News Production
September 20, 2022 No Comments

2023 budget threatened, as Nigeria’s crude oil output drops 7.4% to 1.37mb/d

Nigeria’s dwindling average oil output, including condensate, dropped Year-on-Year, YoY, by 7.4 per cent to 1.37 million barrels per day, mb/d in the first 10 months (January – October) 2022, from 1.48 mb/d in the corresponding period of 2021.

This showed a shortfall of 317,940 barrels when juxtaposed against the 1.69 mb/d which the 2023 budget was based on at $70 per barrel.

However, on Month-on-Month, MoM, the average oil output increased by 7.8 per cent to 1.23 mb/d in October 2022, from 1.14 mb/d, recorded in the preceding month of September 2022.

Oil theft, others

The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, which disclosed this in its monthly Oil Production Status Reports, obtained by Vanguard, weekend, did not specify the cause of the trend.

But checks by Vanguard, yesterday, attributed it to prolonged pipeline vandalism, oil theft, and illegal refining in the Niger Delta.

It indicated that pipeline vandalism, oil theft and illegal refining would still continue next year, despite the efforts of stakeholders, especially the government and oil companies, to tackle them.

Case of Shell

In its briefing notes obtained by Vanguard, Shell, the biggest International Oil Company, IoC, in Nigeria, stated: “Shell companies in Nigeria have a track record of strong production. But in 2021, the combined production from the SPDC JV and SNEPCo (Bonga) fell to 493,000 barrels of oil equivalent per day from 614,000 in 2020.

“The SPDC JV produced 383,000 barrels of oil equivalent in 2021, compared with 497,000 barrels of oil equivalent in 2020. The fall in output was largely as a result of curtailed oil production because of heightened security issues, such as crude oil theft and illegal oil refining.

”Production numbers were also down as a result of divestment action, including the sale of SPDC’s 30% interest in OML 17 for $533 million.

“In the last quarter of 2021, crude oil theft from pipelines across the region increased ostensibly as a result of rising oil prices, which made the activity more profitable. Security risks have heightened and production in some areas has been put on hold.

”The situation is impacting operators across the Niger Delta. The Nigerian National Petroleum Corporation, NNPC, has reported that crude thefts in 2021 reached 200,000 barrels per day – a quarter of onshore production.”

Oil market

The checks also showed that although the Organisation of Petroleum Exporting Countries, OPEC, interventions would make a positive impact, the global oil market would continue to record instability in 2023 and beyond, thereby impacting negatively the economy of nations, including Nigeria.

In its October 2022 Monthly Oil Market Report, MOMR, obtained by Vanguard, OPEC painted a picture of an uncertain oil market when it stated: “For 2023, world oil demand growth is revised down to stand at about 2.3 mb/d.

“Uncertainty about the geopolitical situation remains high, and there is potential for further US shale liquid production.”

Experts

However, commenting on the development, the National President of Oil and Gas Service providers Association of Nigeria, OGSPAN, Colman Obasi, said: “The government and other stakeholders have not done enough to address the various issues currently affecting the nation’s oil production.

”A lot can still be done, including the use of modern technologies, to monitor the nation’s oil and gas assets in the Niger Delta.”

Obasi, who attributed the vices partly to massive unemployment and desperation on the part of the youth to make a living, said: “If concerted efforts were made to industrialise Niger Delta, there would probably be no crude oil theft and devastation of the region. Oil theft has been with us for decades and seems to be gaining momentum.”

Similarly, Executive Director, Emmanuel Egbogah Foundation, Prof. Wunmi Iledare, said: “It seems the price of crude is demand determined. The likelihood to attain and sustain that output in 2023 is less likely. At best, that output may even be the potential because of insecurity, divestment, and onshore basin maturity.”

Manufacturing Power
August 23, 2022 No Comments

Leverage gas to power operations, NGA tells FG

President of the Nigerian Gas Association (NGA), Ed Ubong has asked the Federal Government to turn to gas to power daily operations.

Expressing optimism about the growing adoption of Compressed Natural Gas (CNG) as an alternative source of energy nationally, he said there is progress in deepening gas adoption.

