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Displaying items by tag: Nigeria Oil Production

Data from the US Energy Information Administration has shown that imports of crude oil by the United States from Nigeria has reached an all time low.
 
This is believed to be on account of the growing production of Shale oil in the US.
 
According to the data, the US slashed its import of Nigerian crude to 904,000 barrels and 1.74 million barrels in July and August respectively, down from 7.77 million barrels in June and a peak of 10.33 million barrels in February this year.
 
Similarly, total imports by the US of crude from Nigeria declined to 45.79 million barrels in the first half of this year from 55.78 million barrels in the same period last year.
 
Trade in Nigerian crude remained subdued on Thursday as a high volume of unsold cargoes kept buyers reluctant to step in, according to Reuters, while traders estimated that nearly a quarter of the December programme remained available.
 
Offers for Nigerian Qua Iboe and Bonny Light, two of the nation’s grades, hovered around $1.65 a barrel above dated Brent, down from $1.70 earlier last week.
 
It would recalled that the Director of the Department of Petroleum Resources, DPR, Mordecai Ladan, had last week lamented that Nigeria’s most valued crude oil customers have abandoned the country.
 
It was reported in September that the US Atlantic Coast imports of West African crude oil were expected to decline due to harsh arbitrage conditions made difficult by the large premium of ICE Brent futures over West Texas Intermediate, as well as strong premiums for WAF grades.
 
According to S&P Global Platts, Traders tracking these grades exported in the US expected WAF imports to the USAC to fall to virtually zero.
 
 
Source: The Ripples
Published in Business

Nigeria’s inflation rate is expected to rise to about 11.4 per cent for the rest of this year till mid-2019, the Central Bank of Nigeria has said.

The CBN Governor, Godwin Emefiel*e, disclosed this while speaking on Nigeria’s outlook and policy thrust for 2019.

He said, “Inflation expectations are rising on the backdrop of anticipated politically related liquidity injections. For the rest of 2018 and towards mid-2019, Nigeria’s rate of inflation is projected to rise slightly to about 11.4 per cent and then moderate thereafter.”

The consumer price index, which measures inflation decreased to 11.26 per cent (year-on-year) in October2018, according to latest report by the National Bureau of Statistics on its ‘CPI and inflation report October 2018’.

The statistics revealed that this was a 0.02 per cent points lower than the rate recorded in September 2018 (11.28 per cent).

While speaking on the exchange rate, he said that although the CBN had so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets were expected to continue to exert considerable pressure on market rates.

This pressure, he added, could be amplified by the forthcoming elections, especially as the political marketplace heats up.

He said notwithstanding those pressures, the CBN was determined to maintain its stable exchange rate policy stance over the next few months, given the relatively high level of reserves.

“Gross stability is projected in the foreign exchange market given increased oil-related inflows and contained import bill. I would like to make it categorically clear that sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves,” he said.

While speaking on the balance of payments, he said it was expected to remain positive in the short term, and that oil prices continue to recover, adding that it was expected that the current account balance would strengthen even further.

“This will be supported by improved non-oil performance as diversification efforts begin to yield results to reduce undue imports,” he added.

Emefiele also said that the apex bank would explore the possibility of leveraging technology to enhance credit to critical sectors of the economy, especially agriculture and manufacturing.

 

Source: Punch

Published in News Economy
Nigeria has lost its most valued crude oil buyers, even as its erstwhile gas customers are now competing with it, the Department of Petroleum Resources said on Monday.
 
The Director, DPR, Mr Mordecai Ladan, said the oil and gas industry seemed to be under a new threat, which he described as the renewed dislike and global war against fossil fuels and the quest for renewable and cleaner energy.
 
“Over the years, the threat against fossil fuels had always been on paper, but today, it is more real than ever, based on some clear evidence I like to draw our attention to,” he said at the 18th edition of the International HSE Biennial Conference on the Oil and Gas Industry in Nigeria.
 
He said three among the biggest technology companies, including Google and Apple, had made attempts at electric cars to replace petrol and diesel engines, with that of Tesla taking the world by surprise.
 
