Industry News
October 5, 2021 No Comments

FG insists Nigeria on track towards investment in oil, gas sector

Projected to hit $53 trillion by 2025, the global Environmental Social and Governance (ESG) assets can provide leeway for most oil and gas projects in Nigeria, especially the private and public sector, to address inherent hindrances.

Across the world, investors are now shifting attention to ESG, applying the non-financial factors as part of the key analysis process to identify material risks and growth opportunities.

A report published by Bloomberg had noted that global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.

Just last month, the International Energy Agency (IEA) had called for an end to fossil fuel investment as part of an attempt to ensure net-zero ambition becomes a reality by 2050. Although stakeholders in the oil and gas sector have criticised the call, it, however, sent a negative signal to the industry, which has already witnessed about a five per cent reduction in investment due to the Covid-19 pandemic.

Nigeria, with elusive governance, regulatory and fiscal outlook has over $160 billion projects yet to see Final Investment Decisions in the upstream segment.

Across Africa, the African Refiner and Distributor Association (ARDA) puts needed funds for refinery upgrade alone at $15.7 billion while an additional $7.5 billion investment, inclusive of debt, equity, and grants, will be required to build clean cooking stoves and downstream infrastructure that are going to support the attainment of the UN Sustainable Development Goals (SDGs).

Business Development experts for Vitol Services Ltd, Richard Egan, and Guillaume Quigiver, noted that ESG creates a new opportunity for African countries to generate carbon credits.

According to them, Africa has the lowest cost of generating carbon credits in the world and as such, a case should be made for a framework whereby African carbon emissions submissions are accepted in the global marketplace, stressing “ESG brings new potential revenue streams that can be incorporated into a financing package.”

Financial experts have also stated that ESG considerations are currently driving shifts in lending policies for various financial institutions and under what terms they are willing to lend, adding that while several key financial institutions like the World Bank and several Export Credit Agencies (ECAs) have pledged to end support for fossil fuel projects, Asian ECAs and some European ECAs have not made any such policy proclamations.

With the Petroleum Industry Bill (PIB) already being prepared in anticipation of presidential assent as stakeholders are divided over proper consideration for ESG, energy economist, Prof. Wunmi Iledare insisted that ESG must be on the radar of the industry as an important determinant for future investment flow.

Iledare said: “The oil and gas industry in Nigeria is not anti-environmental optimisation,” adding that the Society of Petroleum Engineers makes conscious efforts to produce oil and gas in a safe and environmentally secure manner.

According to him, for years, Health, Safety, Environment, and sustainability is a recognized discipline in the Petroleum Engineering profession.

Industry expert, Henry Adigun equally told The Guardian that although ESG is not at its best in the PIB, there are conscious efforts in the country to prioritise ESG.

He noted that the country is making efforts to attract green bonds, adding that the focus on gas would be an elixir towards ESG investment.

Industry Production
July 22, 2021 No Comments

Oando enters into settlement with Nigeria’s SEC

Oando Plc has entered into a settlement with the Securities and Exchange Commission (SEC) in the overriding interest of the shareholders of the company and the capital market after years of legal tussle.

This was contained in a circular posted on SEC’s website on Monday and obtained by the News Agency of Nigeria (NAN).

The commission in 2019 found Oando guilty of serious infractions, thereby barring Wale Tinubu, the company’s Chief Executive Officer and Mofe Boyo, its deputy CEO, from the boards of public companies for five years.

SEC also instituted an interim management to appoint new board of directors and management team for Oando.

The circular published Monday said the company had reached a settlement with the commission on the immediate withdrawal of all legal actions filed by it and all affected directors.

It said the agreement included payment of all monetary penalties stipulated in the commission’s letter of May 31, 2019; and an undertaking by the company to implement corporate governance improvements.

“Part of the terms required the submission by the company of quarterly reports on its compliance with the terms of the Settlement Agreement; the Investments and Securities Act, 2007; the SEC Rules and Regulations; the National Code of Corporate Governance and the SEC Guidelines to the Code of Corporate Governance,” it said.

