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FG spent N9tr in oil subsidy in 10yrs – PPPRA

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FG spent N9tm in oil subsidy in 10yrs – PPPRA

Petroleum Products Pricing Regulatory Agency PPPRA has disclosed that the Federal Government has spent a total of N8.94 trillion on oil subsidy between 2006 and 2015. This was disclosed in a document on subsidy payment released in Abuja on Tuesday.

It said that the subsidy was paid to oil marketers and the Nigerian National Petroleum Corporation (NNPC) in the period under review. A breakdown of the money indicated that in 2006 a total of N257.36 billion was paid, in 2007, N271.51 billion while in 2008 N630.57 billion was paid to marketers.

Petroleum Support Fund Chart 2006 2016

[Also Read] No More Fuel Subsidy In Nigeria – NNPC GMD

Also, oil marketers in 2009 were paid N409.31 billion and N667.08 billion in 2010 respectively as subsidy claims,” it said.

The document further revealed that in the year 2011, federal government paid a total of N2, 105.92 trillion an increase of N1,437.84trillion from 2010 payment.

The PPPRA in the document noted that in 2012, N1.35 trillion was paid as subsidy, the highest in the period under review. “A total of N 1, 316.63 trillion in 2013, N1,217.35 trillion in 2014 and N653.51 billion in 2015 was paid as subsidy claims, “it added.

[Also Read] Low Oil Price: Opportunities In The Midst Of Challenges

It noted that the NNPC since 2016 had being the sole importer of the product to the country. It assured that subsequent releases would revealed the amount paid on subsidy before the deregulation of the downstream oil sector.

Orient Energy Review

More Nigeria Oil and Gas Industry News on Orient Energy Review.

Alles Charis Launches NYSC Internship Programme for Young Professionals

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Alles Charis, a leading provider of liquefied petroleum gas (LPG) solutions in Nigeria, has launched its internship programme for National Youth Service Corps (NYSC) members.

The initiative which is aimed at providing young professionals with valuable work experience and skills development opportunities reflects the company’s dedication to nurturing talent and fostering career growth.

Committed to fostering talent innovation amongst Nigerian Youths, the oil and gas firm in a statement made available to Orient Energy Review said the internship programme will take place across its offices in Abuja, Ondo and Port Harcourt.

“Our NYSC Internship Programme is designed to empower young professionals during a critical phase of their careers and contribute to the development of a skilled workforce,” said Adaugo Kanu, Head of People at Alles Charis.

“The National Youth Service Corps (NYSC) Internship Programme by Alles Charis is designed to support and empower young graduates during their mandatory one-year service in Nigeria.

“The initiative is aimed at providing young professionals with valuable work experience and skills development opportunities.

Adding that the initiative reflects Alles Charis’ dedication to nurturing talent, fostering career growth, and contributing to the professional development of the nation’s youths.

It further stated that “the NYSC Internship Programme will offer selected participants the chance to work closely with experienced professionals across various departments and business units within Alles Charis.

“Through hands-on training, mentorship, and exposure to real-world projects, interns will gain practical knowledge, enhance their skills, and build a strong foundation for their future careers.

“Key features of the NYSC Internship Programme includes, diverse experience which will present the interns with the opportunity to rotate through the different departments and business units.

“Thus, allowing them to explore various areas of interest and gain a comprehensive understanding of Alles Charis’s operations.

Providing further details, it disclosed that programme will offer also mentorship and guidance, professional training and networking opportunities to the corps members.

“The interns will be assigned to managers who will provide guidance, support, and constructive feedback throughout the internship period. Mentors will help interns set goals, develop professionally, and navigate their career paths.

“Alles Charis will organise training sessions and workshops to equip interns with essential skills such as communication, problem-solving, and teamwork. These sessions will enhance their employability and prepare them for future endeavors.

Adding that “the interns will have the chance to network with professionals from diverse backgrounds. These connections can pave the way for future collaborations and career opportunities.

“We believe in the power of investing in young talent and providing them with the right opportunities to grow and succeed.

Alles Charis invites eligible graduates enrolled in the National Youth Service Corps to apply for the NYSC Internship Programme. Interested candidates can submit their applications using this link: Alles Charis NYSC Internship Programme

About Alles Charis: Alles Charis Gas Limited is a leading operator within the downstream sector of the Nigerian Oil and Gas Industry specializing in the retail, distribution and storage of liquefied petroleum gas (LPG), propane and butane for household and commercial use across Nigeria.

It operates a network of nine (9) conveniently located retail stations across various neighborhoods and commercial areas.

These stations serve as distribution hubs, providing easy access to our customers for refills and exchanges.

With a growing presence in the market , Alles Charis Gas is establishing itself as a trusted provider of high-quality LPG and associated services.

Senior HSE Officer at Shoreline Natural Resources Limited

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Shoreline Natural Resources was incorporated on 10th December 2010. The company is a joint venture between Shoreline Power Company Limited, a Nigerian Company which has extensive interests in the power sector together with a strong network of relationships and Heritage Oil Shoreline Natural Resources (Nigeria) B.V, a subsidiary of Heritage Oil Limited.

Job Type: Full Time
Qualification: BA/BSc/HND
Experience: 10 years
Location: Lagos
Job Field: Safety and Environment / HSE
Application Deadline: Not Specified

Responsibilities

Provides assistance with formal investigation of incidents and assessment of risk providing procedures and training to prevent future occurrences when required. Ensure identified actions are tracked to closed.

