Kachikwu Deploys NNPC Staff to Fuel Stations for Monitoring

Kachikwu Deploys NNPC Staff to Fuel Stations for Monitoring Duty

 

 

 

 

In a bid to ensure the total eradication of queues from fuel stations across the country, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has ordered the deployment of NNPC staff to filling stations across the country for effective monitoring of the distribution system.

Speaking at an emergency meeting with senior staff of the corporation at the NNPC Towers, Dr. Kachikwu said though there were a number of challenges in the supply and distribution system that hamper efficient distribution of products across the country, it was time for NNPC to rise above the challenges by ensuring that the special intervention supplies are not diverted or hoarded.

“This calls for effective monitoring of the supply system, especially at the end points, to ascertain that what is trucked out from the depots is delivered at the designated fuel stations and dispensed to the public in the most efficient manner. We need you to be out there to help achieve this; we can’t be at ease while Nigerians are going through so much pain to get fuel”, Dr. Kachikwu stated.

He challenged staff to volunteer for the monitoring exercise, adding that standing up to provide creative solutions to challenges was what the new NNPC is all about.

The Minister urged the staff to work towards achieving zero-queues at their respective stations as soon as possible, adding that they should be ready to sacrifice their Christmas break if need be.

Also speaking at the emergency meeting, the Group Executive Director, Commercial& Investment, Dr. Victor Adeniran, called on staff on monitoring duties to work closely with the Rapid Response Team by reporting any situation that needs urgent intervention such as low stock, delayed arrival of trucks or any underhand dealing.

Explaining further, Dr. Adeniran said the Rapid Response Team is made up of PPMC staff and representatives of law enforcement agencies that can adequately handle any challenge, adding that so far, about 200 trucks of the special intervention stock have arrived Abuja.

He called on the staff deployed for monitoring duties to be vigilant and ensure that all the petrol designated for their respective stations is delivered and dispensed to members of the public in a most efficient manner.

  

Meanwhile, in continuation of the special intervention fuel supply for the Yuletide season, another 567 trucks have been dispatched nationwide today. 

Shell, BG Shareholders To Vote On Merger In January

Shell, BG Shareholders To Vote On Merger In January

 

 

 

 

 

 

Shell and BG Group shareholders are expected to vote on the merger of the two companies on Jan. 27 and 28, respectively.

  Royal Dutch Shell and BG Group shareholders are expected to vote on the merger of the two companies on Jan. 27 and 28, respectively, the firms said on Monday.

Shareholder approval is the final remaining hurdle to clear Shell's takeover of its smaller rival, one of the largest energy deals in a decade that will create the world's most powerful liquefied natural gas (LNG) trader.

Worth $70 billion at the time of the offer in April, it is worth about $53 billion at current market valuations.

BG asked Britain's High Court on Monday for approval to publish its scheme document and to convene the shareholder meetings, the companies said.

Court approval is expected on Tuesday, the companies said, followed by the publication of BG's scheme document and the Shell shareholder prospectus.

Following shareholder approval, the delisting of an acquired company's shares typically takes around 10 working days. This means Shell's takeover of BG could complete in mid-February.

Tullow Oil Discovers Oil at Etom-2 Well in Northern Kenya

Tullow Oil Discovers Oil at Etom-2 Well in Northern Kenya

Tullow Oil plc announced Tuesday that the Etom-2 well in Block 13T, Northern Kenya, has encountered 334 feet of net oil pay in two columns.

Drilled by the PR Marriott 46 rig to a final depth of 5,429 feet, the well’s objective was to explore the Etom structure in an untested fault block identified by recent 3D seismic. Oil samples, sidewall cores and wire line logging all indicate the presence of high API oil in the best quality reservoir encountered in the South Lokichar Basin to date, according to a Tullow statement. Additional prospectivity identified on the 3D seismic in the north of the basin, including the Erut and Elim prospects, will now be considered as part of a future exploration drilling program.

Angus McCoss, Tullow Oil plc exploration director, commented in a company statement: “We are delighted with the Etom-2 well which encountered over 328 feet of net oil play in the best reservoirs in the basin so far. Discovering this thick interval of high quality oil reservoirs further underpins our development options and resource base. The result follows careful evaluation of 3D seismic data which was shot after the Etom-1 well and demonstrates how we have improved our understanding of the South Lokichar Basin. This result also suggests significant potential in this underexplored part of the block as it is the most northerly well we have drilled in South Lokichar and is located close to the axis of the basin away from the basin-bounding fault. Accordingly, we will review the potential of the greater Etom area and neighbouring prospects to decide on our forward program.”

The PR Marriott 46 rig will now move to Block 12A where it will spud the Cheptuket-1 well around year end. This will be the first well to be drilled in the Kerio Valley Basin. Tullow operates block 13T with 50 percent equity interest and is partnered by Africa Oil Corporation, which holds the remaining 50 percent interest.

NNPC sings Of Supplies As Scarcity Goes Acute

NNPC Sings Of Supplies As Scarcity Goes Acute

Nigerian National Petroleum Corporation (NNPC) has since weekend been announcing same old measures that failed to address fuel supply concerns, saying it has directed both the Petroleum Products Pricing and Regulatory Agency (PPPRA) and Pipeline and Products Marketing Company (PPMC) to release more fuel to the market.

However, the question remains whether the corporation had deliberately been withholding supplies to the market.

It appears that the corporation is totally out of wits and the new Petroleum Minister, Dr. Ibe Kachikwu, has been riding on familiar rhetoric in playing to the gallery.

For over two months now, Dr. Kachikwu who has been boastful of his silver touch in making the corporation deliver on its key mandates of fuelling economic and social growth of the country has been churning out more press releases than fuel in an apparent confusion about what next measure to take.