Ladan said, “Not only did the first two releases of Tesla outsell sales forecasts, they were actually oversubscribed, and the demand keeps rising while new models are being added. As we speak, some of the big international oil companies here seated are funding gigantic researches into alternative fuels, which include the use of cheap, common algae.
 
 
 
Source: PunchNg
Published in Business
Strengthening mechanism for increased internal revenue generation is critical to the expected increased revenue in the non-oil sector, Yue Man Lee, World Bank Senior Economist, has said.
 
Lee said this on Tuesday in a paper she presented at the ongoing 3-day National Council on Finance and Economic Development conference, holding in Kaduna.
 
The paper was entitled “Strengthening States Revenue Performance through Transparency and Open Government.’’
 
Lee observed that Nigeria’s revenues were very low due to contraction in oil revenues and the stagnancy in the non-oil revenues which she attributed to the absence of stable tax policy reforms and weak tax administration.
 
She said that with no improvement in revenue collection, total spending would decline; debt would increase while fiscal space would shrink.
 
The expert noted that the government could not deliver on its social and development agenda without it increasing total public spending.
 
According to her, the only mechanism to increase government expenditure in a sustainable way is to triple total revenue through mobilising non-oil revenue.
 
“However, Nigerian tax perception survey shows low tax compliance due to weak transparency and accountability.
 
“Corporate income tax is less than six per cent of registered taxpayers, personal income tax shrinks to two per cent, while compliance in the case of VAT varies between 15 and 40 per cent.
 
“This is worrisome because low tax compliance reduces states revenues and strengthening revenue and increasing expenditure efficiency needs to be underpinned by an increase in transparency and accountability.”
 
Lee, however, said that the Nigerian states could increase transparency and accountability to strengthen IGR through harmonisation of revenue collection and automation of tax payment.
 
“Kwara and Kaduna States are good example of states where such reforms were initiated with a significant increase in IGR,” she said.
 
Meanwhile, the Accountant-General of the Federation, Ahmed Idris, said that automated collection and management of non-oil revenue was critical to increasing its performance in revenue generation and sustenance.
 
 
(NAN)
 
Published in News Economy
The campaign group Global Witness has calculated the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget.
 
Eni and Shell are accused of knowing the money they paid to Nigeria would be used for bribes.
 
The Italian and Anglo-Dutch energy giants deny any wrongdoing.
 
This unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the FBI, a former President of Nigeria, as well as current and former senior executives at the two oil companies.
 
The former Nigerian oil minister, Dan Etete, was found guilty by a court in France of money laundering and it emerged he used illicit funds to buy a speed boat and a chateau. It is also claimed he had so much cash in $100 bills that it weighed five tonnes.
 
Shell is one of the oil firms facing corruption charges
Global Witness has spent years investigating the deal which gave Shell and Eni the rights to explore OPL 245, an offshore oil field in the Niger Delta.
 
It has commissioned new analysis of the way the contract was altered in favour of the energy companies and concluded Nigeria's losses over the lifetime of the project could amount to $5.86bn, compared to terms in place before 2011.
 
Oil giants face Nigeria 'corruption' trial
New evidence in Shell corruption probe
The analysis was carried out by Resources for Development Consulting on behalf of Global Witness, as well as the NGOs HEDA, RE:Common and The Corner. The estimated losses were calculated using an oil price of $70 a barrel as a basis.
 
Eni has criticised the way it was calculated because it ignores the possibility that Nigeria had the right to revise the deal to claim a 50% share of the production revenues.
 
Deal or no deal
Campaigners say the deal should be cancelled.
 
"We discovered that Shell had constructed a deal that cut Nigeria out of their share of profit oil from the block," Ava Lee, a campaigner at Global Witness told the BBC's World Business Report.
 
"This amount of money would be enough to educate six million teachers in Nigeria. It really can't be underestimated just how big a deal this could be for a country that right now has the highest rates of extreme poverty in the world."
 
Nigeria is the richest economy in Africa, but despite having large resources of oil and gas millions of people are poor.
 