  • Provide and manage consistent high-quality HSSE development work and services, and for Safety relating to onsite safe systems of work and to Technical Integrity in compliance with the Operating standards.
  • Monitor, review, and report HSSE performance of the Operator, main contractors, and subcontractors to achieve the performance commitments.
  • Drive and coordinate delivery of quality HSE expert advice, support, and services for Safe work systems.
  • Carry out specific HSSE-MS implementation tasks and support all activities required to Ensure Safe Production.
  • Monitor and advise GM technical, the site, and the Operator on HSE issues especially resulting from activities on site.
  • Cascade Learning from Incidents, best practices, drive implementation of HSE practices according to company guideline
  • Seek to continuously improve HSE risk identification, assessment, and reduction in the location.
  • Execute the location waste management and evacuation plan.
  • Manage and Coordinate HSE Performance Measurement to ensure consistency in data reporting and interpretation.
  • Support the build-up and delivery of HSSE plans towards realization of continuous improvement of HSE performance in the location.
  • Test and maintain Area Emergency response procedures and plans.
  • Develop and Deliver HSSE training for staff and contractors to ensure practices are in full compliance to the safe systems of work at site.
  • Assists with the identification of HSSE training needs for the company and organizes delivery of training.
  • Conducts regulatory inspection (e.g., Statutory facility inspections, chemical storage, eye wash stations, fire extinguishers, lifting straps, ladders etc.).
  • Participates in industry Health, Safety & Environmental professional group(s) and maintain a current knowledge of industry HSSE direction and standards (agency & client).

Knowledge and Experience

  • Science or Engineering degree with at least 10 years relevant experience
  • Seasoned HSSE Professional with experience managing HSSE risk in the oil & Gas industry.
  • Able to develop and implement industry policies, strategies, and standards.
  • NEBOSH certification will be an advantage.

Method of Application

Interested and qualified? Go to Shoreline Natural Resources Limited on shoreline-natural-resources-limited.breezy.hr to apply.

Total, BP Lead Other Revolutionaries In UK’s Decarbonization Plot

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…13 Win Wind Power Contracts To Decarbonize North Sea Oil Operations

Thirteen firms have won contracts from Crown Estate Scotland, for offshore wind leases to support North Sea oil and gas decarbonization.
The companies include British and French majors, BP and TotalEnergies respectively.

Last Friday, Crown Estate Scotland, an independent commercial organization responsible for managing the British seabed, announced that it had awarded leases to 13 companies, including Big Oil’s BP and TotalEnergies, and several UK renewable firms.

According to the mandates, the companies will develop offshore wind projects to supply power primarily to North Sea oil and gas platforms to reduce the sector’s emissions.

The report said out of 19 bidders, the 13 selected companies will commence offshore wind development work with an initial combined investment of approximately £260 million ($317.28 million).

Also Read: FG Flaunts Scorecard On Maritime, Cross Border Oil Related Crimes Fight In 5yrs

Flotation Energy and Cerulean Winds are set to be the largest investors in this endeavor, with investments of nearly £96 million and £138 million, respectively.

BP’s Alternative Energy Investments division is slated to initially invest £1,670,917, while TotalEnergies will contribute £200,000 towards developing these projects. Crown Estate Scotland aims to attract investment in innovative offshore wind initiatives in Scottish waters through a leasing process known as INTOG (Innovation and Targeted Oil and Gas).

The primary goal of this strategy is to help decarbonize North Sea operations. Crown Estate Scotland has said that the maximum capacity for all awarded projects is 5 gigawatts (GW), with an additional 500mw allocated for smaller, more innovative projects.

Successful bidders will be offered a seabed lease with a term ranging from 25 to 50 years. As a global leader in wind power, the United Kingdom experienced a record-breaking year in 2022, with wind energy supplying over 25% of the nation’s electricity, according to the National Grid.

Also Read: Nigeria’s Oil Roam EU International Waters, Searching For Buyers

Offshore wind, the largest renewable energy source in Britain, has the potential to power approximately 40% of UK households, as stated by the Crown Estate.

Developing offshore wind projects to provide clean energy for North Sea oil and gas platforms is a significant step towards achieving the UK’s decarbonization goals.

This innovative approach aims to reduce the environmental impact of oil and gas operations while simultaneously promoting the growth of renewable energy industries.

The offshore wind leases to 13 companies, including BP, TotalEnergies, and various UK renewable energy firms, highlight the country’s dedication to reducing emissions from the oil and gas sector.

Also Read: UK Residents Warned To Prepare For Tight Power Supply

With an initial combined investment of around £260 million, these innovative projects are expected to contribute to the decarbonization of North Sea operations significantly.

Protests Escalate In France, Force Exxon To Shut Down Operations

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Tolls are beginning to fall in Frances’ energy sector with the lingering strike action by protesting workers. An extension of the current strikes at France’s Le Havre port has cut off crude oil deliveries to ExxonMobil’s nearby Port Jerome refinery, according to the CGT trade union.

Argus said the 236,000bpd Exxon’s Port Jerome refinery, in northern France—and the Gravenchon petrochemicals plant will stop operations today, Argus quoted the CGT.

The refinery was originally expected to close earlier this week as the strikes drug on, but the refinery reportedly received a shipment of rude oil from Libya.

TotalEnergies’ Gonfreville refinery also shut down earlier in the week—a refinery producing 246,90 barrels per day. Four workers from this refiner were tasked by police to release jet fuel stocks last night, intended for airports in Paris.

Also Read: Four Of France’s 6 Refineries To Shut Down Operations Today As Protests Escalate

Other refineries in France that are shuttered are Total’s 219,000 bpd Donges refinery and Petroineos’ 207,000 bpd Lavera refinery. Strikes have shut down the refineries as French President Emmanuel Macron pushed through a controversial pension reform without a vote in Parliament under parliamentary clause 49:3.