“Pursuant to the powers conferred on the Commission by the Investments and Securities Act 2007, and the Rules and Regulations made pursuant thereto, the commission on July 15, entered into a settlement with Oando Plc (the company).

“The commission in its letter to the company dated May 31, 2019, gave certain directives and imposed sanctions on the company, following investigations conducted pursuant to two petitions filed with the commission in 2017.

 

Source: Premium Times

Industry News Production
March 23, 2021 No Comments

Shell and Eni acquitted in Nigeria corruption case

A Milan court has acquitted Shell and Eni and Eni CEO Claudio Descalzi in a corruption case related to a $1.3 billion worth acquisition of an oilfield off Nigeria about a decade ago.

The court revealed its decision on Wednesday, 17 March 2021 after more than three years since the trial started.

Responding to the court’s decision, Italy’s Eni on Wednesday welcomed the judgment of full acquittal of all charges by the Court of Milan, stating that “there was no case”.

After almost three years of trial, the judgment by the court has finally established that the company, the CEO Claudio Descalzi, and the management involved in the proceedings have all behaved in a lawful and correct manner, Eni said in the statement.

“Today, Eni expresses its gratitude for the trust placed by its stakeholders throughout the course of the trial, particularly in upholding the company’s management and the conduct of its business and respecting its reputation”, Eni added.

Commenting on the Milan Tribunal’s acquittal of Shell of charges related to OPL 245 in Nigeria, Shell CEO Ben van Beurden said: “We welcome today’s decision by the Milan Tribunal. We have always maintained that the 2011 settlement was legal, designed to resolve a decade-long legal dispute and unlock the development of the OPL 245 block.

“At the same time, this has been a difficult learning experience for us”, van Beurden added.

Reuters reported on Thursday that, following the judgement in the oil industry’s biggest corruption case, the Nigerian government was surprised and disappointed by the verdict and would consider whether to appeal once its lawyers had read the written judgment.

The case revolved around the acquisition by Shell and Eni of the Oil Prospecting Licence (OPL) 245, which covers a deep-water offshore area, approximately 150 km off the Niger Delta.

It is worth noting here that the prospecting licence for Block 245 expires in 2021 and the Nigerian Federal Government has not yet converted its prospecting licence into an oil mining lease (OLM). As a result, not a single oil barrel has been drilled to date.

As previously reported, the Italian prosecutor last year asked for Eni and Shell to be fined and some of their former and current executives, including Eni CEO Claudio Descalzi, to be jailed in the long-running trial over an alleged corruption scheme related to the licence OPL 245.

Industry News
March 23, 2021 No Comments

Coronavirus fuels uncertainty as global oil consumption dips 9% in 2020

Global consumption of petroleum and other liquid fuels crashed by nine percent to 92.2 million barrels per day (bpd) in 2020, due to the coronavirus restrictions and lockdowns, the U.S. Energy Information Administration (EIA) has said, noting that this was the largest drop in EIA’s series in 20 years.

While it projected that the world will return to more normal consumer behaviour this year, and a continued recovery in economies is set to contribute to rising oil consumption in 2021 as the year progresses, the EIA warned that the effects of the pandemic continue to present challenges in forecasting global petroleum liquids consumption.

For January, a significant drop in Nigeria’s oil export has limited the increase of oil output from member countries of the Organization of Oil Exporting Countries (OPEC).

OPEC recorded oil output rise for a seventh month in January, a Reuters survey found, after the group and allies agreed to ease record supply curbs further, but an involuntary drop in Nigerian exports limited the increase.

Among the countries showing lower output, the biggest drop was in Nigeria after force majeure was declared on exports of Qua Iboe, one of the country’s largest production streams.

Operator of the facility Exxon Mobil said on January 22 that the force majeure has been lifted.

The 13-member OPEC pumped 25.75 million barrels per day (bpd) in January, the survey found, up 160,000 bpd from December, and a further increase from a three-decade low reached in June.

EIA expected in its January Short-Term Energy Outlook that global liquid fuels consumption will grow by 5.6 million bpd this year, or by six percent compared to 2020, and rise by another 3.3 million bpd in 2022.

