Ogoun Tensighan, also issued two weeks ultimatum to the company to involve the Amabuluo Federated Communities in its operational activities in the area, failure of which it would carry out its threat. Describing the attacks by the Niger Delta Avengers as “child’s play” compared to its planned attack, Tensighan said: “The silence of the group should not be taken for granted as we are determined to make the region uninhabitable for the oil company to operate. “We have watched with patience the impudence of some individuals from Egbemagalabri community to undermine the people of […]

Nigeria: Crude Oil Suffers Setback As More Traders Opt for U.S. Blend

17 Nov 2017   Nigeria

Nigeria’s crude oil is under serious pressure at the international market, as Asian refiners have increasingly been moving away from their usual favourite, frequently opting for United State (U.S) crude oil, the Organisation of the Petroleum Exporting Countries (OPEC) has said. Besides, Nigeria’s crude oil production declined by 54,200 barrels per day (bpd) from the 1.792bpd it recorded in September to 1.738 bpd in October. OPEC, which made this disclosure in its November monthly oil report yesterday, said Taiwan’s latest tender showed Asians’ more appetite for U.S. crude oil and this would eventually lead to overhang of Nigeria’s crude oil. It noted that differentials for Nigerian crude were also under pressure on low U.S. refining demand and with Chinese refiners increasingly switching their slate to use more U.S. crude over the last few months. OPEC disclosed that during the month under review, trade was limited and some tenders that […]

Another Group Joins Niger Delta Avengers’ Ceasefire Boycott

11 Nov 2017   Nigeria

Another militant group in the Niger Delta has vowed to break its truce against the Abuja government and restart attacks on oil and gas infrastructure in the area, according to a report by Vanguard on Friday . A spokesperson from the Niger Delta Revolutionary Crusaders ordered workers on floating production storage and offloading facilities on or near Agbami, Akpo, Usan, Erna, Abo, Yoho, Unity and Benga to evacuate the area. Other platforms operated by Chevron, Total, Mobil, Shell and Agip are also under threat, the note said, adding that the workers’ safety “can no longer be guaranteed by the gods of the rivers and land.” Another group, The Niger Delta Avengers, announced its plan to rescind its participation in the ceasefire last week, with the following threatening statement: “Our next line of operation will not be like the 2016 campaign which we operated successfully without any casualties; this outing […]

Nigeria’s Bonny Light crude at 3-month high on steadier exports

11 Nov 2017   Nigeria

Nigeria’s Bonny Light crude has seen its price rise to its highest levels since February, as the grade began to trade in a more regular fashion in the spot market following several months of disruption due to loading delays and forces majeures. S&P Global Platts on Thursday assessed Bonny Light at a premium of 60 cents/b versus the West Africa Dated strip. The grade last hit this value mid-August and was last higher February 21, when it was assessed at 65 cents/b. Bonny Light differentials have been depressed compared with other Nigerian crudes over the course of 2017, which traders have attributed to the unreliability factor of the grade. Terminal Operator Shell has declared force majeure on Bonny Light loadings three times in 2017, the most recent being between September 16-October 19. As a result, typical buyers of Bonny Light have moved to other grades. Similar grade Qua Iboe […]

Nigeria: Another Militant Group Shelves Ceasefire in Niger Delta

10 Nov 2017   Nigeria

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Nigeria: Govt, Delta Appeal to Avengers for Patience

8 Nov 2017   Nigeria

The federal and the Delta State governments Monday appealed to the Niger Delta Avengers (NDA) to put paid to its threat at the weekend to resume hostilities in the oil-rich region, admitting that their demands were in tandem with the development plans for the region. Making this appeal at the State House, Abuja, after a meeting with President Muhammadu Buhari, the Minister of Niger Delta, Mr. Usani Uguru, said the federal government is committed to the development of the region, citing a recent presidential directive for the take-off of the Maritime University, Okerenkoko, with N5 billion as one of such commitments. His appeal came just as the British Foreign and Commonwealth Office (FCO) confirmed Monday that one of the British hostages, Mr. Ian Squire, who was kidnapped last month in Delta State, has been killed and three others freed. Squire was one of four Britons abducted by suspected militants […]

Nigeria supports OPEC cut extension under ‘the right terms’

7 Nov 2017   Nigeria, OPEC

Nigeria supports an extension of a deal between OPEC, Russia and other non-members to cut oil supply until the end of 2018 “as long as the right terms are on the table” regarding its own participation, its oil minister said. Nigeria’s Minister of State for Petroleum Emmanuel Ibe Kachikwu talks about an OPEC cut extension during an intrerview with Reuters in Abuja, Nigeria November 6, 2017. REUTERS/Afolabi Sotunde He said there is growing agreement among other members of the Organization of the Petroleum Exporting Countries to extend the deal. Sponsored “There isn’t any reason to change what is a winning formula,” oil minister Emmanuel Ibe Kachikwu told Reuters, adding “there is a consensus to extend. The issue will be the duration.” Nigeria itself, however, is exempt from the deal. OPEC, along with Russia and nine other producers agreed to cut oil output by about 1.8 million […]

