News
September 15, 2023 No Comments

OPEC projects increased demand for fuel-based vehicles

Despite the push from fossil fuel due to net-zero concerns, Organisation of Petroleum Exporting Countries (OPEC) has said demand for the products would continue to power the transportation sector.

The growing rate of electric vehicles, according to new research by OPEC may not drastically limit internal combustion engine vehicles while electric vehicles, including battery electric vehicles (BEV) are expected to account for the largest share of fleet additions in the long term.

OPEC said that vehicles would retain their leading role, with a global share of more than 70 per cent in 2045.

OPEC noted that the petroleum industry, like all sectors, relies on investment to develop and adapt technologies that could address the climate challenge.

It added that efforts to restrict investment opportunities limit the industry’s ability to become more sustainable while meeting growing consumer demand.

OPEC had noted that global oil-related investment requirements total $12.1 trillion as of 2022 over the long term.

Of the fund, OPEC said $9.5 trillion is needed for the upstream, $1.6 trillion for the downstream, and $1 trillion in the midstream, adding that North America represents the bulk of upstream investments for most of the forecast period.

The development is coming at a time when oil companies and investors across the world are slowing down regarding their investment portfolios in fossil fuels.

Despite the push for energy transition, Senior Research Analyst, Energy Studies Department, OPEC, Dr. Haris Aliefendic, stated that global oil demand is rising and would increase by close to 13 million barrels per day, rising to 110 mb/d in 2045.

According to him, growth would slow after the medium-term period but oil demand would reach almost 110 mb/d in the long-term.

Aliefendic noted that the largest incremental demand would be in India, Asia and Africa. He noted that global energy demand would also increase by 23 per cent to reach 351 mboe/d in 2045 as renewables would mark the fastest and largest growth.

News
September 15, 2023 No Comments

Global energy crisis triggers record demand for natural gas

The global energy crisis has caused a record demand for natural gas as countries seek to reduce reliance on traditional fossil fuels, the International Energy Agency’s (IEA) has said in this week’s industry report.

IEA in its global gas security review noted that the crisis has reshaped natural gas markets, highlighting the need for closer dialogue between producers and consumers to ensure the security of supply.

Sparked by Russia’s invasion of Ukraine, the report noted that the crisis transformed the structure of the natural gas market, forcing it to require closer dialogue between producers and consumers looking to ensure both short- and longer-term security of supply and reduce emissions.

IEA’s Director of Energy Markets and Security, Keisuke Sadamori, said the new global gas market is taking shape after last year’s crisis, noting that responsible producers and consumers must reconsider their approaches to supply security and flexibility, cooperating more closely.

“Meaningful efforts are also needed to reduce the carbon footprint of gas supply chains, including through greater use of low-emissions gasses”.The agency revealed that if injections continue at the average rate observed since mid-April, EU storage sites could be filled close to 100 per cent by mid-September and full storage sites are no guarantee against market volatility during the winter

Also, Executive Director, IEA, Faith Birol, said solar is set to attract more capital than global oil production in 2023 for the first time. He said it reflected the major shift taking place in energy systems around the world as a sign that clean energy is moving faster than many people think.

The World Energy Association, in its response, said the transition isn’t only about a more sustainable energy future, but also reflects changing economic and societal values.

The association stressed that as technology continues to advance and the costs of solar panels decrease, widespread adoption should be expected.
“This is a significant milestone, it underscores the global shift towards renewable energy and the decreasing reliance on fossil fuels. The fact that solar panel installation is attracting more capital indicates a strong belief in its long-term viability and profitability,” it stated.

The agency emphasised the role of critical minerals in the clean energy transition as an energy system powered by clean energy technologies differs profoundly from one fuelled by traditional hydrocarbon resources.

It stressed that scaling up clean energy spending in emerging and developing economies can improve energy access and security, jobs creation, industry growth and more, noting that public spending alone is not enough to do this as greater private financing is vital.

“Critical minerals like copper, lithium, nickel, cobalt and rare earth are essential components in clean energy technologies, ensuring reliable supplies of these minerals will be vital to supporting efforts to reach climate and energy goals”.