Ubong made this observation during a panel session themed: “Harnessing Opportunities in the Nigerian Gas Sector” at the Nigerian Oil & Gas Conference in Abuja.

He acknowledged that despite the gas scarcity that the country is currently experiencing, progress is being made, adding that by working on the decade of gas’ holistic action plan involving all the critical stakeholders in the country, the narrative will change, and the investment made by all will yield dividends.

Ubong said: “We are making progress in deepening gas consumption across the country. The private stakeholders are doing their part as evidenced in the massive projects being commissioned. FG is also encouraging the adoption of gas as demonstrated in the launch of 20 gas-powered buses by the Head of the Civil Service to convey civil servants from their abodes to their offices in Abuja. There are still CNG input pricing concerns raised by CNG operators to enable the sector which need to be addressed urgently.

“The downside, however, comes in the form of the cooking gas scarcity that the nation is facing. We have been experiencing an acute shortage of gas for the past six months and its effect is keenly felt across all sectors, including cooking gas, gas to industries and gas to power plants for electricity generation. This poses a massive challenge to us in the gas sector as we need to accelerate the activation of initiatives that are in place to ensure that not only the domestic gas needs are met but also unlock the exportation of gas to other markets. These will undoubtedly boost the national economy as it will serve as a major source of revenue while reducing our oil dependency.”

He implored the government to fast-track clearing of the legacy gas supply debts in the power sector as it is an impediment to progress. Ubong maintained that as soon as the government removes this obstacle then it can hold private stakeholders accountable for the promises that they have made to bolster the sector with improved gas supply.

Ubong noted that while members of NGA in tandem with the government are seeking innovative solutions for the sector, end-users also need to adopt gas as a viable and clean source of energy during this decade of gas.

He commended the Nigerian Content Development & Monitoring Board (NCDMB) for embracing gas generators to power its headquarters office in Bayelsa.

He went a step further by asking FG to institutionalize gas-powered generator usage for public parastatals and private entities that use generators of more than 250 kva capacity.

Industry
August 23, 2022 No Comments

Five oil, gas companies grew revenues by 41 per cent in H1

Five leading indigenous oil and gas companies have posted N625.08 billion revenues in the half year (H1) of 2022, 40.7 per cent higher than their performance in the corresponding period of 2021 when they recorded N444.25 billion.

Although the revenue of these firms rose by 40.7 per cent, from 2021 figure data obtained from the Nigerian Exchange Limited (NGX) showed that their performances were negatively affected by both endogenous and exogenous challenges currently impeding the country’s business environment.

Ardova Plc posted revenue of N126.6 billion for the first half of the year 2022 up from N86.770 billion recorded in 2021, accounting for an increase of 45.96 per cent. Ardova closed its last trading day on August 10, 2022, at N13 per share on the (NGX). The company is the 76th most traded stock on the Nigerian Stock Exchange over the past three months (May 10 to Aug 9, 2022).

Also, Seplat Energy Plc sustained a rising profile during the half year ended June 30, 2022, as revenue rose by 82 per cent. The company reported a revenue of N219.203 billion in its half-year 2022 from N120.44 billion achieved in the previous year.

Seplat closed its last trading day on August 10, 2022, at N1, 430.5 per share on the (NGX). The oil firm started the year with a share price of N650 and has since gained 120 per cent on that price valuation.

However, following financial and operational headwinds in the first half of the year, Caverton Offshore Support Group Plc, a provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria reported a 22.74 per cent drop in revenue for the first half of the year 2022 to N13.96 billion against N18.069 billion achieved in 2021.

The company closed its last trading day (Wednesday, August 10, 2022) at N1.05 per share on the (NGX). The Offshore Support firm began the year with a share price of N1.72 but has since lost 36.6 per cent off that price valuation, ranking it 154th on the NGX in terms of year-to-date performance.

Similarly, Conoil Plc also reported a decline of 16.83 per cent in revenue during the half year as the oil and gas firm battled to remain afloat in the operational environment amid volatility in the economy. Conoil reported revenue of N56.248 billion during the half year of 2022 as against N67.638 billion representing a drop of 16.83 per cent.