The pension reform would raise the retirement age in France by two years, to age 64. The strikes have disrupted power supply, refining operations, and fuel deliveries for nearly two weeks.

Apart from refining operations, the strikes have disrupted LNG imports into France as LNG import terminals have been shut down. France has four LNG receiving terminals, Dunkirk, Montoir, Fos Cavaou, and Fos Tonkin.

Also Read: Protests: LNG Import Terminals in France Grounded With Little Respite In Sight

Reports say at least seven LNG cargoes heading to France have changed course since the strikes were implemented and are now headed to alternate ports in the Netherlands, the UK, and Spain

By Bosco Agbah

Nigeria’s Oil Roam EU International Waters, Searching For Buyers

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A report quoting unnamed four traders, has said that between 20 and 25 shipments of Nigerian crude for April loading are still floating on the high seas in Europe, searching for buyers.

This development comes on the heels of another report that lingering strikes and protests in the French refining sector and seasonal maintenance at plants elsewhere in Europe cut into the OPEC producer’s sales.

Observers say that’s a much weaker position than normal for this time of the month — when trade should be moving on to May’s barrels — and the prices the shipments can fetch are dropping, they said. Each cargo is about a million barrels of crude.
Rated as one of Nigeria’s biggest patrons, France took an average of 110,000 barrels a day of Nigeria’s oil over the past year, according to tanker-tracking data compiled by Bloomberg.

Also Read: NNPC Hires French/Swiss National To Head Trading Team

But that demand has shriveled this month, with France’s overall crude imports dropping by half in March as the nationwide dispute over pension reforms escalates, according to Wood MacKenzie.

Well over 80% of France’s 1.1 million-barrels-a-day processing capacity is halted or in the process of shutting down because of the industrial action, data compiled by Bloomberg show.

The traders also assert that, in addition to the impact of the strikes, other plants in Europe are also buying less crude because of seasonal maintenance.

“Capacity is offline at some typical destinations for Nigerian crude such as Spain’s San Roque refinery and Italy’s Sarroch plant,” Bloomberg said.

Also Read: FG Flaunts Scorecard On Maritime, Cross Border Oil Related Crimes Fight In 5yrs

Facilities that have halted capacity for work also include Shell’s Pernis refinery near Rotterdam, Europe’s biggest plant.
“The Nigerian backlog is a combination of higher freight costs, lower tanker availability — specifically into Europe — as well as lower overall demand for West Africa light sweet as crude from other regions is deluging markets,” Viktor Katona, lead crude analyst at Kpler, was quoted saying.

Northwest Europe’s reduced buying matters for West Africa because alternative outlets are limited, traders said. Mediterranean refiners can choose to skip Nigerian supply in favor of cheap North African barrels that ship more quickly to the region, or they can process some of the large volumes of US West Texas Intermediate crude that have been arriving in Europe in recent months.

Long-haul buyers like Indian Oil Corp. and Indonesia’s Pertamina have been taking more discounted Russian volumes this year, easing their need for Nigerian supply. China’s Unipec favors processing oil from Angola, where only around five April shipments are still available, the traders said.

Also Read: Former NNPC Chief, Anibor Kragha, Re-Elected African Refiners Association Helmsman

Some people have identified another driver for the unsold glut; being the country’s revival of crude production that was shuttered in recent months by theft and technical issues, such as the nation’s Bonny Light stream.

It is expected that Nigeria’s export capacity should now exceed what the market needs by end of 1Q, according to Katona.

By Ken Okoye

Court Throws Out Money Laundering Against NLNG

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A Federal High Court in Lagos has dismissed a lawsuit alleging collusion with foreign companies and agencies, corruption and money laundering against Nigeria LNG, the managing director, Tony Attah, and three others.

The others include the general manager commercial, Ufuoma Otemowo, former general manager commercial and non-executive director, Patrick Olinma.

They noted that the court papers were initiated via a proxy company, Global Private Investigators Limited. This company was clearly acting on behalf of undisclosed principals as Global Private Investigators Limited has no contractual or other partnership relationship whatsoever with Nigeria LNG and its executive officers.

Also Read: Former NNPC Chief, Anibor Kragha, Re-Elected African Refiners Association Helmsman

The principals are most likely aggrieved contractors who have lost out on lucrative contracts or had had their contracts terminated by the board of Nigeria LNG.

The proxy company had instituted the law suit seeking amongst other reliefs an order of the Federal High Court stopping Nigeria LNG from entering into new contracts with reputable international oil and gas companies like Gunvor, Trafigura, Royal Dutch Shell, Vitol, TotalEnergies Trading/Totsa, Glencore, and Eni for lifting of LNG alleging that they are involved in criminal activities in the US and other countries.

The purported proxy petitioners equally Also an order of court awarding to them the sum of N5 billion against Nigeria LNG and its directors. They also wanted an order of court removing Mr. Patrick Olinma from the Board of Nigeria LNG.

Also Read: Why European Oil Companies Face A Valuation Gap When Compared With US Peers

Sources say that Nigeria LNG and other defendants put up a vigorous defence through their lawyers which led to the Federal High Court dismissing the case. Nigeria LNG, Otemowo and Tony Attah were represented by Mr. Wale Akoni, SAN, whilst Patrick Olinma was represented by Mr. Babatune Fagbohunlu, SAN.

Mr. Patrick Olinma has since voluntarily resigned from the board of directors of Nigeria LNG Limited, effective 31st July, 2021

By Ken Okoye

FG Flaunts Scorecard On Maritime, Cross Border Oil Related Crimes Fight In 5yrs

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President Muhammadu Buhari has said that over 220 vessels involved in maritime criminality within Nigeria’s Exclusive Economic Zone, up to the Republic of Togo, between August 2018 and March 2023, have been prosecuted.