The agency stated that a typical electric car requires six times the mineral inputs of a conventional car and an offshore wind plant requires 13 times more mineral resources than a similarly sized gas-fired plant.

It revealed that since 2010, the average amount of mineral resources needed for a new unit of power generation capacity has increased by 50 per cent as the share of renewables in new investment has risen.

Rare earth elements are essential for permanent magnets used in wind turbines and electric vehicles (EV), noting that electricity networks need a huge amount of copper and aluminum, with copper being a cornerstone for all electricity-related technologies.

The agency stated that mineral demand for clean energy technologies is set to quadruple by 2050 in both the announced pledges and net zero scenarios, with annual revenues reaching $400 billion as high and volatile critical mineral prices and highly concentrated supply chains could delay energy transitions or make them costlier.

“As countries accelerate their efforts to reduce emissions, they also need to make sure that energy systems remain resilient and secure. The rising importance of critical minerals in a decarbonising energy system requires energy policymakers to expand their horizons and consider potential new vulnerabilities.
“It is essential to ensure diverse, resilient and secure clean energy supply chains, including for critical minerals.”

News Power
August 6, 2023 No Comments

Nigeria needs reliable energy for industrialisation – Tinubu

President Bola Tinubu has said that Nigeria’s plans to become industrialised, create jobs and achieve economic growth cannot be achieved if reliable energy is not generated, transmitted and distributed.

Tinubu said this at the groundbreaking ceremony of the Gwagwalada Independent Power Plant (GIPP) Project held in Abuja on Friday.

He reiterated that he had promised to prioritize energy availability and stability while using available energy resources to increase power generation beyond the current capacity and strengthen the integrity of the transmission infrastructure while distribution bottlenecks are removed.

“We cannot be productive without energy efficiency; To accelerate our economic growth, we must remove every obstacle on our way to progress,” he said.

In his address, Mele Kyari, GCEO, NNPCL said Nigeria has abundant gas resource which NNPCL as a commercial enterprise is leveraging to monetize the available resources by expanding access to energy to support economic growth, energy access, industrialization and job creation.

He described the project as a giant step towards achieving the NNPC’s goal of adding 5GW to the national power generation by 2024

He said currently NNPC and partners are delivering about 800MW to the national grid from Afam Vl and Okpai Phase thermal power plants with combined installed capacity of 1,100MW, adding that the Okpai Phase 2 project that will add up to 320MW of power to the national grid and progressing with other power plant projects across the country including those along the AKK pipeline route has been completed.

He added that the Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor which is part of the 3,600MW cumulative power capacity including Kaduna IPP (900MW) and Kano IPP (1,350MW).

The Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor. will be delivered in collaboration with General Electric as the as the Original Equipment Manufacturer (OEM) and China Machinery and Engineering Corporation (CMEC) as the Engineering, Procurement and Construction (EPC) Contractor.

He said this is part of the 3,600MW cumulative power capacity which includes Kaduna IPP (900MW) and Kano IPP (1,350MW)

“Our ambition is to create capital power plants across the country in small scale where transmission issues will not become a major concern; Expanding access to energy will change the game, It will create a better investment climate and promote balanced economic growth, a win-win situation for the Nation and for NNPC as a commercial company,” he said.

The project according to NNPCL was necessitated by the need to deliver gas towards achieving additional power generation capacity in Nigeria and make a substantial contribution to the positioning of gas as the preferred fuel for power.

The first phase of the project has a capacity of 350MW consisting of one gas turbine and one steam turbine

Situated on 54.7 hectares of land at Gwagwalada, Abuja, the project has a combined cycle of three power train blocks of 4500 megawatts (MW) each, Two gas turbines, Two heat recovery and steam generators, one steam turbine and can generate 10.3m MW per hour of electricity.

News Power Production
June 5, 2023 No Comments

NNPC to end oil swap contracts, embrace cash payments for petrol imports

The Nigerian National Petroleum Company Limited (NNPC) is winding down crude oil swap contracts with traders and will pay cash for petrol imports as private companies could begin importing petrol as soon as this month, according to a Reuters report.