From daily truck out figures which revealed concentration of supplies to the north of the country to lame directives on incapacitated refineries, PPMC and PPPRA, Dr. Kachuikwu has been desperate to impress angry Nigerians who have been bearing protracted brunt of the government’s inability to close widening supply gaps in the market.

For the umpteenth time, Dr. Kachikwu weekend directed PPMC and PPPRA to embark on renewed special supply intervention measures to ensure a country-wide availability of petroleum products ahead of the forthcoming yuletide and beyond.

But PPPRA is not a supply factor in the market while PPMC appears to have exhausted its capacity to intervene in the worsening supply situation.

Private marketers that account for market wetness have chorused the need for government to address fiscal issues like foreign exchange scarcity, falling Naira value and debt overhang in the subsidy mechanism.

But NNPC in a stated that the special supply intervention mechanism is limited to truck out from existing stock located in places remote from the market.

It however added that it is consolidating strategic alliance with some major depot owners and oil marketers with strong regional logistics to ensure maximum outreach of products in the hinterland ahead of the Christmas and New year festivities. 

While calling on members of the public to refrain from hoarding, product diversion and panic buying of petrol, the corporation noted that the intervention measure would help circumvent the challenges posed by the unavailability of pipelines for the transportation of petroleum products.

It noted that product diversion is an economic crime and warned that it will not hesitate to report offenders to the security agencies for prosecution.  

 

NNPC/SNEPCo showers gifts on Innercity pupils

 

 

 

 

The General Manager, Offshore Assets of the Shell Nigeria Exploration and Production Company Limited (SNEPCo), Mr. Effy Okon, in a dance with pupils of the Innercity Mission School, Ikeja, Lagos, at the SNEPCo-sponsored 2015 Christmas party... on Monday.

 

 

 

NNPC/SNEPCo showers gifts on school children at end of year party pupils of the Innercity Mission School, Lagos were proud hosts of a Christmas party organised by Shell Nigeria Exploration and Production Company (SNEPCo) on Monday (Dec 14).  In keeping with the mood of the Yuletide, the pupils and the school received a variety of gifts including school bags, book shelves, television sets and audio visual aids.

“We do this every year to bring smiles to the faces of the less-privileged and to send the message of hope to Nigerians,” said SNEPCo Managing Director, Bayo Ojulari, who was represented at the event by the company’s General Manager, Offshore Assets, Effy Okon. He added, “Our choice of the Innercity Mission School is in appreciation of the shared values between the mission and SNEPCo. We remain committed to working with our senior partner, the Nigeria National Petroleum Corporation (NNPC) and co-venturers, to provide opportunities to Nigerians who otherwise would be out of school and thus deprived of developing their full potential that may significantly benefit society.”

Director of the mission, Victor Aregbe, described the “relentless support from NNPC and SNEPCo” as exemplary. He recalled that the school’s ICT centre and well-equipped library donated by the NNPC/SNEPCo had transformed learning in the school. The Innercity Mission School is a charity initiative of the Innercity Mission for Children. The school, with the support of partners and donors, provides nursery and primary education to indigent children free of any charges including the provision of school uniforms, educational supplies, breakfast, lunch and transportation to and from the school.

SNEPCo is the offshore subsidiary of Shell in Nigeria and operates the Bonga floating, production, storage and offloading vessel as contractor under a production sharing contract with the NNPC, which holds the lease for OML 118. SNEPCo holds a 55% contractor interest of the OML. The other co-venturers are Esso Exploration & Production Nigeria Ltd (20%), Total E&P Nigeria Ltd (12.5%), and Nigerian Agip Exploration Ltd (12.5%).

Twenty-One Firms win Nigeria 2016 crude oil term contracts

 

 

Twenty-One Firms win Nigeria 2016 crude oil term contracts

Despite the highly hyped reforms in Nigeria’s oil export term contracts, Nigerian National Petroleum Corporation Thursday rolled out a new list of traders that would lift the country’s crude oil for sale in the international market in 2016.

The list nearly invalidates the claims by the corporation that is weeding out middlemen from the export programme and deal mainly with refiners and their representatives.

According to a statement from the spokesman of NNPC, Mr. Ohi Algebe, the beneficiaries of the term contracts are divided into five categories comprising refiners, foreign traders and indigenous traders. It also waters down the Nigerian Content value of the crude lifting business by conceding over 60 percent of the total volumes to foreign entities.

Before now, government had used crude lifting contracts to groom indigenous companies to participate in the lucrative crude oil export market by reserving substantial volumes of the commodity for local traders some of whom partner with foreign multinational traders in order to learn the trade routes and tricks.

However, the list rolled out by NNPC saw France's oil giant Total and international trading firms Trafigura and Vitol in the front line of the 21 companies handed crude oil term lifting contracts for 2016.

Other beneficiaries include India National Oil Company, Emirates National Oil Company, the trading arms of Shell and ExxonMobil, and indigenous trader Sahara Energy.

Mr. Alegbe said the term contracts were distributed in five categories -- international refineries, international oil traders, indigenous oil trading companies, affiliates of International Oil Companies, and downstream operators.

The current list compared with 46 companies handed contracts for the 2015 period, which expired in May.

But it was much bigger than a pruned down list of 16 that NNPC Chief Executive Emmanuel Kachikwu envisaged in August in a bid to instill transparency and probity in the award of contracts and the management of the country's oil resources.

NNPC said in August it would only consider companies for the lucrative contracts that showed proof of business integrity and were ready to sign an undertaking to comply strictly with Nigerian anti-corruption laws.