He also said over 87 oil tankers involved in various crude oil and product theft had been arrested, as theft of over three million barrels of crude oil was prevented, while 15 million litres of petrol and diesel were recovered.

According to him, as part of efforts to address evolving security challenges in the country, especially terrorism and violent extremism, he also inaugurated the new Office of the National Security Adviser [ONSA], and National Counterterrorism Centre [NCTC], in Abuja,
Speaking at the inauguration of the two world-class facilities, the President said it would serve as a major legacy to provide the incoming administration with infrastructure to effectively coordinate national security and counter-terrorism efforts.

President Buhari used the occasion to outline significant milestones achieved by his administration on National Security, including gains in combating terrorism, armed banditry, kidnapping, separatist tendencies, crude oil theft, piracy as well as militancy in the South-South and cyber-security.

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The President in a statement by his Special Adviser on Media and Publicity, Femi Adesina, had since its coming, invested heavily on stabilising and enhancing security across the country.

“This was largely achieved through the valiant efforts of our Armed Forces and other security agencies, in collaboration with our regional and international partners but above all, the support and cooperation of the Nigerian citizens.”

“Issues of crude oil theft, sea robbery, piracy and militancy in the South-South are equally being addressed. Most of these threats have transnational linkages thereby reinforcing the need for regional and international cooperation as critical enablers to enhance our national security,” he said.

On maritime security, President Buhari expressed delight that some key threats within Nigeria’s maritime environment such as piracy, sea robbery, crude oil theft as well as illegal unregulated and unreported fishing, were being effectively tackled.

“This was largely achieved through the valiant efforts of our Armed Forces and other security agencies, in collaboration with our regional and international partners but above all, the support and cooperation of the Nigerian citizens.”

“Issues of crude oil theft, sea robbery, piracy and militancy in the South-South are equally being addressed.
“Most of these threats have transnational linkages thereby reinforcing the need for regional and international cooperation as critical enablers to enhance our national security,” he said.

Also Read:

On maritime security, President Buhari expressed delight that some key threats within Nigeria’s maritime environment such as piracy, sea robbery, crude oil theft as well as illegal unregulated and unreported fishing, were being effectively tackled.
He said between August 2018 and March 2023, over 220 vessels involved in maritime criminality within Nigeria’s Exclusive Economic Zone, up to the Republic of Togo, had been prosecuted.

He commended the Falcon Eye maritime domain awareness project, domiciled with the Nigerian Navy and coordinated by ONSA, for providing high-quality real-time intelligence, leading to the arrest and prosecution of economic saboteurs.

He added that over 87 oil tankers involved in various crude oil and product theft had been arrested, the theft of over 3 million barrels of crude oil prevented and 15 million litres of petrol and diesel recovered.

By Bosco Agba

NERC, NBET’s 5000mw Deal With Power Vendors, Regulators Collapses

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The Association of Power Generation Companies (APGC), an umbrella body of the Gencos, has confirmed the collapse of the anticipated minimum 5000 megawatts (mw) Power Purchase Agreement (PPA) activated by market participants in the second quarter of 2022.
The PPA was packaged under the coordination of the Nigerian Electricity Regulatory Commission (NERC) and the Nigerian Bulk Electricity Trading Company (NBET).

Market participants, including Gencos, distribution companies (Discos), Transmission Company of Nigeria (TCN), gas suppliers and NBET had signed a contract that would ensure that at least 5000mw of power was generated, paid for 100% and successfully delivered to consumers on a daily basis with effect from July 1, 2022.

The executive secretary, Association of Power Generation Companies (APGC), an umbrella body of the Gencos, Dr. Joy Ogaji described current power industry solutions as knee jerked, shortsighted and not sustainable.

She attributed the collapse of the PPA activation to the imposition of the contract and its terms on them, as well as the lack of key contractual details in the agreement document handed to them by the regulator.

Also Read: N1trn Debt Payment Top Gencos’ Demand From Nigeria’s Incoming Govt

Nigeria’s power sector has continued to underperform and has defied a lot of policy measures aimed to move the needle in power supply to homes and businesses through the national grid, despite the privatization of the generation and distribution chains of the power industry in 2013.

With approximately 13,000mw installed generation capacity, actual power supply to Nigerians continue to hobble below 5000mw post-privatization.

The nation’s power sector has been enmeshed with horrible stories of endless crashing of the national grid, otherwise known as system collapse, perennial stranded power, load rejection by Discos and their rascality in the issuance of outrageous bills that are not commensurate with energy consumed.

With the collapse of the PPA activation, which NERC had assured Nigerians would lead to a marked improvement in power supply starting from July 1, 2022, by consolidating a minimum 5000mw daily supply with potential to ramp up to 7000mw, it does appear that Nigerians will have to wait longer before experiencing a leap in power supply.

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“The Gencos have been inundated with negative comments on the subject matter and it is imperative that we put the records straight. Contrary to malicious gossips making the round that the Gencos’ inability to make available their inflated capacity is the reason why the subject matter failed, the following are some of the reasons why the PPA activation plan failed.”

She explained that Nigeria being Africa’s largest economy and most populous country, with a population estimated at over 216 million people and the world’s 27th largest economy by Gross Domestic Product (GDP) was endowed with both natural and human resources, and has continued to attract strategic Foreign Direct Investment (FDI).

