News

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.

News

Niger Delta minister says region contributes 80% of nation’s resources

Minister of State for Niger Delta Affairs, Sen. Omotayo Alasoadura, has said the region contributes over 80 per cent of the nation’s resources and about 95 per cent of foreign exchange earnings.

Alasoadura, who stated this yesterday in Texas, United States of America (USA) while speaking on investment opportunities in the Niger Delta Region, told the audience that over 95 per cent of oil and gas activities in Nigeria take place in the Niger Delta.

According to the minister, the region is home to three refineries, a liquefied natural gas plant, a petrochemical complex, a steel plant and an aluminium smelting company and a large fertiliser company.

“Furthermore, the region hosts a number of oil-servicing companies, in addition to the oil majors operating in the area and some local oil exploration companies. It also has an Export Processing Zone and an Oil and Gas Free Zone. He added.

Alasoadura further disclosed that the region warehouses massive oil and gas deposits with average productivity of about 2.5 million barrels per day, including condensates.

“Today, the total recoverable reserves of oil and gas are estimated at about 34.5 billion barrels and 93.8 trillion cubic meters, respectively, he added.

He said the aim of the summit is to forge international economic cooperation for investment in the Niger Delta, adding that the summit will help to build institutional exchanges and promote foreign direct investments.

According to him, it is also an opportunity for Nigeria to explore avenues for the diversification of the economy as well as the provision of an effective bilateral opportunity between the private and public sectors of both nations.

With the summit, the minister noted that the nation stands a chance to attract investors and investments from the USA into the economy.

Source: Guardian 

News

Oil giant Shell strikes deal to buy power from ‘world’s largest offshore wind farm’

Shell said Wednesday it had signed a deal to purchase power from a development dubbed “the world’s largest offshore wind farm.”

The 15-year power purchase agreement relates to 240 megawatts from Dogger Bank C, the third and final phase of the 3.6 gigawatt Dogger Bank Wind Farm, which will be located in waters off the coast of northeast England.

The agreement builds upon a previous deal to purchase 480 MW from Dogger Bank A and B, meaning that its combined offtake will amount to 720 MW.

On Wednesday, Dogger Bank Wind Farm announced it had also agreed 15-year power purchase agreements for Dogger Bank C with Centrica Energy Marketing & Trading, SSE Energy Supply Limited and Danske Commodities.

“The commercial power agreements provide a route to sell the green energy generated by the third phase of the wind farm into the GB electricity market when it enters commercial operation,” it said.

Dogger Bank A and B represents a joint venture between Equinor, SSE Renewables and Eni, with the companies holding stakes of 40%, 40% and 20% respectively.

This month, it was announced Eni would also acquire a 20% stake in Dogger Bank C, with Equinor and SSE Renewables each holding on to a share of 40%. This deal is slated for completion in the first quarter of 2022.

“Once the three phases are complete, which is expected by March 2026, Dogger Bank will be the largest offshore wind farm in the world,” Dogger Bank Wind Farm says.

Despite making deals related to renewable energy, Shell remains a major player in oil and gas. It has pledged to become a net-zero emissions energy firm by 2050.

In February, the business confirmed its total oil production had peaked in 2019 and said it expected its total carbon emissions to have peaked in 2018, at 1.7 metric gigatons per year.

In a landmark ruling earlier this year, a Dutch court ordered Shell to take much more aggressive action to drive down its carbon emissions and reduce them by 45% by 2030 from 2019 levels.

The verdict was thought to be the first time in history a company has been legally obliged to align its policies with the 2015 Paris Agreement. Shell is appealing the ruling, a move that has been sharply criticized by climate activists.

In October, billionaire activist investor Dan Loeb called on the business to break up into multiple companies to strengthen its performance and market value.

Shell acknowledged Loeb’s letter to clients calling for the company to split, saying it “regularly reviews and evaluates the Company’s strategy with a focus on generating shareholder value. As part of this ongoing process, Shell welcomes open dialogue with all shareholders, including Third Point.”

More recently, in mid-November, Shell said it would move its head offices to the U.K. from the Netherlands, and ditch its dual share structure. Under these plans, the firm’s name would change from Royal Dutch Shell plc to Shell plc.

“The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” Andrew Mackenzie, the company’s chair, said at the time.

Source: CNBC

Industry News

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.

News Power

Operators advise government against imposing VAT on cooking gas

The Oil and Gas Service Providers Association of Nigeria, OGSPAN, has urged the Federal Government not to impose the Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG), otherwise known as cooking gas.