It noted that the United States will contribute with a 1.4 million bpd consumption increase to the growth in 2021, the EIA forecasts.

Oil consumption will rise this year thanks to both economic growth and a return to more normal travel patterns by the middle of the year, which will also have a small effect on oil consumption growth in 2022.

Despite the expected growth in global oil consumption in 2021, EIA still forecasts it to average below pre-pandemic levels—at 97.8 million bpd, it would be 3 percent less than the 2019 level.

The International Energy Agency (IEA), for its part, cut its estimate for oil demand growth for this year by 300,000 bpd to 5.5 million bpd. The IEA expects oil demand to average 96.6 million bpd in 2021, after crashing by an all-time high of 8.8 million bpd in 2020, under the weight of the COVID-19 pandemic.

OPEC+, which groups OPEC and other producers led by Russia, agreed to pump more from January 1, and returns to output restraint again from February amid fears of a slow demand recovery. The latest supply pact has helped oil to an 11-month high above $57 a barrel this year.

“The increase is natural with the higher production ceiling from January,” an OPEC delegate said.

In January, the biggest supply increases came from Saudi Arabia and Iraq, the group’s top two producers, reflecting their higher quotas. Iraq is still making almost all of its pledged OPEC+ cuts, having struggled to do so in the past.

Industry Power
March 23, 2021 No Comments

Nigerian court freezes Shell accounts ahead of $4bn Aiteo lawsuit

A federal court in Lagos, Nigeria has issued an injunction barring Shell’s subsidiares in the country from withdrawing money at 20 local banks until it ringfences potential damages in a lawsuit brought against the supermajor by Aiteo Eastern E&P.

Aiteo is seeking about $4 billion in total over alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims Shell undercounted its oil exports.

Court documents seen by Reuters show that Aiteo is seeking compensation over what it says was the poor condition of the pipeline and associated lost oil sales.

Aiteo also accuses Shell of deliberate improper metering of the Nigerian company’s oil exports from the Bonny Light terminal.

It is seeking $2.7 billion over the pipeline deal plus $1.28 billion for lost oil sales, the court documents show.

A spokesman for the Shell Petroleum Development Company (SPDC) told Reuters the allegations are “factually incorrect”.

“SPDC is working to secure an expeditious discharge of the freezing injunction, which we believe was obtained by Aiteo without any valid basis,” an SPDC spokesman said.

Aiteo declined to comment to Reuters on an ongoing legal case.

The lawsuit is latest in a string of legal headaches for the biggest international oil company operating in Nigeria, Africa’s biggest oil exporter.

A UK court last week cleared the way for local communities to sue the company over oil spills in the West African nation, and last month Shell lost a case brought in the Netherlands by Nigerian farmers and fisherman over pollution claims.

Shell, meanwhile, has initiated international arbitration proceedings against Nigeria over a case relating to oil spills that took place during the 1967-1970 Biafran war.(Copyright)

Industry
March 23, 2021 No Comments

Market Report: Nigeria Invests Billions To Improve Energy Sector

NIGERIA

A minimum of $10 billion worth of investments is currently being injected in the energy sector to delist Nigeria from one of the most energy impoverished nations in the world. Speaking at the Atlantic Council Global Energy Forum 2021, Alhaji Mele Kyari, Group Managing Director, Nigerian National Petroleum Corporation, elaborated on the topic of “Delivering Energy Access in the Developing World”, emphasizing the value of Nigeria’s resources in increasing domestic access.

Kyari stated that the country will focus on using its oil and gas resources to develop infrastructure as long as the commodity remains relevant, which he approximated will be so for about 40 years. To this end, he noted that the country, with its significant gas reserves, has approximately $3 -$4 billion in ongoing projects, many in advanced stages, to rev up production for domestic use and export.

The Minister of State for Petroleum Resources, H.E. Timipre Sylva, at the launch of the Federal Government Extended Special Public Works Program in Yenagoa, Bayelsa stated that the aim was to shield the most vulnerable from the effects of COVID-19, including but not limited to, pervasive hunger, poverty, environmental degradation, and joblessness. He disclosed that 8,000 Bayelsa State unemployed indigenes across the eight local government areas have been engaged in the scheme, which will last from January to April 2021.