By Bosco Agba

ENGIE, CarbonClear Partner To Finance Energy Access In Africa

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ENGIE Energy Access, one of the leading off-grid providers in Africa and CarbonClear – a data-driven and innovative carbon offset certification company, have announced a partnership in a pioneer agreement to accelerate the use of climate finance by the off-grid sector in sub-Saharan Africa through issuing and selling data-driven and impactful carbon credits.
Also working in the partnership is ENGIE Global Energy Management & Sales (GEMS) – the energy management and sales division of the ENGIE Group

Under the terms of the agreement, CarbonClear will be using its innovative and fully digital model to certify the carbon offset generated from the solar kits distributed by ENGIE Energy Access to rural and off-grid communities living in sub-Saharan Africa.
ENGIE GEMS will then assist ENGIE Energy Access in selling these credits to climate-conscious organisations wanting to offset their greenhouse gas emissions with projects that have a high social and environmental impact. The partnership targets to issue 500.000 tCO2e of offsets.

“Carbon credits are an important lever to optimize the affordability of our products. We are therefore excited that the partnership with CarbonClear will enable us to mobilize additional climate finance and accelerate our growth” declared Steven Fleurus, head of finance at ENGIE Energy Access.

Vincent Verbeke, Excom member at ENGIE GEMS comments: “By leveraging on the efficiency and transparency of digital tools, the CarbonClear platform provides robust and transparent evidence of the environmental benefits ENGIE Energy Access brings to rural African communities and provides a unique opportunity for corporates to participate by purchasing carbon credits.”

Through an IT integration between CarbonClear and MySolGo, the last-mile distribution software used by ENGIE Energy Access to monitor its PAYG operations, Micro Carbon Avoidances (MCAs) are created, which are made available to corporate buyers wishing to compensate for their CO2 footprint.

The carbon calculations applied are based on the established UN Clean Development Mechanism (CDM) methodology, and are third-party verified by DNV.

“This partnership with ENGIE Energy Access and GEMS happens at a time when a number of global initiatives are exploring ways of strengthening the integrity of the voluntary carbon market, as well as its liquidity.

By scaling CarbonClear’s proven data-driven model, this partnership will provide measurable carbon finance to impactful solar off-grid deployments throughout the marginalized areas of the world where ENGIE Energy Access operates.” said Karim Jabbar, CEO and co-founder of CarbonClear.

This timely initiative responds to an emergency situation. Due to the Covid crisis and demographic evolution, the number of people living without access to electricity is now worsening, impacting 600 million people in Africa alone. Even more alarming, the Off-Grid Solar Market Trends Report 2022 published by GOGLA is even anticipating that this figure will stall throughout the end of this decade, if the sector does not receive additional funding. As such, the World Energy Outlook estimates that an additional 26 billion dollars per year are required to meet SDG7.

The recently launched Africa Carbon Market Initiative (ACMI) during the COP27 highlighted the important role the Voluntary Carbon Market could and should play in addressing this situation.

It builds on the observation that access to energy companies face significant difficulties to mobilise funding from the VCM due to inadequate validation and certification methodologies and particularly long lead times.

“Achieving the UN Sustainable Development Goal 7 of a universal access to energy by 2030 is largely falling behind. With this pivotal agreement, we ambition to contribute as a leader in the sector to catch-up while exploiting to its full potential the 2 billion USD Voluntary Carbon Market (VCM).

“Thanks to increasing traditional and, in this specific case, alternative funding means we will meet our target to impact 20 million people by 2025.” said Gillian-Alexandre Huart, CEO of ENGIE Energy Access.

By Bosco Agba

NBS Raises Concern Over Rising Cost Of Petrol, Profiteering Activities Of POS operators

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The Price Watch of Nigeria’s National Bureau of Statistics (NBS), has said that a combination of high petrol and diesel costs, added profiteering activities of Point of Sales [POS] operators kept energy prices high in February.

According to the group, the average retail price of Premium Motor Spirit [PMS], popularly known as petrol, rose by 54.76% Year-on-Year (Y-o-Y) from N170.42 per litre in February 2022 to N263.76 per litre in February 2023, a deviation from the recently approved price of N185 per litre.

Comparing the average price with January 2023 price, the average retail price climbed 2.58%. Market reports suggest that petrol prices were much higher across major cities, especially from independent marketers, in February when prices ranged between N220 and N250 per litre and worsened as POS costs nudged by a cash scarcity hurt consumer pockets.

Also Read: Former NNPC Chief, Anibor Kragha, Re-Elected African Refiners Association Helmsman

While petrol price has risen despite price regulation, some analysts note that petrol price may more than double in the next few months as the government removes subsidy from the retail pump price.

The average retail price of Automotive Gas Oil (Diesel) increased by 168.26% Y-o-Y from N311.98 per litre recorded in February 2022 to a higher cost of N836.91 per litre in February 2023. On a month-on-month basis, the diesel engine fuel increased by 0.98% from N828.82 per litre in January to an average of N836.91 in February 2023. Analysts reckon that the higher diesel price could be attributed to exchange rate shortages, port-related dollar charges, and the high cost of vessel leasing.

By Ken Okoye

Group Urges S/West Govs To Take Advantage Of Removal Of Power From Exclusive List

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A group, Development Agenda for Western Nigeria [DAWN], Commission, has called on state governments in the south western Nigeria to take advantage of the constitutional amendment bills that removed electricity generation and railway from the exclusive legislative list.
In a statement signed by the Commission’s director-general, Dr Seye Oyeleye, said to states in question should take advantage of these amendments to demonstrate that the prosperity and political stability of Nigeria hinges on political reforms on fiscal federalism and unbundling of the Exclusive Legislative list.