The 991,661 b/d of various Nigerian crude grades on offer this time around, which is about 47.2% of the country's current production of 2.1 million b/d, is also lower than the export of around 1.17 million b/d in previous contracts, reflecting the drop in the country's oil output.

A breakdown of the 2015/2016 crude oil term contract off-takers for the 991, 661 bpd Nigerian equity crude indicate that 240, 000 bpd representing 24 percent of the total volume on offer is awarded to four Refiners classified as major current receivers of Nigerian Crude with capacity to process all of Nigerian crude grades. The Off-takers in this category include: Emirates National Oil Coy, ENOC, Indian Oil Corporation, CEPSA Refinery Madrid and Sara SPA Refinery. Each of the Off-takers in this category was awarded 60, 000 bpd. 

Three notable International Trading Companies, namely Trafigura PT Ltd, Mercuria Energy Trading SA and Vitol SA won the bid for the lifting of 32, 000 bpd of crude based on their pedigree as large scale buyers of Nigerian Crude with structure for short term freight intervention and storage. The off-takers in this category represent about 10 percent of total crude volume on offer.

Trading Affiliates of International Oil Companies consisting of ENI Trading and Shipping SPA, TOTSA Total Oil Trading SA, Exxon Sale and Supply LLC and Shell Western Supply and Trading received term allocation of 32, 000 bpd each totaling 128, 000 bpd representing about 13 percent of total volume of crude oil on offer.

Nigerian downstream players with wide experience in crude trading and large asset base accounts for 405, 000 bpd representing about 41 percent of total crude volume on offer. In this category, Emo Oil & Petrochemical Coy/China Zhenhea- an NNPC long term trader is allocated 45, 000 bpd. Other off-takers in this category include: Northwest Petroleum and Gas Ltd, 45, 000 bpd,  Forte Oil, 45, 000 bpd, Oando PLC, 60, 000 bpd, Sahara Energy Resource Ltd, 60, 000 bpd,  A.A. Rano Nig. Ltd, 45, 000 bpd, Eterna Oil, 45, 000 bpd and MRS Oil &Gas Coy Ltd 60, 000 bpd.

NNPC Trading Companies Calson/Hyson 32, 000 bpd and Duke Oil Incorporated 90, 000 bpd account for combined off-take of 122, 000 bpd representing about 12 percent of total volume on offer.

Apart from ensuring transparency, the companies were carefully chosen based on their track records and trading experience to ensure that Nigerian crude cargoes are not left unsold.

 

 

 

 

 

 

 

Petroleum Players Crown Okwuosa Leader

 Petroleum Players Crown Okwuosa Leader

Sopuruchi Onwuka

It is an unusual event for the different spectrums of the Nigerian petroleum industry to pool together and confer awards to highly distinguished professionals that stand out with tall achievements. It becomes even more remarkable for one man to stand out with an award so highly coveted and regarded as a mark of exceptional accomplishments.

The 2015 Award Dinner hosted on the platform of Petroleum Technology Association of Nigeria  (PETAN) on the 3rd of December, provided the forum for all industry groups including the Society of Petroleum Engineers (SPE), Nigerian Association of Petroleum Explorationists (NAPE), Nigerian Mining and Geosciences Society (NMGS), Nigerian Gas Association (NGA) and Nigerian Association of Indigenous Petroleum Companies (NAIPEC) to jointly applaud the rising industry profile of the Executive Chairman of Oilserv Limited Group, Engr. Chukwuemeka Obiora Okwuosa.

It was the first time, pan industry groups in the petroleum sector supported the hands of PETAN in such a grand manner, in applauding the sacrifices and contributions of indigenous veterans, players and institutions that have advanced growth and development technology, best practices, expertise and excellence.

In the various categories, medals and several accolades, were bestowed on the top shelf of the Nigerian petroleum industry stalwarts that have left footprints of gold behind them. Eminent personalities that underscore the stature of those celebrated include Late Dr. Rilwanu Lukman who received a post humous award; former Presidential Adviser on Petroleum Resources, Dr Emmanuel Egbogah; former Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Dr. Gaius Obaseki; fromer Group Executive Director of NNPC, Alhaji Sanni Bello; former Country Chair of Shell Companies in Nigeria, Mr. Mutiu Sunmonu; and Mrs Callista Azogu.

Other notable awardees included oil industry business icons Shawley Coker, Pedro Egbe, Steven Aribeana, Sam Adegboyega, Dr Diran Fawibe, Charles Ngoka and Ugo Ralph Ekezie.

Also, institutions whose contributions were appreciated with respect and gratitude of the industry include Shell Petroleum Development Company (SPDC), Neconde Limited and First bank PLC. They were honored for their significant advancement of the development of the Nigerian oil industry in 2015.

For a number of obvious reasons, the Lifetime Achievement Award established Mr. Emeka Okwuosa, eminent industry engineer, multiple investor and business leader as the primus inter peres who tests the waters, pushes back frontiers and provides growth models for peers and competitors. He leads innovation among indigenous firms in the industry; he justifies patronage for his groups through demonstration of robust capacity to deliver on toughest industry mandates; and wrestles jobs from where angels fear thread!

The citation of Mr. Okwuosa is a short history of long achievements which were delivered in quick succession, amplifying the business acumen and professional dexterity with which he built a cluster of companies that form the Oilserv Group.

With over 33 years of engineering experience in full industry service loop, teaching, project management, business administration, Mr. Okwuosa has also traversed the global petroleum plays and accumulated variegated experiences in different challenging terrains of the world’s continents.

He flew Nigeria’s flag with professional competence while in the services of Schlumberger where he functioned in different positions: from Field Engineer to Technical Manager the company’s operations in Europe, Asia and Africa.