This means that NNPC is in the process of ending crude swap contracts with traders. Instead of exchanging crude oil for refined petroleum products, the state-oil company will now make cash payments for petrol imports.

The move is part of President Bola Tinubu’s plans to deregulate the petrol market and reduce the burden on government finances, the statement said.

President Bola Tinubu on Monday during his inauguration announced that “subsidy is gone” sending the market into a tailspin as those who had the products quickly shut their pumps and long queues emerged across the nation.

NNPC has been importing petrol from consortiums of foreign and local trading firms and repaying them with crude oil via what is known as Direct Sale Direct Purchase (DSDP) contracts since 2016 because it does not have enough cash to pay for the purchases, the statement said.

“In the last four months, we practically terminated all DSDP contracts. And we now have an arm’s-length process where we can pay cash for the imports,” Mele Kyari, group chief executive officer, NNPC told Reuters in an interview late on Saturday.

“This is the first time NNPC has said it is terminating crude swap contracts. By importing less gasoline as private companies import the bulk, NNPC will be able to pay for its purchases in cash.”

Nigeria is Africa’s biggest crude producer but imports most of its refined products after running down its refineries. Nigeria’s petrol import bill hit N5.2 trillion in 2022, the highest in six years, as the quest by the country to wean itself off imported fuel drags.

Read also: Nigerians groan as NNPC, marketers raise petrol price

A significant drop in oil production last year coupled with high global fuel prices due to the war in Ukraine pushed NNPC’s debt to traders higher. It owed the consortiums about $2 billion, a September 2022 NNPC report to the Federation Account Allocation Committee shows, the statement said.

“An industry source with direct knowledge of the matter said NNPC was still allocating crude for fuel swaps for July loading, though less than in previous months. In its report detailing March crude oil loadings, NNPC also allocated crude to the swap contracts held by the consortiums,” Reuters said.

Kyari told Reuters that NNPC’s monopoly on petrol supplies was ending and private firms could start importing as early as this month.

“Nigeria’s total crude and condensate output was at 1.56 million barrels a day (bpd) as of Friday. Nigeria has struggled to meet its Organization of Petroleum Exporting Countries (OPEC) oil quota of 1.742 million bpd due to grand oil theft and illegal refining,” Kyari said.

That has raised doubts on whether Nigeria can meet supplies for the 650,000-bpd newly commissioned Dangote Refinery. NNPC has a contract to supply 300,000 bpd to the refinery.

News Power
June 5, 2023 No Comments

Port Harcourt refinery to start before end of 2023, says NNPC GMD

Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, has promised that the Port Harcourt refinery, located in Rivers State, Nigeria, will kick off production of fuel and other refinery activities before the end of the year.

In an exclusive interview with Arise Television’s “The Morning Show” on Thursday, Kyari said that the reason why the Port Harcourt refinery is behind schedule is because of disruptions in the global supply value chain that were created by the Russia-Ukraine war and are not peculiar to Nigeria.

“Of course there is work going on in the Warri refinery that is already in earnest. For the Kaduna refinery, that is a different situation, and we have awarded the turnaround maintenance for the Kaduna refinery, which is already in place,” he said about the other two federal government refineries.

Read also:Nigerians groan as NNPC, marketers raise petrol price

He admitted that with the Dangote Refinery, local refineries whose turnaround maintenance is nearing completion, and a couple of modular refineries, the country should be expecting a surplus of petroleum products by the end of next year.

“So ultimately, what this means is that we are going to have a surplus of product in the country by the end of next year,” he noted.

He reminded everyone of the projected contribution of the Dangote refinery once commercial production kicks off sometime in July or August.

“Once that happens, you would have a significant volume of PMS—once that happens, we fix our refineries and other modular refineries, and this country will be the hub of petroleum refineries on the continent and a reversal of market choice,” he said.

Earlier in the interview, the Group Managing Director debunked popular views, claiming that once the country starts a whole-scale domestic refinery of petroleum products, the price of fuel and others will come down drastically.