The group said it has partnered with stakeholders in the railway sector to actualise the Great Western Rail in the region.
The statement reads: “The commission commends President Muhammadu Buhari for signing constitutional amendment bills that removed electricity generation and railway from the exclusive legislative list.

“No legislation, since 1999, has excited Nigerian development stakeholders as these ones. It therefore salutes the 9th National Assembly, the State Houses of Assembly and many lobby groups that worked to produce this near-miraculous feat that has gulped years of consistent socio-political advocacy.

Also Read: N1trn Debt Payment Top Gencos’ Demand From Nigeria’s Incoming Govt

“DAWN Commission acknowledges that Nigerian states, by virtue of these amendments, are now empowered to function as true federating units and centres of production that can plan and develop at their own peculiar pace.

“The Commission assures the people of Southwest region of the Governors’ readiness to take advantage of these amendments to demonstrate that the prosperity and political stability of Nigeria hinges on political reforms on fiscal federalism and unbundling of the Exclusive Legislative list.

“To attest to their readiness, DAWN Commission has partnered with stakeholders in the railway sector and a roadmap to the actualisation of Great Western Rail will soon be unveiled. Electricity will form the crux of the meeting of the Investment Promotion Agencies of the Southwest States in Akure next month.

“Exciting times are ahead and the Commission, with the backing of the Governors, is poised to ensure the latest constitutional amendments translate to evident and improved development in the region.

Also Read: Proshare Analysts Rap Incoming Federal Administration On Power Sector Reforms

“Though the amendments inch Nigeria towards a truly federal state, more reforms are still needed. The Commission therefore calls for further constitutional amendments that guarantee state and community policing, amongst others.

“The Commission, in addition, calls for the amendment of the country’s revenue allocation formula, considering that many of the responsibilities that justify the Federal Government’s share of 52.68 percent have either been privatized or decentralized.
“Lastly, the Commission thanks all well-meaning Nigerians who have demonstrated commitment to political reforms. This major feat should serve as an encouragement to do more.”

By Ken Okoye

NNPC Hires French/Swiss National To Head Trading Team

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The Nigerian National Petroleum Company (NNPC) Limited has named Mr. Jeane-Mare Cordier, a former vice president of the Abu Dhabi National Oil Company (ADNOC) as head of NNPC oil trading arm, the NNPC Trading Ltd.

The move, it was gathered, is to strengthen and firm up the negotiating portfolio of the NNPC to enable it survive in the international market. It is believed that in the years that NNPC was a state agency, the trading arm underperformed woefully.

NNPC Ltd chief spokesman, Mr. Garba Shehu said in a statement that Cordier’s appointment was in furtherance of the ongoing repositioning drive in the company towards improved growth, better performance, and service delivery.

Also Read: NNPC, NUPRC Differ On Nigeria’s Increased Oil Output Data

He explained further that the new appointee, Cordier, a French/Swiss national, is a renowned international oil trader, holds a Masters degree in corporate finance with a distinction from Paris 9 University.

“He comes into the role with a rich background spanning over 30 years in physical oil, oil derivatives, and risk management, with significant experience in reorganising and creating a trading business.

“He spent 24 years with Elf Trading/Total Trading in various positions as trader, trading desk manager in Geneva, and four years as the global trading manager at Addax Energy in Geneva,” the statement added.

Also Read: Former NNPC Chief, Anibor Kragha, Re-Elected African Refiners Association Helmsman

At Abu Dhabi National Oil Company, ADNOC, in Abu Dhabi, UAE, the NNPC said that Cordier served as vice president middle distillates and senior vice president, risk management.

The statement stressed that the new appointee was senior team member in charge of building the trading activity for ADNOC and the launch of ADNOC Global Trading (AGT) in December 2020.

By Ken Okoye

N1trn Debt Payment Top Gencos’ Demand From Nigeria’s Incoming Govt

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Power Generation Companies (Gencos) have called on the incoming federal administration to, as a matter of urgency, defray the N1trillion owed the sector, hasten the performance of operators in the sector.

The executive secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, in a chat in Abuja said the incoming administration should also resolve the gas supply challenge that has been bugging power generation.

“They should consider the power sector in the exclusive list for foreign exchange waivers, in addition to adequate risk protection mechanism for Gencos against breach of contract,” she said.

She specifically canvassed for government-backed Partial Risk Guarantees (PRGs) for all Gencos to cover private investors against the risk of a government-owned entity failing to perform its contractual obligations with respect to a private project.

Insisting on 100 per cent payment of all outstanding payments due to Gencos by the Nigerian Bulk Electricity Trading Limited (NBET) and the Market Operator, Ogaji suggested that the federal government may provide tradable instruments backed by the Central Bank of Nigeria (CBN) in lieu of outright settlement.

Also Read: Proshare Analysts Rap Incoming Federal Administration On Power Sector Reforms

“There has to be full capacity and energy payments on an ongoing basis – for Gencos to maintain and improve available capacity as well as aid implementation of expansion plan (over N1.6 trillion),” she said

While advocating that concession fees by hydropower generators be paid in naira rather than in dollars, the Gencos’ spokesperson, however, called for an immediate and effective infrastructural improvement to increase the capacity of the national grid.

She said the federal government should be able to formulate a policy document to address the inequitable distribution of technical and commercial risks in the power sector. “This would provide the policy direction for the regulator to design a risk matrix,” she said.
On the relationship between Discos and the Transmission Company of Nigeria [TCN], she urged the federal government to intervene without delay and resolve all interface issues, to enhance increased capacity utilization.

Also Read: President Buhari Inaugurates Maidugiri Emergency Power Project

“There should be effective support and design to our proposal of a two-part market to address the current issues in the market and lead us to a more sustainable market.