It is with the rich wealth of experience, blend of global technologies and innate passion for excellence that Mr. Okwuosa established and developed the Oilserv Limited to localise and domesticate global industry technology and expertise for in-country execution of petroleum industry jobs in Nigeria.

Oilserv Limited Group comes with wide range of technical services that include engineering, procurement, construction (EPC) and maintenance of pipelines and facilities in the most challenging of terrains - the Niger Delta. The company has today become a major pipeline development factor in the country, region, and continent.

The company is also the key project driver in realization of Nigeria’s new gas infrastructure development under the ambitious Nigerian Gas Masterplan evolved to optimise the economic gains of the country’s vast natural gas resources. Oilserv also holds sway in other petroleum industry regions across Africa.

The company’s ISO 9001:2008 certification is a clear testimony of its compliance to most stringent global quality standards and operation efficiency.

Also riding on similar global certification for high standards and efficiency, Frazimex Limited, also established by Mr. Emeka Okwuosa, is in the fray with high end quality services in Front End and Detailed Engineering Design Services. The company takes the services scope further to cover new areas like civil engineering, electrical services, instrumentation and related activities.

With a full chain of total petroleum industry services in his service package, it is therefore only logical for Mr. Okwuosa to venture into oil and gas exploration and production with the establishment of Frazoil E&P Limited. And despite its relatively young age among competitors, Frazoil already operates Blocks 1 and 3 Offshore in the Republic of Benin, with the platform  and clout of a regional player.

Still under the banner of Oilserv  Limited Group, Mr. Okwuosa also floated the FrazPower Limited to capture the commercial opportunities in the fast developing gas-to-power markets that currently sweep across Africa; thus contributing to economic growth of the continent where natural gas is being positioned to drive quantum leap in power generation and bridge huge generation gaps that stall economic development.

“The strategic vision is to deliver at least 10 trillion cubic feet (TCF) of gas reserves in the next 10 years leveraging sources at varying level of go-to-market readiness,” FrazPower pledges. And the company is already providing distributed power solutions to captive markets in some industrial clusters in the South East part of the country, leveraging on micro gas liquefaction and compression technologies. The virtual pipeline solutions have since enhanced capacity utilization at the industries by introducing smart gas delivery solutions for power generation.

Ekcel Farms Limited is one of the newest of the companies floated by Mr. Emeka Okwuosa to demonstrate that commercial opportunities abound even in spite of the acute infrastructure and facility deficits in our domestic economy.

With initial $150 million in pocket, 5000 hectares of land and estimated workforce of 2000, Ekcel Farms flaunts the potentials to become a key economic growth driver and major contributor to the nation’s gross domestic product with its mechanized industrial farms which targets the high value ends of cassava and tomato production. 

Crown Energy Resources Limited which positions for solid mineral extraction with a modern quarry in Cross River State, is yet another offshoot of the growing Oilserve empire. The company delves into the exploitation of rock deposits for roads and sundry construction activities.

Therefore, the conglomeration of Oilserv Limited, Frazimex Limited, Frazoil Limited, FrazPower Limited, Ekcel Farms Limited and Crown Energy Resources Limited in one integrated business model with enhanced internal synergy and optimised economies of scale has unleashed efficiencies and leveraged collective potentials that established Oilserv Group as a leading indigenous energy factor; an economic power centre in its own right.

Mr. Okwuosa’s Oilserv Group has altered traditional stereotype of substandard products and low quality services that formed the incubus weighing down indigenous companies in the past decades when foreign oil companies held sway in the service segment of the industry value chain.

With above companies in the group, Mr. Okwuosa may have found expression to his passion for indigenous human capacity development in high technology areas of the petroleum industry. Through the group’s Graduate Training Programmes, Mr. Okwuosa offers young Nigerian graduates the rare and exclusive opportunity for hands-on training and exposure in oil and gas industry operations.

He is part of the powerful industry pressure group which influenced the evolution of the Nigerian Content Law in the petroleum industry with the aim to recover a level of control of the nation’s petroleum industry operations from the hands of fleeting - interest multinationals.

Nigerian Content policy objectives include, among others; to arrest traditional export of Nigerian petroleum industry jobs for execution in foreign countries. The law therefore aims to reverse the trend in a strategy that dissolves the huge oil and gas industry budget to reinvigorate activities in the business sectors of the domestic economy.

Mr. Okwuosa has consistently maintained that building local capacity for petroleum industry operations is of strategic security and economic importance for sustainable development of the country.

Thus while the graduate training programme targeted at building graduate capacity for project management, planning and control, operations and maintenance, quality assurance and control as well as other critical service packages, the related skills acquisition programme of Oilserv Group targets technical capacity for welding, fitting and other skills for sundry field activities.

With huge investments in the petroleum industry and ancillary sectors, Engr. Okwuosa boasts of lofty industry profile having earned a wealth of experience across the global industry terrains while working with multinational industry technology developers where he had marked out himself as an outstanding talent with restless aspiration to do something different.

Mr Okwuosa’s towering industry profile which compelled protracted applause from the crowd is supported by solid education from a selection of the world’s best institutions, ensuring sound knowledge and full mastery of industry operations. He continues to make contributions to the development of engineering and technical professions in the country through membership of numerous bodies, such as; Professional Well Log Analysts (PWLA); Petroleum Technology Association of Nigeria (PETAN); Pipeline Professionals Association of Nigeria (PPAN); Nigerian Institute of Directors (IoD); Society of Petroleum Engineers International (SPEI); and Nigerian Society of Engineers (NSE).