Conoil closed its last trading day on August 10, 2022, at N25.95 per share on the Nigerian Stock Exchange (NGX). It started the year with a share price of N22 and has since gained 18 per cent on that price valuation, ranking 32nd on the NGX in terms of year-to-date performance.

Total Energy Plc leveraged the higher oil prices to gain a 38.12 per cent increase in revenue during the review period. The company recorded a revenue of N209.014 billion in the half year 2022 from N151.33 billion in 2021, accounting for an increase of 38.12 per cent.

The growth in revenue reported by Total Energies Marketing Nigeria was driven by higher product prices and demand from consumers in the half year of 2022. The company closed its last trading day on August 10, 2022, at N234.50 per share on the (NGX). It commenced the year with a share price of N234.5 and has since gained more than 5.68 per cent in that price valuation, ranking 48th on the NGX in terms of year-to-date.

Reacting to the performance, the President of Investors Alternative Dispute Resolution Initiative (IADRI), Moses Igbrude, said: “It is a good performance and an excellent result.

This is despite the unfavorable economic environment where the government is a competitor and sole importer of petrol, coupled with forex shortage, kudos to them.

“To improve on this performance, the companies should focus more on their competitive advantage areas such as lubricant production, diesel import, insecticide production as well as car services business and any other areas where they can make good margins in their business operations. They should also manage their costs effectively,” he said.

Production
August 23, 2022 No Comments

Obaseki tasks stakeholders on cooperation at Edo maiden oil, gas forum

Edo State governor, Godwin Obaseki, yesterday, called for increased cooperation among stakeholders and host communities to foster prosperity in oil and gas-producing areas of the state.

Obaseki made the call during a one-day stakeholders’ forum organised by the Edo State Commissioner for Mining, Oil and Gas, Ethan Uzamere.

The event was aimed at rallying oil and gas stakeholders on effective implementation of the Petroleum Industry Act (PIA) and developing Edo State’s policy for the industry.

Obaseki, who was represented by the Commissioner for Local Government, Monday Osaigbovo, said the purpose of the engagement was to freely discuss the implementation of the PIA for sustainable peace.

He said: “The oil and gas sector, to date, is the mainstay of the Nigerian economy. And as such, there is a need to evaluate its contributions to communities and the state. This forum will afford stakeholders opportunities to discuss ways to strengthen the process of PIA implementation.”

Obaseki further reiterated the commitment of his administration to improving the lives of residents in the three oil-producing local councils of Orhionmwon, Ikpoba-Okha and Ovia North-East.

In his opening remarks, Uzamere said the state government is at the forefront in the implementation of the PIA and that the ministry is utilising the forum to set a foundation for the development of a comprehensive working policy for the sector.

He said: “The Act seeks to promote ease of doing business in the oil and gas industry, regulating the midstream and downstream sector, as well as making clear the roles of all players in the sector.

“It provides for fast approvals of licences to investors, removes bureaucratic bottlenecks to fuel importation and subsidies, while strengthening the value of the naira and creating job opportunities in the petroleum value chain, among

Factory Industry
June 1, 2022 No Comments

Oil regulator blames marketers, disburses N58b bridging claims

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday, in Abuja, said marketers of Premium Motor Spirit (PMS) have a hand in the delayed payment for petroleum equalisation.

The NMDPRA said while payment of the claims said to be responsible for ongoing PMS scarcity in some parts of the country takes time to be sorted, “some of the pending payments is due to the reluctance of marketers to reconcile their claims, in spite of the authority’s continuous appeal to come for reconciliation whenever there are discrepancies.”

Scarcity of PMS, otherwise called petrol, had surfaced in the Federal Capital Territory (FCT) earlier this week as marketers blamed it on the inability of the Federal Government to settle over N100 billion equalisation payment as well as a breakdown of key storage and distribution infrastructure may spread the development across the country.

Coming barely two months after the country experienced a similar situation, most motorists have had to wait for hours as only a few stations are dispensing.

Like the Nigeria National Petroleum Company Limited, NMDPRA said in a release recently that the country has sufficient PMS to last over 47 days, translating to about 2.65 billion litres.

“There is no need to panic as the current situation being experienced in some parts of the country will soon stabilise,” the statement said.