It is understandable why Eni and Shell wanted to acquire the rights to develop OPL 245, because it is estimated to contain nine billion barrels of oil.
 
But the process of how they secured the contract is dogged by claims of corruption.
 
The court in Milan is weighing evidence of how a former Nigerian oil minister, Dan Etete, awarded ownership of OPL 245 to Malabu, a company he secretly controlled.
 
He is accused of paying bribes to others in the government, such as former President Goodluck Jonathan, to ensure that process went smoothly.
 
Shell and Eni are accused of knowing the $1.1bn they paid to Nigeria would be used for bribes, claims based on the content of emails which have since emerged.
 
"Looking at the emails it seems that Shell knew that the deal they were constructing was misleading but they went ahead with it anyway even though a number of Nigerian officials raised concerns about this scandalous, scandalous deal," says Ava Lee from Global Witness.
 
No wrongdoing
The Anglo-Dutch and Italian energy giants insist they have done nothing wrong, because they paid the money to secure the exploration rights directly to the Nigerian government.
 
Shell issued a statement to BBC World Business Report saying: "Since this matter is before the Tribunal of Milan it would not be appropriate for us to comment in detail. Issues that are under consideration as part of a trial process should be adjudicated in court and we do not wish to interfere with this process.
 
"We maintain that the settlement was a fully legal transaction and we believe the trial judges in Italy will conclude that there is no case against Shell or its former employees."
 
Eni has also denied any wrongdoing and told the BBC that it questions the competence of the experts commissioned by Global Witness and its "partners", as well as raising the possibility that the report by the campaign group is defamatory.
 
Shell accused of abuses in Nigeria
The Italian oil and gas company said "as this matter is currently before the Tribunal of Milan, we are unable to comment in detail".
 
In a statement it noted: "Global Witness together with its partners Corner House, HEDA Resource Centre and Re: Common had requested twice to be admitted as aggrieved parties in the Milan proceedings. On both occasions, the request was firmly denied by the Tribunal of Milan."
 
Eni also said it "continues to reject any allegation of impropriety or irregularity in connection with this transaction".
 
Biggest ever corruption case
Campaigners believe this is a landmark case and the outcome of the trial in Milan will cause an earthquake to reverberate through the oil and gas industry.
 
Nigeria's leader is being encouraged to intervene by Olanrewaju Suraju, from HEDA. "President Buhari should reject any deal," he said.
 
The contrast between the way Italy deals with migrants and the actions of one of the nation's biggest companies has been raised by Antonio Tricarico of Re;Common.
 
"The Italian government is discouraging Nigerian migrants trying to reach Italy by claiming that it will help them at home, but Italy's biggest multi-national, part owned by the state, is accused of scamming billions from the Nigerian people."
 
The outcome of the unprecedented court case in Milan could force the oil industry to change how it conducts its business, especially in countries where corruption is rife, because more transparency about contracts and payments made would discourage fraud.
 
 
Source: BBC
Published in Bank & Finance
A New Liquefied Natural Gas plant with a capacity of 2,250 tonnes per day has been inaugurated by Greenville Oil and Gas Company Limited in Rivers State.
 
The plant is worth $500 million with an annual capacity of 750 million tonnes.
 
The Chairman, Greenville LNG, Eddy Broeke, said at the occasion: “Our mission is to bridge the natural gas supply gap in order to promote economic and social development and revive moribund industries across the country. We’ve invested about $450m to $500m on this project.
 
“And this is because we have to build the whole infrastructure on our own, which includes the construction of filling stations for our product on strategic locations across the country.
 
“Environment wise, this is going to be a full revolution, especially in transportation methods. With respect to transportation, permit me to say that what we are bringing into Nigeria and Africa is the first set of trucks that are fuelled by LNG. Normally, this should reduce the price of transportation and logistics by about 35 to 40 per cent.”
 
The Greenville chairman also said the product would serve electricity generation plants that found it tough to get gas through pipelines.
 
 
Source: NAN
 
Published in Business
The Central Bank of Nigeria (CBN) Wednesday injected $210 million into the foreign exchange market to help stabilize the naira.
 