“There is this misconception that once you start to refine locally, the price is going to crash to half the price; that is not correct,” he said. “The distinction between domestic pricing and import pricing is simply two things.”

He listed two major instantaneous benefits outside of this price crash that will come to the country. According to Kyari, the security of the supply of products and businesses around refinery activities will improve.

He said, “First, it gives you security of supply—supply is by your door. You don’t need 14 days to move products from Europe into Nigeria. That goes away; you have access to this product because there’s no disruption in the supply chain. You have a short time to regulate and move around, so it gives you security of supply. This is the number one thing it does.

“Secondly, it creates a market around it for employment, taxes, and so many other benefits that will come to the country.”

He corrected another popular misconception around the pricing of refined petroleum products, saying that the prices of refined products, regardless of area of production, are determined by the international market.

“Therefore, at the gate of your refinery, you are pricing it as if you are getting it from Rotterdam or Amsterdam; that means the conversion of FX that determines the market value is determined by the international market,” he said.

“But there will be a delta; that delta is the cost of freight that builds up in your country. You will see a difference in price as a result of the freight difference,” he added.

News Power
September 28, 2022 No Comments

Hungary says Russia to deliver more extra gas

Hungary said Wednesday that Russian energy giant Gazprom will further increase natural gas deliveries to the EU member in September and October.

The announcement by Hungarian Foreign Minister Peter Szijjarto comes as Moscow has reduced or halted deliveries to most European nations which have slapped sanctions on Russia over its invasion of Ukraine, sending both gas and energy prices soaring.

Following a July visit to Moscow by Szijjarto, Gazprom supplied Hungary with an additional volume of 2.6 million cubic metres per day in August “above the already contracted quantities”.

Now “an agreement has been reached” with Gazprom for additional supplies in September and October, said Szijjarto in Prague after a meeting of EU counterparts.

The additional volume “is now increased to 5.8 million cubic metres (per day) from September 1st,” he said in a video posted on his Facebook page.

Like in August, the gas will arrive via the TurkStream pipeline which passes through Turkey, Bulgaria, and Serbia.

The increase further bolsters Hungary’s energy supply security and means that Hungary will not have to introduce supply restrictions due to lack of gas, he added.

“Hungary’s energy supply is safe,” said government spokesperson Zoltan Kovacs in a Twitter message after Wednesday’s announcement.

The agreement follows the start Wednesday by Gazprom of a three-day suspension of gas deliveries to Germany via a major pipeline in the latest in a series of halts or reductions of supplies to European countries.

Prices have soared and EU nations are adopting measures to reduce gas consumption amid concerns of shortages this coming winter that could force rationing supplies to industrial customers.

Since Russia’s invasion of Ukraine Budapest has sought to hold a broadly neutral stance amid accusations by some EU allies of a pro-Russian tilt.

Hungary, which largely depends on Russian oil and gas, has dismissed the idea of any EU sanctions on Russian gas.

It also secured an exemption from EU sanctions on Russian crude oil imports via pipelines after Prime Minister Viktor Orban said it would be like a “nuclear bomb dropped on the economy”.

News Uncategorized
September 28, 2022 No Comments

Russia has halted gas deliveries to Germany

Russia has halted gas deliveries to Germany via a key pipeline for an indefinite period after saying Friday it had found problems in a key piece of equipment, a development that will worsen Europe’s energy crisis.

Russian gas giant Gazprom said Friday that the Nord Stream pipeline due to reopen at the weekend would remain shut until a turbine is repaired.

In a statement, Gazprom indicated it had discovered “oil leaks” in a turbine during a planned three-day maintenance operation.

Gazprom added that “until it is repaired… the transport of gas via Nord Stream is completely suspended”.

Resumption of deliveries via the pipeline which runs from near St Petersburg to Germany under the Baltic Sea had been due to resume on Saturday.

Gazprom said it had discovered the problems while carrying out maintenance with representatives of Siemens, which manufactured the turbine in a compressor station that pushes gas through the pipeline.

On its Telegram page, it published a picture of cables covered in a brown liquid.