Mr. Okwuosa is not new to industry awards and recognition. His footprints and accomplishments in the industry have in the past earned him innumerable awards.  They include; Award of Excellence by the Department of Physics, University of Nigeria (UNN, 2006); Annual OTC/PETAN Awards for Excellence 2009, 2010, 2011, 2012, 2013, 2014 and 2015; US/African International Oil and Gas Leadership Award, Best of Africa 2013; Keyman Award by the Enugu Chamber of Commerce, Industry Mines and Agriculture (ECCIMA, 2014); Best CEO of the Year 2013; Best CSR Practice 2013; and Award of Excellence (Nanotechnology) (UNN, 2014) among others.

Mr. Okwuosa also garnered other awards which include: PETAN Oil and Gas Industry Achievement Award 2014; PETAN Distinguished Achievement Award 2014; and Fidelity Bank Distinguished Customer Award 2015.

Being an eminent Knight of Saint Christopher (KSC) of the Anglican Communion and Founder of Sir Chukwuemeka Okwuosa Foundation, he has also continued to positively impact his immediate and remote societies through scholarships, poverty alleviation programmes and limitless interventions in development of social facilities and infrastructure to enhance the people's quality of life.

It is clearly obvious that Mr. Emeka Okwuosa has a speedy flight to the heights of petroleum industry professionalism, and has maintained a frontline position, deepening the indigenous capacity for delivery of world’s toughest industry jobs in line with world class standards and best practices while remaining socially responsible.

It is therefore only rational and justified that his peers and colleagues in the industry salute and proclaim his many pioneer roles and outstanding contributions to the advancement of professional excellence, business best practices and audacious strides against challenging headwinds in recording and rewarding success.

It is on record that the Lifetime Achievement Award remains the most coveted honour to be conferred on any professional dead or alive in the Nigerian petroleum industry. It is not only all encompassing, it is at the instance of his colleagues, the very people most accurate in assessing him professionally. A Lifetime Achievement Award conferred on such an Industry leader at such a trying time,  symbolizes a resolute banding together of one and all, to encourage resilient in - house 'troopers' and 'striking forces' like Okwuosa to keep driving and pointing the way.

Indeed, the 2015 PETAN Lifetime Achievement Award establishes Mr. Emeka Okwuosa as one of Nigeria's oil and gas industry heroes.

FG Rules Out Fuel Price Reduction, Caps Price Band At N97/Barrel



Fuel Storage Tank Farm

 

FG Rules Out Fuel Price Reduction, Caps Price Band At N97/Barrel

Sopuruchi Onwuka

There will be no fuel price respite for Nigerians in 2016 as federal government yesterday declared that it would not reduce the retail price of petrol in the domestic market despite the 67 percent fall in the international prices of the product.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who hosted a media briefing in Abuja to deny fixing petrol price at N97 for 2016 clarified that a new price mechanism would roll into effect in 2016 to keep petrol retail price within a range between the current N87 per liter and N97 per liter.

The clarification came in response to reports attributing Dr. Kachikwu as stating that petrol prices would go up by 2016.

Following the reports players in the country’s domestic fuel market have quickly resorted to hoarding available stock with a target to make huge profits when prices go up in less than three weeks.

The situation has worsened fuel scarcity in the country and sparked off a spate of public outcry from various stakeholders against alleged planned price increase. Both marketing groups and labour leaders faulted the proposal as inconsonant with the prevailing price trends in the global fuel market.

According to USA Today, an American daily newspaper, prices gasoline in the country have slumped by 55 percent following fall in the prices of crude oil from about $120 per barrel last year to about $50 per barrel this month.

A team of analysts from Platts Market Intelligence Group that visited Nigeria recently had pointed out that inability of fuel price to come down from previous levels after crude oil prices plunged by over 60 percent is unusual and unsupported by market fundamentals.

Daily price templates by PPPRA puts expected open market price for petrol at N91 per liter, a figure independent market players dispute as too high.

In his clarification yesterday, Dr. Kachikwu said whereas N87 per liter will be the expected minimum retail price for the product in 2016, marketers will not be allowed to sell beyond N97 per liter.

Dr. Kachikwu who is also the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) noted that the discourse has long left the realm of subsidy removal to a more scientific price modulation approach which entails an elastic price mechanism that would follow international price trend.

According to him, the new price mechanism would be built into a new template to be evolved by the Petroleum Products Pricing and Regulatory Agency (PPPRA) to reflect the prevailing international price of crude.

He explained the new price modulation system would place a N97 per litre cap on the price of fuel to ensure that Nigerians are insulated from the vagaries of the global crude price.

`` I did not say that refined petroleum products will sell for N97 per litre next year. I said that between a band of N87 and N97 we are going to be looking at prices and today the prices are largely close to N87. So, there is no need to change the price.’’

The Minister said PPPRA would undertake quarterly review of the crude market situation.

 “I have not put a static figure. PPPRA will have to do the calculation to be able to announce what price of PMS will sell for in January; but we do not anticipate any major shift because of the price of crude today.’’ 

Meanwhile our survey of the market yesterday showed a very tight supply situation with few retail outlets that opened to customers contending with huge crowds of desperate motorists struggling to buy fuel.

Very few retail stations of both private marketers and NNPC opened for business while sharp market activities ruled transactions.

At places where independent marketers opened to customers, prices ranged from N100 per liter and N150 per liter depending on location. Some of the station managers also introduced different tolls at their forecourts before a customer was allowed in.

Nigeria Pumps 574 MMbbls In 9 Months

Nigeria Pumps 574 MMbbls In 9 Months

Nigeria pumped a total of 574.3 million barrels of crude oil and condensate in the first nine months of the year with indigenous players in the industry accounting for 32.825 million barrels, the lowest output among industry production groups.