According to OGSPAN, the planned imposition of VAT on LPG would stifle demand, utilisation, investment and growth of the sector in the country.

The National President, OGSPAN, Mazi Colman Obasi in a statement, stated: “As a stakeholder in the sector, we were delighted when the Federal Government, previously excluded operators in the LPG sector from paying the VAT.

“We were even more delighted when it declared January 1, 2021, to December 31, 2030, as ‘The Decade of Gas Development for Nigeria’ with emphasis on LPG.

“Specifically, the official launch of THE DECADE OF GAS was declared by the President of Nigeria, His Excellency Muhammadu Buhari GCFR, on Monday, 29th March 2021, also recognised 2021 as a Year of Gas.

“However, having taken these steps, we were shocked to learn that the Federal Government is currently considering imposing VAT, targeted at increasing its revenue.”

According to OGSPAN, a Presidential directive was issued July 11, 2005, to remove VAT on LPG. But the approved memo erroneously had the word “import” left on it, because at the time imports were the only source of gas.

He explained that this meant that the Federal Inland Revenue Service (FIRS) charged VAT on locally produced LPG but there was no output VAT, so the VAT cost was absorbed as a loss by industry players.

He noted that Industry operators fought for 14 years to reverse this situation and the Minister of Finance, finally removed the VAT on “domestically produced gas” under a gazette issued in 2019, thus stopping the FIRS from charging VAT on LPG under a loophole that was created in error.

“The FIRS itself under several subsequent letters advised companies that neither input nor output VAT was payable on LPG in line with other petroleum products. Industry operators and experts had warned at the time that insertion of the phrase “locally produced” in front of LPG would lead to the reverse case through this legal loophole and yet again, another round of needless quagmire.

“Experts have repeatedly pointed out that of all the petroleum products listed in that gazette, why was LPG singled out for the phrase “locally produced?” Why not gasoline, and diesel, which we don’t produce and yet import over 100 times more quantity than LPG.

“The FGN recently launched a drive for Autogas using LPG/propane. How can the gas industry grow Autogas when VAT is applied to increase gas cost but a humongous tax subsidy remains on the competing gasoline/PMS? Who is going to switch when gas prices are increasing as a result of this needless tax?’

“For too long, the LPG sector had suffered from many problems, including policy inconsistency, inadequate funding, and low domestic utilisation, which needs to be fully addressed by the current administration”, he added.

He also disclosed that the planned introduction of VAT on LPG could culminate in the reversal of gains already made in the Federal Government Gas Expansion Programme, targeted at achieving rapid development of the sector.

According to him, while a litre of government subsidised petrol, under extant price regime, actually retails for between N165 and N200 per litre, depending on different parts of the country, the average deregulated retail price per litre of LPG delivered to Abuja – FCT falls between N100/Litre for propane specification to N195/Litre for butane specification.

“The cheaper of the two, being Propane spec LPG, is the industry-approved standard for Autogas in Nigeria, which portends huge savings for families and businesses.

“Autogas use with deep market penetration with a reasonable switch from PMS and AGO will save Nigeria huge foreign exchange spend on fuel importation; expand Nigeria’s domestic energy mix with improved accessibility for LPG as a cleaner and cheaper energy source with multiple applicable uses.

“This will in great measure help the consumers especially the low-income Nigerian families with their fast-eroding purchasing power in an increasingly difficult economic environment.

“Apart from savings on the unit price per litre or kg of gas, there is also much savings on gas, with respect to engine servicing and overall maintenance cost, compared to petrol or diesel engine maintenance cost. And it is environmentally friendlier than petrol and diesel, in terms of greenhouse gas emissions”, he said.

He added: “Autogas use will help trigger the much-needed demand intensive use of gas, with the multiplier benefit effect on improved in-country production and supply sources, with the attendant reduction in gas flaring, with a marked increase in foreign direct investments in LPG production plants, trading and distribution infrastructure and equipment manufacturing in Nigeria, which has been on the decline in recent years.”

News Power

FG attracts $16.6 billion foreign investments to trade zones in 20 years

The Oil and Gas Free Trade Zones Authority has stated that it attracted $16.6bn foreign direct investment into the economy within a 20-year period spanning 2001 to 2020.

During the same period, the Authority also attracted N255.33bn local investments into the country.

The Managing Director of OGFZA, Okon Umana, disclosed this during an interview with journalists in Abuja, on Sunday.

He added that between January and May this year, OGFZA generated N9.41bn as revenue through the free trade zones.