NMDPRA disclosed that the administration of bridging payment is a continuous process as hundreds of trucks load and discharge products daily thereby adding to the claims.

“Since December 2021, the NMDPRA has made several payments to marketers whose claims have been verified. So far, over N58 billion has been disbursed to oil marketers out of which about N34 billion went directly to members of the Independent Petroleum Marketers Association of Nigeria (IPMAN),” the regulator said.

NMDPRA further disclosed that the total amount disbursed so far remained the highest ever paid within a 6-months span by previous fund administrators.

It noted that the reimbursement of marketer’s transportation differentials for petroleum products movement from depots to sales outlets remained a priority.

Production
June 1, 2022 No Comments

Nigeria to miss out as LNG contracts gain momentum

Investment, infrastructure challenges as well as historic government-induced bottlenecks may continue to make Nigeria miss out as demand for long-term LNG contracts continue to soar.

While Nigeria’s proven gas reserves already moved to 208 trillion standard cubic feet, policies, according to the Nigerian Upstream Petroleum Regulatory Commission, investment and infrastructure to make the reserves of economic benefits remain in limbo.

Although the Nigeria LNG train seven project is on track, most LNG projects that should have improved the country’s LNG portfolio and revenue like the Brass LNG and Olokola LNG have been elusive for decades without positive signs of final investment decisions.

Instead of economic benefits, the World Bank, last week, named Nigeria as the seventh on the list of top 10 countries worldwide involved in gas flaring in 2021.

While there are hopes from the Federal Government’s decade of gas policy and provisions in the Petroleum Industry Act, electioneering activities stand in the way despite the opportunities and changing dynamics created by the Russia and Ukraine war.

This is coming as a report released Monday by Wood Mackenzie, a Verisk business, noted that large volumes of LNG have been signed as prices for oil-linked deals under negotiation are rising.

Long-term contracting is off to a fast start this year with more than 10 million tonnes per annum (mmtpa) signed to end-market users. In 2021, the group noted, while adding that the volume of long-term LNG contracts signed to end-user markets returned to its highest level in the last five years.

Wood Mackenzie principal analyst, Daniel Toleman said: “The Russian invasion of Ukraine has had a dramatic impact on long-term LNG contracts. Many traditional LNG buyers will neither procure spot gas or LNG nor renew or sign additional LNG contracts with Russian sellers. Spot prices have also been high and volatile, pushing many buyers towards long-term contracts. Additionally, some buyers are returning to long-term contracting on behalf of governments to protect national energy security.”

According to the report, the prevailing situation will result in rising prices for long-term oil-linked contracts under negotiation. Between 2020 and early 2021, WoodMac said long-term oil-linked contract prices fell into the 10 per cent range, levels not seen in the last 10 years.

Toleman said: “The Russian invasion of Ukraine has pushed prices higher. Middle East sellers are now asking for deals above 12 per cent. These deals have limited flexibility, seasonality and are fixed to a market so the slope of a ‘normal’ contract is higher, between 12.5 per cent and 14.0 per cent.

“There has been news about sellers wanting 16 per cent or 17 per cent for 10 years, but we have not been able to substantiate this. Short-term deals can attract these rates. We believe that sellers can get 16 per slope for two- or three- year deals with volumes ending before the end of 2024. The range is slightly lower at 14-15 per cent for four- or five-year deals with volumes that end in 2026.

“That said, prices vary greatly based on the terms, tenure and start date of new deals. The market remains bifurcated with contracts starting before or after 2026, attracting premiums or discounts to this range, respectively.”

The report further stated that Chinese buyers continue to dominate the market signing more than 8 mmpta of new LNG sale and purchase agreements this year.

It added that most new contracts are from US supply as operators move projects forward. All these contracts are linked to North American prices.

Production
June 1, 2022 No Comments

Oil, gas industry reforms key to economic revitalisation, says Alakija

The Vice-chairman of FAMFA Oil Limited, Folorunso Alakija, has stated that the current reforms in the oil and gas sector are expected to have a far-reaching impact on revitalizing the Nigerian economy.