“Also there should be security of our power facilities from increased community hostility and resistance to payment for electricity. Government should therefore resist the urge to strong-arm investors as this would have a negative effect on Nigeria’s risk profile,” she added.

By Bosco Agba

Why Damaged Batteries May Result In The Total Write-Off Of Electric Cars By Insurers

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For many electric vehicles, there is no way to repair or assess even slightly damaged battery packs after accidents, forcing insurance companies to write off cars with only a few kilometres on the clock — leading to higher premiums and undercutting gains from going electric.

Those battery packs are now piling up in scrapyards in some countries, a previously unreported and expensive gap in what was supposed to be a “circular economy”.

“We’re buying electric cars for sustainability reasons,” said Matthew Avery, research director at automotive risk intelligence company Thatcham Research. “But an EV isn’t very sustainable if you’ve got to throw the battery away after a minor collision.”
Battery packs can cost tens of thousands of dollars and represent up to 50 per cent of an EV’s price tag, often making it uneconomical to replace them.

While some carmakers such as Ford Motor and General Motors said they have made battery packs easier to repair, Tesla Inc has taken the opposite tack with its Texas-built Model Y, whose new structural battery pack has been described by experts as having “zero repairability”.
Tesla did not respond to a request for comment.

A Reuters search of EV salvage sales in the US and Europe shows a large portion of low-mileage Teslas, but also models from Nissan Motor Co, Hyundai Motor Co, Stellantis, BMW, Renault and others.

EVs constitute only a fraction of vehicles on the road, making industry-wide data hard to come by, but the trend of low-mileage zero-emission cars being written off with minor damage is growing. Tesla’s decision to make battery packs “structural” — part of the car’s body — has allowed it to cut production costs but risks pushing those costs back to consumers and insurers.

Tesla has not referred to any problems with insurers writing off its vehicles. But in January, chief executive Elon Musk said premiums from third-party insurance companies “in some cases were unreasonably high.”

Unless Tesla and other carmakers produce more easily repairable battery packs and provide third-party access to battery cell data, already high insurance premiums will keep rising as EV sales grow and more low-mileage cars get scrapped after collisions, insurers and industry experts said.

The number of cases is going to increase, so the handling of batteries is a crucial point,” said Christoph Lauterwasser, managing director of the Allianz Centre for Technology.

Mr Lauterwasser noted EV battery production emits far more carbon dioxide than fossil-fuel models, meaning EVs must be driven for thousands of kilometres before they offset those extra emissions.

“If you throw away the vehicle at an early stage, you’ve lost pretty much all advantage in terms of carbon dioxide emissions,” he said.
Most carmakers say their battery packs are repairable, though few seem willing to share access to the relevant data. Insurers, leasing companies and car repair shops are already fighting with carmakers in the EU over access to lucrative connected-car data.

Mr Lauterwasser said access to EV battery data is part of that fight. Allianz has seen scratched battery packs where the cells inside are likely undamaged, but without diagnostic data it has to write off those vehicles.

Ford and GM tout their newer, more repairable packs. But the new, large 4,680 cells in the Model Y made at Tesla’s Austin plant Texas are glued into a pack that forms part of the car’s structure and cannot be easily removed or replaced, experts said.
In January, Mr Musk said the carmaker had been making design and software changes to its vehicles to lower repair costs and insurance premiums.

The company also offers its own insurance product in a dozen US states to Tesla owners at lower rates.
Insurers and industry experts also note that EVs, because they are loaded with all the latest safety features, so far have had fewer accidents than traditional cars.

Sandy Munro, head of Michigan-based Munro & Associates, which tears down vehicles and advises manufacturers on how to improve them, said the Model Y battery pack had “zero repairability”.

“A Tesla structural battery pack is going straight to the grinder,” he said.
EV battery problems also expose a hole in the green “circular economy” touted by carmakers.
At Synetiq, the UK’s largest salvage company, head of operations Michael Hill said that over the past 12 months the number of EVs in the isolation bay — where they must be checked to avoid fire risk — at the firm’s Doncaster yard had soared from perhaps a dozen every three days to up to 20 per day.

“We’ve seen a really big shift and it’s across all manufacturers,” Mr. Hill said.
The UK currently has no EV battery recycling facilities, so Synetiq has to remove the batteries from written-off cars and store them in containers. Mr Hill estimated at least 95 per cent of the cells in the hundreds of EV battery packs — and thousands of hybrid battery packs — Synetiq has stored at Doncaster are undamaged and should be reused.

It already costs more to insure most EVs than traditional cars.
According to online brokerage Policygenius, the average US monthly EV insurance payment this year is $206, or 27 per cent more than for a combustion-engine model.

According to Bankrate, an online publisher of financial content, US insurers know that “if even a minor accident results in damage to the battery pack… the cost to replace this key component may exceed $15,000”.
A replacement battery for a Tesla Model 3 can cost up to $20,000 for a vehicle that sells for about $43,000 but depreciates quickly over time.

Andy Keane, UK commercial motor product manager at French insurer AXA, said expensive replacement batteries “may sometimes make replacing a battery unfeasible”.

There are a growing number of repair shops specialising in repairing EVs and replacing batteries. In Phoenix, Arizona, Gruber Motor Co has focused mostly on replacing batteries in older Tesla models.

But insurers cannot access Tesla’s battery data, so they have taken a cautious approach, owner Peter Gruber said.
“An insurance company is not going to take that risk because they’re facing a lawsuit later on if something happens with that vehicle and they did not total it,” he said.