The Petroleum Products Pricing Regulatory Agency reported that Nigeria’s domestic consumption of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, exceeded 1 million metric tons (MT) in 2020, the first year in the country’s history. The report stated that Nigeria consumed 840,594.37 MT of LPG in 2019, indicating an increase of 60,5% from 635,452.061 MT recorded in 2018. With this laudable feat, the country is on track to meet the five million MT target by 2022, set in the Nigeria Gas Policy of 2017. The agency noted that the Federal Government’s objective to deepen LPG penetration in the country seeks to create a healthier life for Nigerians by providing access to a cleaner source of energy for cooking, vehicular transportation, and other domestic uses.

SENEGAL

Australian oil and gas company FAR announced it has executed the sale agreement with Woodside for its interest in the Senegal RSSD Project to Australia’s Woodside. FAR had agreed to sell its Senegal interests, containing the Sangomar development, to India’s ONGC Videsh in November 2020. However, Woodside, as FAR’s partner in the project, exercised its first-buy rights to acquire FAR’s interest.

FAR has a 13.67% interest in the Sangomar exploitation area and a 15% interest in the remaining RSSD evaluation area. The terms of Woodside’s acquisition will reflect those of the FAR/ONGC Transaction, including payment to FAR of $45 million, reimbursement of FAR’s share of working capital including any cash calls from January 1, 2020 to completion, and entitlement to certain contingent payments capped at $55 million. FAR shareholders are due to consider authorizing the agreement with Woodside at a shareholders’ meeting to be held on February 18, 2021. Additionally, in December 2020, FAR stated that it had received a $159,15million all-cash takeover proposal from private investment firm Remus Horizons PCC Ltd. In a statement, FAR said it would provide shareholders with further information in advance of the February 18 meeting to enable them to consider the Woodside sale in the context of the Remus proposal.

GLOBAL

On January 21, crude oil prices weakened amid concerns about fuel demand as the COVID-19 pandemic continues after U.S. inventories posted an unexpected rise last week. The U.S. West Texas Intermediate crude futures were down 0.6% at $52.97 a barrel, while Brent futures were down 0.5% at $55.79 a barrel at 9:45 AM ET (14:45 GMT). Data released late January 20, by the American Petroleum Institute, showed that U.S. crude oil inventories rose 2.6 million barrels in the week up to January 15, against expectations for a 300,000-barrel draw in forecasts. The U.S. Energy Information Administration is due to release its official weekly inventory report on Friday, later than usual due to Monday’s holiday. If these numbers show a similar crude oil build, it would be the first since early December.

Additional market uncertainty is based on the fear that the surge of COVID-19 cases is having a direct impact on the demand for crude oil worldwide. Earlier this week the International Energy Agency revised and lowered its global demand estimates for 2021 by 300,000 barrels a day (bpd) due to a fresh wave of lockdowns, particularly in China, the largest importer of crude in the world.

On the supply side, newly inaugurated President Joe Biden announced his decision to cancel the Keystone XL pipeline project, which would have carried more than 800,000 bpd of crude from Alberta’s oil sands in Canada as far south as the U.S. Gulf Coast. Additionally, ING noted that Shell has lifted force majeure on exports of Forcados crude from Nigeria, a measure which had been in place since January 14, after the pipeline to the Forcados oil terminal was shut due to a leak.

Industry
January 29, 2021 No Comments

SEPLAT appoints Okechukwu Mba as Managing Director for ANOH

Seplat Petroleum Development Company Plc has appointed Mr Okechukwu Mba as the new Managing Director of ANOH Gas Processing Company (AGPC) Limited, the Incorporated Joint Venture (“IJV”) between Seplat and the Nigerian Gas Company (“NGC”), a wholly-owned subsidiary of Nigerian National Petroleum Corporation (“NNPC”). ANOH Gas Processing Company (AGPC) Limited is a midstream gas company committed to processing Gas from OML 53 for distribution to the local market.

His appointment takes effect from January 1, 2021.