The Nigerian National Petroleum Corporation’s (NNPC) Monthly Financial and Operations Report for October 2015 showed that independent and marginal oil fields’ operators as at the end of the third quarter, Q3, accounted for about 5.72 per cent of total crude oil and condensates production.

The financial statement also revealed that the independents/marginal fields operators produced 32.825 million barrels of crude oil and condensates in the nine-month period, compared to total production of 574.325 million barrels between January and September 2015.

Using an average oil price of $53.78 per barrel, as stipulated in the NNPC report, the 32.825 million barrels of crude oil and condensates produced by the independents/marginal fields operators translates to $1.765 billion, an equivalent of N353.07 billion.

In general, the report put total crude production in Nigeria in the nine-month period at 574.325 million barrels, an average of 2.1 million barrels per day, at an estimated value of $30.887 billion or N6.177 trillion.

In addition to the independents and marginal fields operators’ contribution, the production sharing companies, PSC, recorded the highest crude oil and condensates production during the review period, accounting for 239.623 million barrels or 41.72 per cent of total production.

 

The Joint Venture (JV) companies followed, accounting for 31.7 per cent of total crude oil production with 182.29 barrels of crude oil and condensates.

Alternative Finance followed this with 16.3 per cent or 93.569 million barrels, while the Nigerian Petroleum Development Company (NPDC) produced 26.017 million barrels representing 4.53 per cent of total production. On NPDC’s performance, the NNPC report said: “NPDC production is expected to hit production levels  of 250,000 barrel per day, after the completion of the ongoing NPDC re-kitting project.

Production from NPDC wholly operated assets amounted to 7.855 million barrels or 30 per cent of total production; with Okono Okpoho (OML 119) alone producing more than 79 per cent of the NPDC operated Assets or 24.08 per cent of the total NPDC production”.

Also on the NPDC operated JV assets, in which the company owns 55 per cent controlling interest, crude oil production amounted to 10.803 million barrels or 42 per cent of the NPDC total production while the JV assets not operated by NPDC, production level stood at 7.359 million barrels or 28 per cent of the company’s production.”

Oando Braces For Tough Growth Advancement

Oando Braces For Tough Growth Advancement

Sopuruchi Onwuka

Indigenous energy group, Oando Plc, has successfully recalibrated its strategies for continued growth advancements following financial turbulence associated with the global oil price fall that saw oil world’s strongest companies staggering to regain balance.

The company last week secured approval of its shareholders for strategic repositioning in the industry. The company plans to activate available fund raising measures to boost its cash flow, embark on accretive asset acquisition and drive a sharpened growth in specific business niches that offer best returns on invested funds.

From proposals presented to its shareholders at its Annual General Meeting (AGM) in Lagos, there are indications that Oando plans to change from an integrated energy group to a group of independent business affiliates with diversified ownership structure and broader corporate governance structure.

The new business model, apart from spreading risks and cutting overhead liabilities at a time of revenue downturn in the industry, appears targeted at standing the business arms of the company as independent competitors in their different fields of play and relieve them of encumbrances of integrated management.

The new business moves form the major responses of the group’s management to the revenue adversity that overwhelmed the industry following the acute fall in the prices of fuel commodities in the international market after investors sunk huge investments in asset acquisition and development.

The fall of international prices of crude oil and natural gas has compelled rebasing of all industry value projections and downgrading of asset values, a development that impacted the booked value of assets and financial projections of companies that span across the full industry business chain.

With the continued global economic downturn due to depressed oil prices, companies have taken proactive measures such as divestments, capex cuts, and suspension of projects to ensure profitability and returns for shareholders in this new reality of low oil prices.

The developments at Oando Plc is of special interest to the Nigerian investment community given the position of the company as the sign post of indigenous capacity growth across the full spectrum of the petroleum industry.

The company which sprouted from seed ideas from a team of dynamic young investment upstarts in the downstream end of the industry has since rapidly grown into a multinational energy factor with a diversification spread that has since established Oando as integrated energy group.

Oando PLC currently stands tall among its peers as Nigeria’s largest indigenous oil and gas company and integrated energy solutions provider with huge market influence across the West African region and equity interests in Nigeria, South Africa and Canada.

Going by numbers-including volumes of traded commodity, and financial value of assets and deals-Oando’s affiliates still maintain leadership in their different business niches in Nigeria. Oando Energy Resources stands Nigeria’s biggest oil and gas producer by equity; Oando Gas & Power leads in delivered volumes, diversified products and market coverage; Oando Marketing boasts of the biggest product volumes as well as the highest number of retail outlets among the major oil marketers in the country; Oando Energy Services commands control of some of the most sophisticated rigs in the country; while Oando Trading is the uncontested leader in domestic market supply.

The businesses of the affiliates of the Oando Group desirably and expectedly support a myriad of small ancillary businesses whose activities sum up to significant contribution to the nation’s gross domestic product (GDP).

Given the pioneer and leadership roles of Oando in the indigenous sphere of the Nigerian petroleum industry, it is therefore not outside the field of sound logic to see the business performance of the company as a critical gauge for the success of the highly celebrated Nigerian Content policy in the petroleum sector.

It is in the foreground of the Oando’s highly rated position in the industry that the company’s 2014 financial performance put investors, financial services providers and analysts on alert over the impact of the global oil price crash on the fate of corporate outfits that sunk fortunes in asset growth just before the prices came crashing.

Oando recorded debilitating losses following writedowns on booked asset values and financial projections which lost bases with alteration of revenue expectations from the market where plummeting prices shattered calculations that supported bullish investments.

But the management of the company has remained boldly unshaken, constantly reiterating that the company’s losses were primarily in asset value and not in cash, technically described as impairments.