There will be blood, Nigerian militant group warns

4 Nov 2017   Nigeria

To the international oil companies working in the Niger Delta region of Nigeria, a militant cease-fire is officially over, the Niger Delta Avengers said Friday. “Our next line of operation will not be like the 2016 campaign which we operated successfully without any casualties,” spokesman Murdoch Agbinibo said in a statement . “This outing will be brutish, brutal and bloody.” It’s been nearly a year to the day since the group took credit for an attack on oil infrastructure in the Niger Delta region. The last time it took credit for an attack of note was during the second week of November 2016 when it said its rebel forces attacked an export pipeline controlled in […]

Decent labor figures, Nigerian oil threats, boost oil prices

4 Nov 2017   Nigeria

 Steady improvements in the U.S. labor market, coupled with militant threats against a major OPEC producer, helped support a soft rally in oil prices Friday. The U.S. Labor Department reported Friday that total non-farm payrolls jumped 261,000 last month, with food services and restaurant employment offsetting any of the declines that came as a result of Hurricanes Irma and Harvey. That beats the estimate early this week from payroll processor ADP, which reported private-sector employment increased by 235,000 from September to October The federal government added that those employed part-time because of economic reasons declined by 369,000 in October, another indication of post-hurricane resilience. More jobs means growing demand for energy products, something traders are watching for in oil […]

Nigeria’s ‘Delta Avengers’ militants end oil hub ceasefire

4 Nov 2017   Nigeria

A Nigerian militant group whose attacks on energy facilities in the Niger Delta last year helped push Africa’s biggest economy into recession said on Friday it had ended its ceasefire. The Niger Delta Avengers announced a halt to hostilities in August 2016, although they carried out attacks in October and November last year. “Niger Delta Avenger’s ceasefire on Operation Red Economy is officially over,” the group said on its website ( ). “Our next line of operation will not be like the 2016 campaign which we operated successfully without any casualties; this outing will be brutish, brutal and bloody,” it said in a section of its statement addressed to oil companies. The move threatens Nigeria’s fragile economic growth and poses […]

Nigeria: Judge Throws Out Diezani’s Application to Facilitate Her Return From UK

2 Nov 2017   Nigeria

A Lagos Federal High Court has dismissed an application filed by Diezani Alison-Madueke, former Minister of Petroleum Resources, that she be joined as a defendant in an alleged N450m fraud case in Nigeria. The judge, Justice Rilwan Aikawaon, Wednesday rejected her application which he said was bizarre and misuse of court processes, stressing that he would not allow himself to be used to frustrate Diezani’s imminent trial in the United Kingdom, where she currently under investigation and on bail. Alison-Madueke, who is currently in London where she is being investigated for money laundering, is seeking an opportunity to defend the allegations in a charge filed against her, Mohammed Belgore, SAN, and a former Minister of National Planning, Abubakar Sulaiman. The Economic and Financial Crimes Commission (EFCC) on Monday opposed the application filed by Diezani Alison-Madueke, seeking to be joined as a defendant in a N450m fraud charge before Justice […]

Nigeria: Oil Spill Victims Sue Shell in UK Over Alleged $3.6 Bn Compensation

1 Nov 2017   Nigeria

Oil spill victims under the aegis of Oil Spill Victims Vanguard (OSPIVV) have initiated a lawsuit in the United Kingdom against Shell Nigeria Exploration and Production Company (SNEPCO), a subsidiary of the Royal-Dutch Shell Plc., over alleged $3, 600,191, 206 compensation to 168,000 persons and 350 communities affected by the December 20, 2011 spill from its Bonga Oil Field in Delta State. The group’s Executive Director, Harrison Jalla in a statement, said the move was to ensure accelerated hearing and justice. He said: “We have filed a pre-action notice on September 21, 2017 in the TCC High Court of Justice in London through our lawyers, Johnson & Steller Solicitors of Handover Square, Mayfair on behalf of the victims and communities affected by the Bonga Oil Field spills of December 20, 2011 when Shell Nigeria Exploration and Product Company (SNEPCO), due to equipment failure in their Bonga Oil […]

Nigeria: 26 Firms Bid to Overhaul Nigeria’s Refineries – Govt

26 Oct 2017   Nigeria

The Nigerian government has disclosed that 26 firms have shown interest in the plan to overhaul the nation’s oil refineries. The Minister of State for Petroleum Resources, Ibe Kachikwu, made this known at an oil conference in Cape Town on Tuesday. Mr. Kachikwu said the 26 firms had indicated their interest in the project that will require investment of $2 billion. He explained further that Nigeria was close to finalising the process for the overhaul of the three existing refineries, adding 450,000 bpd as part of the effort by Africa’s biggest economy to reduce its reliance on imports. “We are almost at a threshold of finalising the process of selection,” he said, adding that it could announce its selection by January or February. Similarly, the minister said that the Dangote Refinery with capacity to process 650,000 barrels per day (bpd) of oil being built in Nigeria is due to […]