Earlier in the day, the Kremlin warned the future operation of the Nord Stream pipeline, one of Gazprom’s major supply routes, was at risk due to a lack of spare parts.

“There are no technical reserves, only one turbine is working,” Kremlin spokesman Dmitry Peskov told reporters.

“So the reliability of the operation, of the whole system, is at risk,” he said, adding that it was “not through the fault” of Russian energy giant Gazprom.

Following the imposition of economic sanctions over the Kremlin’s invasion of Ukraine, Russia has reduced or halted supplies to different European nations, causing energy prices to soar.

The Kremlin has blamed the reduction of supplies via Nord Stream on European sanctions which it says have blocked the return of a Siemens turbine that had been undergoing repairs in Canada.

Germany, which is where the turbine is located now, has said Moscow is blocking the return of the critical piece of equipment.

Berlin has previously accused Moscow of using energy as a weapon.

The announcement by Gazprom comes the same day as the G7 nations said they would work to quickly implement a price cap on Russian oil exports, a move which would starve the Kremlin of critical revenue for its war effort.

Gazprom also announced the suspension of gas supplies to France’s main provider Engie from Thursday after it failed to pay for all deliveries made in July.

– ‘Much better position’ –
As winter approaches, European nations have been seeking to completely fill their gas reserves, secure alternative supplies, and put into place plans to reduce consumption.

A long-term halt to Russian gas supplies would complicate efforts by some nations to avoid shortages and rationing, however.

Germany said Friday its gas supplies were secure despite the halt to deliveries via Nord Stream.

“The situation on the gas market is tense, but the security of supply is guaranteed,” a spokeswoman for the economy ministry said in a statement.

The spokeswoman did not comment on the “substance” of Gazprom’s announcement earlier Friday but said Germany had “already seen Russia’s unreliability in the past few weeks”.

German officials have in recent times struck a more positive tone about the coming winter.

Before the latest shutdown, Chancellor Olaf Scholz said Germany was now “in a much better position” in terms of energy security, having achieved its gas storage targets far sooner than expected.

Europe as a whole has also been pushing ahead with filling its gas storage tanks, while fears over throttled supplies have driven companies to slash their energy usage.

Germany’s industry consumed 21.3 percent less gas in July than the average for the month from 2018 to 2021, said the Federal Network Agency.

Agency chief Klaus Mueller has said such pre-emptive action “could save Germany from a gas emergency this winter”.

Europe as a bloc meanwhile has been preparing to take emergency action to reform the electricity market in order to bring galloping prices under control.

Fear of shortages of natural gas has driven futures contracts for electricity in France and Germany to record levels.

European consumers are also bracing for huge power bills as utilities pass on their higher energy costs.

News
September 28, 2022 No Comments

Osinbajo: Why Nigeria should benefit more from its gas reserves

The use of gas as a transition fuel will not only help in stemming deforestation but advance Nigeria’s broader development goals, the Vice President, Prof. Yemi Osinbajo has said.

Stating that the country has one of the largest gas reserves in the world, he believes other developing countries will also benefit from the adoption of gas as a transition fuel.

Osinbajo stated this on Tuesday night when he received the U.S. Special Presidential Envoy on Climate Change, John Kerry, at the Presidential Villa in Abuja.

Kerry, who was on a working visit to Nigeria, had met with President Muhammadu Buhari prior to his meeting with Professor Osinbajo, the Vice President’s spokesman, Laolu Akande, said in a statement on Wednesday.

The Vice President, at the meeting with Kerry and the US delegation, highlighted the need for Nigeria to continue the exploration and use of gas as a way of arresting deforestation, transiting away from dirtier fuels like diesel, kerosene, and petrol, while at the same time ensuring that the country has the necessary energy baseload for industrialisation.

He pointed out that Nigeria has one of the largest gas reserves in the world and should benefit from its exploitation, and highlighted the significance of Nigeria’s Energy Transition Plan, which is the first in Africa.

Professor Osinbajo had discussed the Energy Transition Plan during his recent visit to Washington D.C., where he met with his American counterpart, Kamala Harris, at the White House, among other top US government officials.