While explaining that the key drivers for the company’s 2014 losses are asset impairments, the Group Chief Executive (GCE), Mr. Wale Tinubu, explained in a financial statement that “an impairment occurs when the current value of a company's assets are reduced or can no longer be recovered as a result of certain market conditions. The company’s impairments were largely caused by the global drop in oil prices.”

He clarified that “it is important to note that these impairments are not cash losses, but are reductions in the value of our assets.”

Consonant with the global market downturn, the company’s oil and gas reserves shed huge market value with the crash in crude oil prices. OEs’s drilling rigs also lost value as service rates and activities took a hit from the price depression.

Other policy, fiscal and transactional glitches in the domestic environment also imposed challenges that eroded the value of cash in transaction. Lingering government debts, depression of local currency and bad debts meant that the company also suffered additional losses unrelated to oil price fall.

Inevitably, the cumulative impact of challenging operating environment and market gloom on the company’s balance sheet was negative for the financial year; and the management has evolved new business models to advance against the headwinds.

During the AGM, Oando’s management presented a new business agenda to the shareholders, which primarily entails minor restructuring of the company to raise funds and strengthen the company against prevailing challenges.

In the new plan captured in the company’s 2015 to 2019 strategic objectives, Oando targets to increase production from current 55, 000 barrels of oil equivalents per day (55 kboepd) to 100 kbpd in the near term, and grow its proven and probable reserves from current 420.3 million barrels of oil equivalents (420.3 MMboe) to 500 million barrels of oil equivalent through organic growth, mergers and acquisitions.

Oando also plans to modify its oil services play through partial or full divestment of Oando Energy Services (OES) within the period and enter into strategic partnerships to jointly deploy deep-water and offshore rigs.

In the gas and power portfolio, Oando declares plans to expand its footprint through development of up to 300 megawatt (MW) grid based and embedded power projects, develop up to 100 million standard cubic feet per day (mmscfd) of compressed and liquefied natural gas (CNG & mini LNG) projects, build a 300 mmscfd gas processing plant, and expand gas pipeline footprint to 300 kilometres.

In the downstream, the company proposes to commission its Apapa Jetty which, it stated, will be Africa's first midstream jetty that will contribute significantly to the company's overall net profit through tolling fees.

The company’s management also plans to successfully conclude the partial divestment of its downstream business which in order to reposition Oando for renewed investment and profitability.

The company stated that the growth strategy would adapt to the extended period of lower oil prices through aggressive debt reduction, financing via partial divestments, and further diversification into the higher margin upstream.

“Additionally, by ensuring a reduced overhead at the group-level and to optimise performance, Oando seeks to drive focused, independent subsidiaries which can raise stand-alone capital to exploit clear market opportunities.” The company stated in briefing notes to journalists in Lagos.

Mr. Tinubu said: “The sale of 60% of our downstream business is in line with our strategic goals of placing our fundamental growth expectations in the Upstream, and the cash proceeds of the divestment will be utilized towards debt reduction to shore up our balance sheet in these challenging times. Our strategic focus is to increase our operational efficacy across our subsidiaries, deleverage our balance sheet, and return the company to profitability, whilst creating the necessary platform to be the partner of choice to the IOCs as they continue their divestment programmes.”

The company stated that it has continued to execute its strategic plan as outlined in previous years, successfully completing the first segment of the 10 km Greater Lagos Pipeline Ijora - Marina extension, and signed an agreement with an indigenous contractor for the nine kilometre extension of the CHGC pipeline in Port Harcourt.

The company has also signed agreements with General Electric, Nigeria to engage in various initiatives to develop power generation projects, Compressed Natural Gas facilities and mini Liquefied Natural Gas projects, aimed at aggressively expanding its gas footprint in Nigeria whilst remaining the gas provider of choice to consumers.

“The company steadily navigated the ups and downs of the cyclical oil & gas market by adapting quickly, recording key operational milestones and being fiscally innovative to enable its business operations run efficiently. This led to an 82% increase in 2P reserves from 230.6 MMboe to 420.3 MMboe and an 11 fold increase in production from 4,531 boe/day in H1 2014 to 55,399 boe/day in H1 2015,” according to the briefing notes.

Oando also reset its crude oil hedge floor price from an average of $95.35 per barrel to $65 per barrel. “This measure saved the company $65 million in interest payments over the remaining term of the loan facilities used in its landmark acquisition of ConocoPhillips Nigeria. The company also upsized $91 million of its senior secured facility from $215 Million to $306 Million, and repaid its $100 Million African Export-Import Bank subordinated loan facility, thus reducing its debt position from $900million as of July 2014 to $500million as of October 2015.  Looking to the future Oando’s E&P subsidiary is expected to contribute $150 million on an annual basis translating to expected dividends for shareholders once its debt portfolio is cleared.”

“Oando also completed the construction of the Island Jetty in Apapa, Lagos which will provide a more efficient platform for product receipt to all marketers and lead to higher margin volumes with an estimated $36 million expected annually in revenue and $120 million demurrage cost-savings for the sector per annum.”

With convincing plans and action strategies before them, the shareholders of the company overwhelmingly granted all the prayers of the management, thus clearing all hurdles for Mr. Tinubu and his team of business technocrats to advance realization of the company’s agenda under a new strategy designed to thaw through the current industry headwinds and deliver the objectives of sustainable value for all stakeholders.

 

Oil & Gas Groups Warn Govt Of Looming Economic Crisis

Oil & Gas Groups Warn Govt Of Looming Economic Crisis

...Point at depleting oil and gas reserves  

Sopuruchi Onwuka

Professional groups in the Nigerian Petroleum industry have advised the new administration of President Muhammdu Buhari to ensure robust consultations with players in the sector in order to evolve workable polices that would deliver on prime national aspirations.