Alakija disclosed this while featuring as a guest on a TV programme, where she discussed issues such as climate change, the African economy, and how Nigeria can diversify its economy and focus on other areas that are safer for the environment.

She pointed out that as part of the structural adjustments to ramp up oil production, the government has introduced reforms such as the marginal field rounds, the Petroleum Industry Act (PIA) and the transformation of the Nigerian National Petroleum Corporation (NNPC) into a limited liability company.

Speaking further, she said in view of the last marginal field rounds which is as a result of International Oil Companies (IOCs) divesting from some of their assets in the country, the industry now has more indigenous players, which will help the economy.

On the impact of oil subsidy on the Nigerian economy, she was optimistic that the Dangote Petroleum Refinery, will bring a positive change in the story of subsidy and refining when operational later this year, such that the country will not have to import as much as it currently does.

Alakija also expressed her views on climate change, highlighting the need for the Government to diversify the economy.

Responding to the question on how Africa and Nigeria will successfully move away from the impacts of climate change on their economy, Alakija stated that the only way to reduce the impacts is for Nigeria and other African countries to pay more attention to all the other sectors that will not have damaging consequences on the environment.

According to her, these sectors include the manufacturing, agriculture, services and entertainment sectors among others.

“There would be more demands on us now to look inward and to ensure that we are using our land, water, climate, and human resources to ensure that agriculture is ramped up again as it used to be the case before, we found oil.

“There is the ICT sector that we need to pay attention to, and I believe that Nigerians are making waves in that sector. Our mining is an area that we need to pay more attention to. I think those areas have all suffered because we have relied solely on oil over the years,” she added.

Uncategorized
May 5, 2022 No Comments

Again, vandals attack Bayelsa pipeline, disrupt Agip’s gas export

Barely one week after it was attacked by vandals on March 29, the 24-inch Ogboinbiri/OB-OB gas pipeline has been vandalised and set ablaze, disrupting the firm’s gas export schedule from oilfields in Bayelsa State

The breach of the pipeline operated by Nigerian Agip Oil Company (NAOC) cuts the oil firm’s gas export feed to the Nigeria Liquified Natural Gas gathering and processing plant.

The vandalised point, located within Okaka and Azikoro in Yenagoa Council, was engulfed by fire on Wednesday.

Mr. Idris Musa, Director-General/Chief Executive Officer, National Oil Spills Detection and Response Agency (NOSDRA) confirmed the incident yesterday.

The spills response agency had on March 30 said its investigations revealed a rising spate of sabotage-induced oil and gas leaks at oilfields in Bayelsa.

Musa had raised the alarm that three sabotage incidents had occurred on oil and gas facilities in Bayelsa within one week and advised operators to reinforce surveillance.

The NOSDRA boss explained that a few days after fixing the gas pipeline, vandals blew up the pipeline again and it went up in flames.

“There was a gas leak last week from a vandalised gas pipeline OB-OB/Ogboinbiri pipeline at Okaka in Bayelsa State.

“The pipeline was repaired but unfortunately vandalised again, thus resulting in fire.

“The Nigerian Agip Oil Company is working actively to depressurise the pipeline to effect repairs on the pipeline,” Musa said.

Officials of NAOC declined to comment on the incident.

The fire at the site, which had forced surrounding vegetation to wither, has not been put out as of yesterday morning.

News
May 5, 2022 No Comments

Oil, gas data businesses to hit $145.9 billion

Data business in the oil and gas sector could hit as much as $145.9 billion by 2032, rising at a compound yearly growth rate of 16.5 per cent for the next decade.

This is coming despite the divestment and push from fossil fuel. The current market value of data in the oil and gas sector stands at $31.6 billion.

The report released by Future Market Insights and published by WorldOil, noted that operational efficiency and performance improvement increased the popularity of real-time analysis and predictive analytics solutions. It also increased awareness among end-users. Those are all considered major growth factors for the data business in the oil & gas industry.

The report revealed that the outbreak of Covid-19 triggered big data analytics in oil and gas operations allowing engineers and researchers to study data remotely.

It also noted that data recording sensors have recently become a recent introduction to the industry for various features such as discovery, drilling, production, refining, and transportation, where big data has become an essential part of data analysis, which is expected to be a driving factor for the demand for data business in oil & gas.