Before the recent US trip, the Federal Government had launched the Energy Transition Plan at a global virtual event.

In addition to a review of the Energy Transition Plan, including a discussion about its implementation, both the Vice President and Kerry also discussed the issues of renewable energy sources and the global transition.

In his remarks, the US envoy praised the plan and the efforts already being made in Nigeria to step up the use of renewables, especially solar and hydropower, as major components of the energy mix.

While acknowledging that Nigeria ought to benefit from its gas reserves, Kerry urged an even more rapid adoption of renewables, especially electric vehicles which are certainly the next wave in auto manufacturing.

He observed that the technology of renewables keeps improving daily, adding that batteries are already in production which last far more than those that are now on the market.

Upon a request by the Vice President, the Special Envoy promised to assist Nigeria with the necessary expertise to scientifically determine the most appropriate energy mix that would move the country toward the goal of energy for all by 2030 and net zero carbon emissions by 2060, without compromising the country’s energy security.

He also affirmed the readiness of the US government to assist Nigeria in a bilateral partnership to realise its climate change adaptation and resilience capacity, thereby consolidating the nation’s place as a model for other countries on the planet.

Kerry said he looked forward to Nigeria presenting an inspiring position, which would no doubt attract all necessary global support at the upcoming COP 27 in Egypt later in the year.

He was accompanied by other US officials, including the American Ambassador to Nigeria, Ms Mary Beth Leonard.

News Power
September 20, 2022 No Comments

NNPC, TotalEnergies commission model school project in Makurdi

The Nigerian National Petroleum Company Limited, NNPCL, TotalEnergies, operators of OML 130 and partners,SAPETRO, CNOOC & PRIME 130, have constructed and commissioned a model secondary school project at Government College, Makurdi in Benue State as part of their corporate social responsibilities to different communities in Nigeria.

The two floors model secondary school sits on 2,500m2 and is expected to provide the students access to modern-day learning and science experimentation tools.

The school facility is powered by an integrated power supply system consisting of a 35kva solar power generating system, and one 50kva soundproof generator to ensure continuous power supply.

In his welcome address, the Chief Upstream Investment Officer of the NNPC Upstream Investment Management Services, Mr. Bala Wunti, who was represented by Mrs Bunmi Lawson said that the project was part of efforts to mitigate various identified gaps.

He noted that the projects aligned with sustainable development goals, adding that the partners would continue to champion the implementation of SDGs.

“These projects were borne out of the need to mitigate the various identified gaps in line with the relevant Sustainable Development Goals (SDGs). We will continue to consistently champion the implementation of Sustainable Community Development projects that will positively impact the lives of the citizens of this Country.”

Managing Director of TotalEnergies EP Nigeria Limited, Mike Sangster, who was represented by Mr. Lucky Deekor, revealed that in line with his company’s commitment to promoting youth education, TotalEnergies believe that the school project will provide students access to modern-day learning, science experimentation tools and ignite their interest in the study of the STEM courses.

Giving an overview of the project, Sangster said that the school project includes a well-designed administrative block with furnished offices, a sick bay, a first aid room and storage facilities.

“The project we are commissioning today includes all the necessary components for a modern school. These include a well-designed administrative block with 4 fully furnished offices, a sick bay, and a first aid room with all its appurtenances and storage facilities.

“Among other great features, the main school block has 2 floors, 10 offices for teachers and technical rooms, 12 furnished classrooms, 5 cutting-edge science laboratories, two libraries and 1 fully equipped ICT laboratory.

The principal of Government College, Makurdi, Mrs. Aumbur Agena, thanked Total Energies and all other partners for their support in the building of the facility, adding that the intervention to build the facility will provide a better learning environment for the students.

“I thank NNPCL, TotalEnergies and their partners for finding the school worthy to be part of the CSR project. Their commitment to the completion of the project is commendable. The project will solve one of our big problems: providing a better learning environment for the students. I also appeal to the government of Benue state to provide us with a school bus for easy student commute.”

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.”

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