A breakdown of the revenue revealed that N2.1bn was generated in January, while February, March, April and May had N1.45bn, N4.39bn, N1bn and N453.98m respectively.

He said this was achieved through dedicated leadership as well as the commitment and exceptional quality of members of staff of the authority.

This, he stated, had resulted in huge interests by both local and foreign investors in the zones.

The OGFZAs boss stated that currently, there were about N6.1bn investments that were expected to materialise in the Liberty Oil and Gas Free Zone.

He said: “To grow investment also means looking at the structures within our zones because as I said, you can only attract Foreign Direct Investment if you are globally competitive.

“We took a number of steps; we reviewed our standard of operation, and we came out with a timeline for delivery of our services.

“For example, in the past, we did not have a specific timeline for renewal of licence or to reissue new licences or even to process cargos.

“We came up with specific timelines – we say for example that we will take only 48 hours to clear cargos if the cargos were consigned in Free Zones.

“It will take seven days to renew the licence when all the requirements have been met and 21 days to issue a new licence under the same circumstances.”

In terms of job creation, the OGFZA boss stated that the investments have been able to unlock many direct and indirect jobs thereby empowering many Nigerians.

He said between 2005 and 2015, the authority had created 40,508 direct jobs and indirect jobs with conservative estimates at about 160,000.

He said, “These incentives are applied for activities within zones meaning that when they move items from the zone to any other place, all the taxes will be applied.”

Umana added that between 2005 and 2015, the authority created 40,508 direct jobs with indirect jobs conservatively estimated at 160,000.

News

Nigeria’s oil output drops 11.47% to 1.343mbpd in Q2 – OPEC

Nigeria’s oil output dropped by 11.47 per cent year-on-year, YoY, in the second quarter of 2021 (Q2’21).

But the decline also showed significant under-production against the quota, Organisation of Petroleum Exporting Countries, (OPEC) data have shown.

In its July 2021 Monthly Oil Market Report (MOMR), obtained by LEADERSHIP, OPEC disclosed that on the average, the nation produced 1.343 million barrels per day in Q2’21 compared to 1.517 mb/d produced in Q2’20. This also compares negatively with the OPEC quota of 1.4 mb/d.

Specifically, the report has it that the country produced 1.372 mb/d, 1.344 mb/d and 1.313 mb/d, in April, May and June, 2021 respectively, compared to 1.705 mb/d, 1.436 mb/d and 1.411 mb/d, produced in the corresponding months of 2020.

At the Q2’21 average output the country requires about 500 mb/d output of condensate to meet its 2021 budgetary target of 1.8 mb/d. But currently the estimated condensate output is put at 400 mb/d, indicating a likely significant shortfall.

However, the shortfall may not affect revenue estimates since the 2021 oil revenue was based on oil price of $40 per barrel, while actual price in recent weeks have hovered above $70 per barrel.

Meanwhile the OPEC report, which painted a bright prospect for the oil market in the remaining part of 2021, stated: “World oil demand growth in 2021 is forecast at 6.0 mb/d, unchanged from last month’s assessment, although there have been some regional revisions. Total oil demand is projected to average 96.6 mb/d.

“The Q1’21 was revised lower, amid slower than anticipated demand in the main Organisation for Economic Co-operation and Development (OECD), OECD consuming countries. This was counter-balanced by better-than-expected data from OECD Americas in Q2’21, which is now projected to last through the Q3’21.

“Solid expectations exist for global economic growth in 2022. These include improved containment of COVID-19, particularly in emerging and developing countries, which are forecast to spur oil demand to reach pre-pandemic levels in 2022.”

Meanwhile, Nigeria’s crude oil exports fell by a whopping 41.9 per cent year-on-year in the first quarter of 2021. This is according to data contained in the Central Bank of Nigeria’s balance of payment report.

Nigeria received in its current account, crude oil and gas export proceeds of $6.48 billion in the first quarter of 2021 compared to $11.1 billion in the corresponding period in 2020. It also represents a 16.4 per cent drop when compared to the $7.7 billion recorded in the 4th quarter of 2020.

Crude oil and gas export proceeds of $54.5 billion in 2019 made up about 84 per cent of the government’s export earnings. However, crude oil and gas exports declined to $31.4 billion in 2020 as Covid-19 pandemic triggered a global economic lockdown crashing oil prices to below zero in the second quarter of 2020.

OPEC member countries have had to endure year-long collective crude oil cuts to help limit supplies, shoring up prices. While this has contributed to the stabilisation of oil prices, member countries have seen their revenues plummet as they cannot push out as much volumes as they would have preferred.