Big data also allow for better asset management, operations, manufacturing, and worker safety. However, big data analytics continue to confront hurdles owing to a lack of corporate backing and awareness of the technology; data and a grasp of the problem’s complexity are key stumbling blocks to the growth of the data business in the oil & gas market share.

The precision and efficiency of big data have led to its acceptance in the oil and gas industry.

It helps the oil and gas industry improve the performance of drilling and production activities. It improves the company’s efficiency and keeps track of the oil extraction activities in real-time.

It is offered in software, hardware, and cloud service platforms to deliver the best data collection service to oil and gas organisations.

Furthermore, advances in data gathering allow for the incorporation of machine learning and artificial intelligence (AI) technologies that safeguard data by allowing for secure data storage and collection. It aids industries in increasing productivity and increasing yearly revenues, hence increasing global demand for data business in oil & gas.

As per the data business in oil & gas market study, manufacturers all over the world are producing big high-quality data in oil and gas services that reduce data inconsistencies, resulting in data business in oil & gas market growth. As a result, these variables may contribute to the rise of big data in the oil and gas business.

However, a lack of public understanding of the numerous benefits of big data in oil and gas solutions is expected to stymie the data business in oil & gas market size expansion.

The oil and gas industry’s increasing output and drilling performance is a major data business driver in the oil & gas market. Other factors driving market expansion include the need to improve decision-making and operational and business performance, as well as volatile oil prices and growing competition in the oil and gas industry.

Power
May 5, 2022 No Comments

FG will achieve gas-powered economy by 2030, says minister

The Minister of State for Petroleum, Timipre Sylva, said the Federal Government aims to transform Nigeria into a gas-powered economy by 2030 to address challenges around power generation through gas-powered plants.

He said natural gas is a key resource for energy transition and that it has all the credentials to support Nigeria to meet its commitment in line with the United Nations’ 17 Sustainable Development Goals (SDGs).

The minister disclosed this in Abuja at the 2022 Public Lecture under the theme, ‘Inclusive Energy Transition: Key Issues, Investment Opportunities and Barriers Towards Achieving the Decade of Gas Initiative in Nigeria’.

“At present, only gas can meet all three priorities simultaneously. This puts Nigeria with approximately 206.53 trillion cubic feet of proven gas valued at over $803.4 trillion and a potential upside of 600TCF of gas, the most extensive in Africa, and in the top 10 globally.

“It is so fittingly themed because Nigeria has already made a strong commitment to embracing this transition, pledging to significantly reduce its greenhouse gas emissions under the Paris Agreement on Climate Change and establishing the National Council on Climate Change (NCCC), which will have the power to make policies and decisions on all matters relating to climate change in Nigeria,” the minister said.

He continued: “This is in addition to a commitment to attain net-zero by 2060. Nigeria is one of the world’s last energy frontiers, a nation brimming with enormous opportunities.

“As a nation, we are following a transition pathway that combines technology, investment, business strategies and government policy that will enable Nigeria to transition from its current energy system to a low-carbon energy system with natural gas playing a pivotal role over the next generation, between now and 2060.

“The growth of our gas reserves is a critical lever to achieving the Federal Government’s ‘Decade of Gas Initiative’, which is aimed at transforming Nigeria to a gas-powered economy by 2030.”

In her address, the Chairman, of the Nigerian Society of Engineers (NSE) Bwari Branch, Halimat Adediran, called on the government to make concerted efforts to migrate the country from an energy-importing nation to an energy-exporting one.

She said: “The Petroleum Industry Act (PIA) is a game-changer for us as a people and all stakeholders. But some of us are still oblivious of its enormous opportunities. The PIA elicited several comments and inquiries from potential investors and other stakeholders in Nigeria and abroad.

“The total domestic gas demand requirement (DGDR) in Nigeria stands at 4.482 billion standard cubics per day. More so, Nigeria cannot continue to depend solely on crude oil for its foreign exchange earnings after the COVID-19 pandemic clearly showed us the grave limitations of this as witnessed by the recession our economy suffered due to our total reliance on crude oil.”

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