Okechukwu has over 20 years of experience with a diversified background covering Commercial, Planning, Finance and Operations. Before his appointment, he held the position of General Manager Gas business. In that capacity, Okechukwu transformed SEPLAT’s Gas business into an Industry-recognized leading supplier of gas into the domestic market up to 400MMscfd of gas to a diversified portfolio of customers.

He was responsible for delivering new Gas projects, domestic and regional Gas Sale Agreements (GSA), new Gas business development, GSA operations, revenue collection, customer relations and overall implementation of Board-approved Gas strategy. Before that role, Okechukwu served as SEPLAT’s General Manager, Commercial. In that capacity, he led the successful delivery of several commercial agreements and managed Treasury, Tax, and Insurance functions.

Before SEPLAT, Okechukwu worked with Mobil Producing Nigeria and BG (British Gas) Nigeria, managing the Planning and Budget function. He started his career with Arthur Andersen as a Tax Consultant.

Okechukwu plays an active role in the Oil and Gas industry and recently served as the OPTS Gas Subcommittee’s elected Chairman. He has a keen interest in the gas to Power value chain. As a trusted advisor to key industry stakeholders, Okechukwu is regularly invited to domestic and international conferences to share his unique perspectives on the gas to Power value chain. He has a strong passion for developing people and spends time coaching and mentoring young professionals.

Okechukwu has a first-class degree in Accounting and is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN). He has taken a post-graduate course in Finance from Manchester Business School and an executive study from Harvard Business School on a continuous quest for development.

By this appointment, Okechukwu joins the Board of AGPC.

Seplat also appointed to the AGPC Board Dr. Chioma Nwachuku, the General Manager, External Affairs and Communications at SEPLAT; and the Nigerian National Petroleum Corporation (NNPC) likewise recently appointed Mrs Rose N. Eshiett, Group General Manager Finance at the NNPC. The new directors join the other Board members comprising Yusuf Usman (Chairman); Roger Brown; Oluwaseyi O. Omotowa; Oritsemeyiwa A. Eyesan; Effiong Okon and Okechukwu Mba.

The strong board will provide leadership to AGPC to deliver the 300MMscfd capacity ANOH plant, located on OML 53 in Imo State, being built by AGPC. AGPC is the IJV owned equally between Seplat and the Nigerian Gas Company (“NGC”), a wholly-owned subsidiary of Nigerian National Petroleum Corporation (“NNPC”).

ANOH is one of Nigeria’s most strategic gas projects. It will help Nigeria accelerate its transition from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation. Once ANOH gas plant is completed, AGPC will be a significant gas supplier to Nigeria’s power sector, supporting local employment and the cleaner generation of power for Nigerian homes and businesses.

Industry Manufacturing
December 17, 2020 No Comments

COVID-19: Local content sustained oil industry, says NCDMB

The Nigerian Content Development and Monitoring Board has said the local capacities developed through the implementation of the Nigerian Content Act sustained oil and gas operations in Nigeria during the height of the COVID-19 pandemic.

The Executive Secretary, NCDMB, Mr Simbi Wabote, said this on Monday at the Nigerian Content Capacity Building Workshop organised for media stakeholders in the South-South region, held in Port Harcourt, Rivers State, according to a statement on Wednesday.

He explained that operations of the sector continued without disruptions, even after many expatriates had returned to their countries, because Nigerians had developed robust human and infrastructural capacities to operate the highly technical sector.

He said some of the achievements recorded by the board during the COVID-19 pandemic included the inauguration of the NCDMB new head office, the increase of the size of the Nigerian Content Intervention Fund from $200m to $350m and addition of new products to the NCI Fund.

According to him, other achievements included the approval of the $50m Nigerian Content Research and Development Fund by the NCDMB Governing Council; inauguration of the 5,000 barrels-per-day Waltersmith Modular Refinery at Ibigwe, Imo State; and approval of additional partnerships in the Nigerian Content commercial ventures programme.

He said the board also made progress with the implementation of the 10-year strategic roadmap, held the checkpoint review session for the roadmap, continued the construction of oil and gas industrial parks and secured the final investment decision and award of contracts for the NLNG Train 7.