Nigeria is currently pegged to an export volume of about 1.4 million barrels per day, remarkably less than the 1.8 million barrels per day production volume that it has averaged over the years and a far cry from its 2.5 million barrels per day production capacity.

According to a presentation on the 2021 budget performance by Nigeria’s minister of finance, Dr Zainab Ahmed, Nigeria has abided by the OPEC+ cut despite this production capacity.

However, crude oil production is projected to increase to 1.86 million barrels per day in 2021, as economies recover from the recession, and moderated by OPEC+ quota agreements, as stated by the minister of finance.

It is worth noting that, apart from the decline in Nigeria’s crude oil production, earnings were also affected by the inability of India to buy as much crude from Nigeria.

 

Source: Leadership

Industry News Production

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.

News Power

NNPC says to expect petrol from Port Harcourt Refinery after 18 months

The Nigerian National Petroleum Corporation (NNPC) said on Monday that the Port Harcourt refinery being rehabilitated for $1.5 billion will start refining gasoline (petrol) within 18 months of the project.

The Group Managing Director (GMD), NNPC, Mele Kyari, who said this in Abuja on Monday, clarified that the approved fund was for complete rehabilitation and not turnaround maintenance.

According to a report by the News Agency of Nigeria (NAN), Kyari said: “During rehabilitation, by the 18th month, part of this plant will begin to produce particularly the gasoline plants.

“What it means in a technical sense is that in 18 months, we will see production coming from that plant; we will follow it plant by plant until we are completely done,” Kyari said.

The NNPC GMD also said that the process of rehabilitation started about 10 years ago but was slowed down due to a number of mistakes and interferences.

He was hopeful the refinery would work optimally for the next 15 years after the rehabilitation.

Source: Daily Trust

News Power Production

Dangote expects Lagos refinery to be completed by end of 2021

President, Dangote Group, Alhaji Aliko Dangote yesterday said the multi billion dollars and 650,000-barrel per day (bpd) integrated refinery and petrochemical project will be completed by the end of this year, just as granulated urea fertiliser plant at Ibeju Lekki corridor will begin production of fertiliser products next week.

This was even as the Lagos State Governor, Mr Babajide Sanwo-Olu promised to support the ongoing multi-bilion dollars investments on the axis with massive road infrastructure to further open up the economy of the axis and create a more conducive environment for the industries springing up in the area.

The duo spoke with journalists during Governor Sanwo- Olu’s two-day working visit to the Lagos Free Zone, saying that the investments would turn around the state and the nation’s economy.

Speaking on the economic potential of the refinery, Dangote also added that though the Africa’s biggest oil refinery and the world’s biggest single-train facility expected to generate about 230,000 indirect jobs would be completed by the end of this year, production of petroleum products would commence by first quarter of 2022.

The Africa’s richest man disclosed this while fielding questions from journalists after the tour of the project by the Lagos State Governor, Mr. Babajide Sanwo-Olu who went on a two – day working visit with members of his cabinet to the burgeoning industrial hub located in Lekki area of the state. He also stated that the granulated urea fertiliser plant at Ibeju Lekki corridor will commence production of fertiliser products next week.

He said: “OK the fertilizer you will actually see fertilizer within the next one week. The refinery will be finished by the end of this year and product will start coming out by first quarter of next year. ”

He commended the governor for finding time out to visit the refinery during his working visit, saying: “First of all let me thank His Excellency for taking off about five hours to be with us today.

The governor has been around this area for the past two days. Really Mr. Governor we are very grateful for your support for making this place to be investors friendly and all the support you have been giving. Not only to Dangote but to almost everybody and I can assure that this place will be the hub of industrialisation in the country going forward.

On his part, Governor Sanwo-Olu said there is urgent need to assess the level of investment on the Lekki Corridor, saying efforts were being made to address the issues the investors are facing and avert haphazard development in the new Industrial hub informed the working visit.

Sanwo-Olu said the development of Lekki Port being propelled by the operators and owners of Lagos Free zone has gone up to about 60 per cent , saying the state government would ensure that the problems being experienced in Apapa port.

To regulate and guide against haphazard development, Governor Sanwo-Olu said agencies of government would be located in the axis to ensure that the right things are done.

“The ministry of Environment, Physical Planning, Waterfront and Tourism would also have a full presence here.

Physical planning are things we cannot afford to miss out. We need to ensure that the master plan of this area is kept and the new ones we need to look at we will certainly pick them up for approvals that is required so that government can indeed take the position,” he said.