The position follows calls by the groups on government to speedily stimulate exploration and production activities in the Nigerian petroleum industry in order to place the country on competitive reserves and production status with peer members in the Organization of Petroleum Exporting Countries (OPEC).

The calls were the central message at the 2015 industry dinner and awards night hosted by the Petroleum Technology Association of Nigeria (PETAN) in Lagos weekend where leaders of key professional groups took a common stand on the way forward for the Nigerian petroleum industry.

The event which rounded off meetings, conferences and other pan-industry forums that form platforms for policy debates pooled leaders of key industry groups including PETAN, Nigerian
Association of Indigenous Petroleum Companies (NAIPEC), Nigerian Association of Petroleum Explorationists (NAPE) and Society of Petroleum Engineers (SPE).

Whereas PETAN, the platform of indigenous oil service firms, and NAIPEC are beigest employers of indigenous oil industry workforce; SPE and NAPE house of over 85 percent of total industry core workforce comprising engineers and geologists working in both indigenous and multinational firms in Nigeria and elsewhere.

Chairman of PETAN, Mr. Emeka Ene, an eminent petroleum engineer, stated in his opening speech at the event that the nation’s crude oil reserves might not sustain realization of the country’s long term economic targets if urgent measures are not activated to boost exploration activities.

Mr. Ene who is also the erstwhile Chairman of the Nigerian Council of SPE said the low price cycle in the global oil market and consequent drop in cost of services in the industry have provided government the opportunity to drive exploration of more oil and gas across all the terrains in the Nigerian sedimentary basins.

In explaining that exploration is best at times of low price cycle, Mr. Ene who is the Managing Director of Oilserv Group, urged Nigerian to follow the steps of her peers in the Middle East and North Africa (MENA) where he pointed out that exploration rig counts have sharply risen since the fall in oil prices.

He pointed out that Nigeria’s long term economic aspirations are at stake in the current industry impasse where exploration investments have fallen, dragging down field activities and compelled redundancy and massive staff lay off across the industry.

In proffering most cost effective approach to driving realization of national aspirations in the petroleum industry, Mr. Ene declared that value added local content in the oil and gas industry is a guarantee of cost reduction.

He urged the government to provide solid basis for its medium to long term economic aspirations by pursuing realization of the set agenda to boost the nation’s crude oil reserves to 40 billion barrels, build production capacity to 4.0 million barrels per day, monetize the country’s vast natural gas resources and increase the local content of the industry activities.

The only way to continue driving the aspirations under the prevailing low price cycle in the industry, he said, is to optimize the use of indigenous and local capacity for job delivery.

In his keynote presentation at the dinner, erstwhile President of Nigerian Association of Petroleum Explorationists (NAPE), Mr. Austin Avuru, decried the low reserves status of the country saying that despite the highly advertised economic contributions of the petroleum industry, the sector has become a drag on the country’s gross domestic product (GDP).

Mr. Avuru, an eminent geologist who the Managing Director of Seplat Petroleum, blamed the direct impact of the oil price drop on the inability of the government to build sovereign wealth fund to buffer against sudden price shock in the export market.

He pointed out that whereas other OPEC countries are driving exploration activities with sovereign wealth funds despite the current low oil prices Nigeria has been plunged into deep cash crunch due to unavailability of no such funds.

The UNION reports that the sovereign wealth fund established by the previous administration of federal government was shared at the request and subsequent pressure from governors of the federating states of the country.

He corroborated Mr. Ene’s position that the medium to long term economic aspirations of o the country have become unrealistic because, according to him, little or no exploration activities in the industry means that the nation’s lean oil and gas reserves can no longer provide support for the much hyped economic projections.

He pointed at falling oil production from the traditional onshore and shallow water terrains from 2.4 million barrels per day to current 1.2 million barrels per day (mbd), explaining that production from the deepwater which could have increased the nation’s production has ended up only stabilising output at 2.4 mbd.

Mr. Avuru also drew attention to imminent gas crisis, saying that rising domestic gas demand means that the existing reserves could not support medium term demand projections.

Domestic gas demand, he said, has jumped from previous 300 million standard cubic feet per day (300 scf/d) to current 1.0 billion scf/d with projections that demand would balloon to 3.0 Bscf/d by 2017.

“The projected domestic gas demand is about four times more than what the country’s current estimated gas reserves can support,” he declared pointing at industry estimates that place the nation’s proven and probable gas reserves at 100 trillion cubic feet.

He blamed the unworkability of government policies on the collapse of industry-government interface, stressing that government has become increasingly unable to listen.

Mr. Avuru who is one of the pillars of NAIPEC stated that government has been formulating polices from the point of ignorance with national economic aspirations underpinned by unrealistic and untenable projections and aspirations for the petroleum industry.

He pointed out that policy makers have resorted to playing to gallery with popular catch phrases that are not underpinned by detailed planning.

In rolling out a pan-industry recommendation to government, Mr. Avuru demanded that government’s planning must derive from the outcomes of proper industry interaction, adding that industry groups must have regular and unfettered access to government.

He also pointed out that industry targets and programme executions must be focused on clear deliverables, enablers and expected objectives. He added that the processes of policy executions must be transparent, credible and clearly understood by all stakeholders for easy performance benchmarks.

He stressed that government must also see the industry as enablers of economic growth and not just as revenue earners. He said government must fully fund activities and re-inject vibrancy in the upstream petroleum industry in order to guarantee optimum rental income to the nation.

On the whole the groups warned government to map out plans to reactivate exploration activities in all domestic industry terrains, pointing out that gains of Nigerian Content Policy in the past years might be lost if investments in robust capacity development is left unutilized in driving realization of national aspirations in the oil and gas sector.