Figures from the bank showed that it offered $100m to the wholesale segment, while the Small and Medium Enterprises segment received $55m.
 
The invisibles segment, comprising tuition fees, medical payments and basic travel allowance, among others, also received a $55m boost.
 
The Director, Corporate Communications, CBN, Mr Isaac Okorafor, who confirmed the figures, noted that the CBN was pleased with the state of the forex market, adding that the bank would continue to intervene in order to sustain the liquidity in the market and guarantee the international value of the naira.
 
According to Okorafor, the level of transparency in the market was also a boost to confidence in the market.
 
Consequently, the naira maintain its stability in the forex market, exchanging at an average of N361/$1 in the BDC segment of the market on Wednesday.
 
 
Source: The Ripples
Published in Bank & Finance

The Nigerian National Petroleum Corporation (NNPC) has said the Kaduna Refinery and Petrochemical Company accrued loss totalling N18.67 billion in seven months this year as it was idle for the same period.

According to the monthly report prepared by NNPC, the refinery lost N3.81bn in February, N2.63bn in March, N4.22bn in May, N2.98bn in June, N2.35bn in July, and N2.68bn in August, but made a profit of N2.96bn in April.

There are four refineries in the country with two in Port Harcourt and one each in Kaduna and Warri, with an installed capacity of 445,000 barrels per day.

The refineries have over the years performed far below installed capacity, resulting in huge imports of refined petroleum products into the country.

The refineries, according to the report, lost a total of N68.12bn in the first half of this year, making a profit of N928.81m in April, for the first time in 10 months.

Total crude processed by the refineries in August was 56,804 metric tonnes as against the 90,872MT processed in the preceding month, translating to a combined yield efficiency of 80.74 per cent as against the 73.82 per cent in July.

According to the NNPC, only Warri and Port Harcourt refineries produced 53,881MT of finished petroleum products and 8,017MT of intermediate products out of the 56,804MT of crude processed at a combined capacity utilisation of 3.02 per cent, compared to 4.83 per cent combined capacity utilisation achieved in July.

“The lower operational performance recorded is attributable to the ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed,” the corporation added.

The corporation also said it had been adopting a merchant plant refineries business model since January 2017.

It said: “The model takes cognisance of the products worth and crude costs. The combined value of output by the three refineries (at import parity price) for the month of August 2018 amounted to N8.67bn while the associated crude plus freight costs and operational expenses were N9.78bn and N9.68bn respectively.”

 

Source: The Ripples

Published in Business

Oil marketers in Nigeria have cried out over the continued delay by the Federal Government in paying subsidy arrears accrued to them.

According to the Major Oil Marketers Association of Nigeria, MOMAN and the Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, the delay is impacting negatively on their businesses.

The marketers called on government to facilitate the payment of the debts by the agencies saddled with the responsibility.

It would be recalled that the Senate had approved the request by President Mohammadu Buhari for the payment of subsidy claims amounting to N348 billion to oil companies in July.

Speaking on the issue, the Executive Secretary, MOMAN, Mr Clement Isong, appealed to the government to hasten the payment of the subsidy arrears owed to them, adding that the continued non-payment had severely impacted their working capital and their ability to pay bank loans and their service providers.

He said: “We appreciate the efforts of the National Assembly and the Federal Executive Council in approving payment but the non-payment has a significantly negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on players’ efforts to continually invest in infrastructure and raise industry standards. We hope that the debts will be paid in full to the oil marketers as soon as possible.”

Isong said the debt owed to MOMAN members alone stood at N130.7bn as of August 2018.

Also speaking, the Executive Secretary, DAPPMAN, Mr Olufemi Adewole, faulted the processes highlighted for payment by the government, saying, they were inimical to the operations of their businesses.

He said: “The processes they have highlighted are killing our businesses. Immediately the banks read in the media that the National Assembly had approved, they went to court, got an injunction and seized our assets.”

According to Adewole, some marketers had been forced out of business as banks had taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel, while others were struggling to survive.

“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as of today, the money has yet to get into our accounts,” he added.

 

Source: The Ripples

Published in Business
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