Nigeria: Oil Spills Lead to Increased Newborn Mortality in the Niger Delta

24 Oct 2017   Nigeria

Researchers from the University of Sankt Gallen have found that neonatal mortality rises if a child’s mother lives close to an oil spill before conception. Niger Delta resident Annkio Briggs still remembers the days when she could simply draw water from her family’s well without having to worry about it being contaminated. “I grew up drinking water from a well in my grandfather’s house. We just used to take a clean bucket, lift water up and drink it”, Briggs, now an environmental campaigner, told DW. “Nowadays the water is polluted. I cannot drink it anymore, although it is a natural source meant for me and my people”, the 65 year old said. He has since resorted to buying bottled water. Persistent spills in Nigeria’s oil producing region have not just contaminated water resources. Residents are also exposed to harmful chemicals found in crude oil through direct skin contact or […]

Shell Restarts Bonny Light Exports

21 Oct 2017   Nigeria

Shell Nigeria has lifted the latest force majeure off its Bonny Light exports, which was introduced a month ago after a leak was discovered in one of the two pipelines that carry the grade to the company’s Bonny export terminal. This was the latest in a string of force majeure events over the last year for the crude oil grade, prompted by either bombings of pipeline infrastructure or other issues such as vandalism and oil theft. The grade is widely used by European and American refineries, which makes Bonny Light an important source of revenues for Nigeria. Normally, Shell exports around 230,000 bpd of Bonny Light crude from the Bonny Island terminal. The repeated force majeures have disrupted the normal rate of operation of the terminal, and for now it remains unclear how much Bonny Light Shell’s Nigerian subsidiary will export in the next two months. The Bonny Light […]

Nigeria: Senate Partners Russian Oil Giants to Develop Nigeria’s Oil and Gas

21 Oct 2017   Nigeria

The Senate said on Thursday that it had began talks with Russian oil companies for partnership to develop Nigeria’s oil and gas sector. Disclosing this in an interview with newsmen in St. Petersburg, Russia, Chairman, Senate Committee on Oil and Gas, Sen. Bassey Akpan, said it was time Nigeria sought support to further develop the sector. Akpan is part of President of the Senate, Dr Bukola Saraki’s delegation to the 137th Inter-Parliamentary Union (IPU) Assembly in Russia, who met with the oil firms. “We came here as part of the delegation of the Senate to consult with the Russians as regards development of Nigerian oil and gas. “You are aware we are working on the Petroleum Industry Bill (PIB) and I can confirm to you that they are very much interested in partnering Nigeria as regards development of oil and gas. “One thing the visit has endeared in us […]

Nigeria: Shell Lifts Force Majeure On Bonny Light Exports

21 Oct 2017   Nigeria

Barely two days after Aiteo Eastern Exploration and Production Company announced the completion of repairs of the Nembe Creek Trunkline (NCTL), Shell Petroleum Development Company (SPDC) thursday lifted force majeure on exports of Bonny Light crude. The NCTL and the Trans-Niger Pipeline (TNP) are the two major pipelines used by SPDC and some other producing companies to evacuate crude from the eastern Niger Delta to the Bonny export terminal. The 600,000 barrels per day capacity, 100-kiloemtre NCTL built by SPDC and inaugurated in 2010, was sold by the oil major to Aiteo in 2015 as part of the divestments of its onshore assets. But even though SPDC handed over the ownership and operatorship of the asset to the indigenous firm, the multinational company and other producers have continued to utilise the pipeline for crude evacuation. Shell had declared force majeure on Bonny exports a month ago after Aiteo shut […]

Nigeria: $3.8 Billion Egina FPSO Vessel to Arrive Nigeria Q1 2018

21 Oct 2017   Nigeria

The technical partner of the Lagos Deep Offshore Logistics Base (LADOL), in the building of $3.8 billion Egina oil production vessel at LADOL’s Free Zone, Samsung Heavy Industry (SHI), has said that the hull of the Floating Production Storage and Offloading (FPSO) being built in Korea, is expected to arrive in Lagos in the first quarter of next year. LADOL is currently playing host to the fabrication of a $3.8 billion oil and gas logistics service facility-FPSO rig, otherwise called the Egina project. The project, which has been described as first-of-its-kind in the Sub-Sahara Africa, is being built for Total Oil Exploration and Production Company, with LADOL acting as the local content partner. Giving an update on the project when a team from the Nigeria Immigration Service (NIS) led by Chapp Jumbo, comptroller Free Zone Enterprises of NIS and General Manager, Operations, Private Zones of the Nigeria Export Processing […]

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 […]