Wabote said the NCDMB had achieved 32 per cent value retention from the annual spend in the oil and gas industry, compared to only five per cent in 2010 when the Nigerian Content Act was enacted.

He noted that value retention grew to 26 per cent in 2017, after seven years of focused implementation.

According to him, the vision of the Nigerian Content 10-Year Strategic Roadmap is to achieve 70 per cent value retention by 2020.

Other targets of the roadmap are to create 300,000 jobs, retain $14bn out of $20bn annual industry spend as well as build shipyards and manufacturing facilities.

In his presentation, the General Manager, Corporate Communications and Zonal Coordination Division, NCDMB, Dr Ginah Ginah, said the board and operating oil companies had jointly deployed the community content guideline, which provides a framework for engaging youths of the host communities in employment, training and contracts in projects.

According to him, the CCG also provides for the establishment of critical infrastructure to stimulate development, attract new businesses to host communities and sustain the growth of host community entrepreneurs through funding and policy support.

Industry Production
December 17, 2020 No Comments

Nigeria’s daily oil production falls to 1.32 million barrels

Crude oil production in Nigeria extended its decline to 1.32 million barrels per day in November on the back of the cut deal by the Organisation of the Petroleum Exporting Countries and its allies.

The latest data obtained from OPEC on Wednesday showed that Nigeria’s oil output dropped from 1.34 million bpd in October, based on direct communication.

According to secondary sources, total OPEC crude oil production averaged 25.11 million bpd in November, up by 0.71 million bpd in October.

“Crude oil output increased mainly in Libya and UAE, while production decreased primarily in Iraq,” the group said in its Monthly Oil Report for November.

OPEC and its allies, known as OPEC+, agreed in April to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.

They decided to cut supply by a record 9.7 million bpd for May and June but the deal was extended in July by one month.

Members that did not implement 100 per cent of their production cuts in May and June, including Nigeria, were asked to make extra reductions from July to September to compensate for their failing.

The OPEC+ cuts of 9.7 million bpd were later scaled back to 7.7 million bpd from August through the end of the year.

Earlier this month, OPEC+ agreed to gradually increase their oil production by 500,000 bpd in January. The group also agreed to hold monthly meetings started from January to decide on further production adjustment until the total production increase reaches two million bpd.

They also agreed to extend the compensation period until the end of March 2021 to ensure full compensation of overproduction from all participating countries.

Source: Punch

Industry Manufacturing
November 10, 2020 No Comments

Oil price slump threatens Nigeria’s 2021 budget – FG

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the resurgence of COVID-19 in Europe, which has caused oil prices to decline in the international market, may affect the 2021 budget estimate.

The 2021 budget is predicated on $40 per barrel but the current price in the market stands at $37.

Ahmed made the statement on Thursday when she appeared before the Senate Committee on Finance to defend her ministry’s budget.

The chairman of the panel, Senator Adeola Olamilekan (APC, Lagos) had asked the minister about the contingency plans the federal government has put in place to insulate the budget from the shocks of falling oil price.

“The actual projection was $40 per barrel and that is the average price that we projected for the year. Some of the institutions that are responsible for tracking the price of crude oil, actually have crude oil prices going as far as $50, $52 per barrel.

“We took the safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two,” she stated.

The minister, however, dismissed insinuations that the federal government may increase Value Added Tax (VAT) again by 2.5% in 2021.

“As for the finance bill, we have the draft. There will be no increase in VAT or any form of taxes because we see 2021 as a year of recovery.”

When they appeared to defend their budgets, almost all the heads of the agencies under the committee’s supervision lamented that their budgetary allocations were too meagre to meet their obligations.

The Accountant General of the Federation, Ahmed Idris, said his agency has 37 offices in dire need of rehabilitation. But the finance minister said the budget office could not go beyond available resources.

“Everybody is claiming scarce resources, but we can’t go beyond what is available,” the minister said.

The Director General, Budget Office, Ben Akabueze, said until the federal government gets more revenue, no agency of government would get enough allocation.

Source: Daily Trust

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