The British government is funding research into EV insurance “pain points” led by Thatcham, Synetiq and insurer LV=.
Recently adopted EU battery regulations do not specifically address battery repairs, but they did ask the European Commission to encourage standards to “facilitate maintenance, repair and repurposing”, a commission source said.
Insurers said they know how to fix the problem — make batteries in smaller sections, or modules, that are simpler to fix, and open diagnostics data to third parties to determine battery cell health.

Individual US insurers declined to comment.
But Tony Cotto, director of auto and underwriting policy at the National Association of Mutual Insurance Companies, said “consumer access to vehicle-generated data will further enhance driver safety and policyholders’ satisfaction … by facilitating the entire repair process”.
Lack of access to critical diagnostic data was this month raised in a class action filed against Tesla in a US District Court in California.
Insurers said failure to act would cost consumers.

EV battery damage makes up only a few per cent of Allianz’s motor insurance claims, but 8 per cent of claims costs in Germany, Mr Lauterwasser said. Germany’s insurers pool data on vehicle claims data and adjust premium rates annually.
“If the cost for a certain model gets higher, it will raise premium levels because the rating goes up,” he added.

Egypt To Announce New Energy Strategy In Coming Weeks

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Egypt’s petroleum and mineral resources minister, Tarek El Molla, has said that his country will set out its national low-carbon energy strategy in the coming weeks to adapt to technology advances and global geopolitical circumstances.

“Time evolves and technology advances and with the challenges that happened over the last few years, especially after the Russia-Ukraine war… we have started to update our energy strategy”, he said, at a British-Egyptian Business Association event in his  honour on Monday evening in Cairo.

The ministry last presented its Integrated Sustainable Energy Strategy 2035 with the ministry of electricity and renewable energy in 2016.
At the UN climate conference Cop27 in November, host country Egypt brought forward its goal of sourcing 42% of its energy from renewable sources by 2035 to 2030. Its current renewable energy component is about 20%

However, as the country suffers from the economic fallout of the Russia-Ukraine war, it is also looking for ways to solve its foreign currency crunch and maximise its natural gas exports.

Egypt has increased natural gas exports to Europe during its energy crisis, as supplies from Russia were cut by more than 80% last year and prices surged.

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Mr. El Molla said at the Egypt Petroleum Show in Cairo last month that the state is planning to offer three international gas and oil tenders this year and has an “ambitious plan” to drill more than 300 exploration wells by 2025.

The war “unveiled the reality that the world is not ready today for renewables” to take over, Mr. El Molla said on Monday. “The gap showed that you need to diversify with another source of supply for some time.”

Decarbonisation and a transition to low carbon energy sources, including natural gas, will be core elements of Egypt’s oil and gas sector strategy, Mr El Molla said.

Energy subsidy reform, energy efficiency, renewable energy and hydrogen are additional key pillars of the plan.
“We need to go away from subsidies. More subsidies means more consumption, means cheaper treatment of products, means more emissions, means more and more pollution,” Mr. El Molla said. “If you put the right price for the right fuel, it reflects on the consumption.”
He emphasized that targeted social safety nets, such as Takaful and Karama, would continue to cushion vulnerable groups.

Egypt raised domestic gasoline prices by between 7 to 10% earlier this month to bring them more in line with global levels.
It is a delicate balancing act as its population of 104 million — of which about 30 million live below the poverty line — faces record inflation and a weakening currency.

Also Read: Mauritania Seals $34bn Hydrogen Deal With German, UAE, Egypt Consortium

Key pillars of Egypt’s new energy strategy will include energy subsidy reform, decarbonized natural gas to complement renewable energy and hydrogen.

The government has been seeking to decrease the consumption of petroleum products in favour of decarbonized natural gas in recent years.
Egypt has been a net exporter of natural gas since 2019 and has been securing additional gas through regional co-operation with countries such as Israel and Cyprus.

In 1999-2000, out of 37 million tonnes of consumption annually, natural gas made up of 38% and petroleum products 62%, according to Mr. El Molla.

By 2014-15, out of 73 million tonnes of consumption, the split was more even with natural gas making up 48% and petroleum products 52%

In 2022-23, annual consumption is at 82 million tonnes with natural gas making up 65% and petroleum products 35%.
Fourteen million households now have natural gas connections, saving 845,000 tonnes of carbon emissions annually.
Half a million vehicles are running on compressed natural gas, saving 2.2 million tonnes of carbon emissions per year.
Energy efficiency and green projects.

Also Read: Egypt Moves To Contain Impact Of Increase In Fuel Pump Price

Energy efficiency projects over the last five years, with the technical support of the European Union, have resulted in annual energy savings of $130 million, Mr El Molla said.

The government has several planned green petrochemical projects that require total investments of $2 billion and would result in a carbon emissions reduction of 3.3 million tonnes annually.

Egypt has also endorsed the World Bank initiative for zero routine flaring by 2030 and the Global Methane Pledge launched at Cop26, which aims to reduce global methane emissions by at least 30% from 2020 levels by 2030.

The Suez Canal Economic Zone signed a potential $83 billion worth of green hydrogen deals at Cop27.
The petroleum ministry is part of a national committee headed by the Prime Minister that is entrusted with preparing the country’s national low-carbon hydrogen strategy. This will include preparing an incentives package to promote investments into green hydrogen projects.
Oil and gas ‘part of the solution’

Despite some criticism that the number of delegates with links to fossil fuels at Cop27 jumped 25% from Cop26, Mr El Molla said their participation “showed the world that the oil and gas sector can be a part of the solution”.

Also Read: Egypt Declares Search For Energy Investment

Campaign group Global Witness found more than 600 representatives from the coal, oil and gas industries out of about 50,000 people attended the Sharm El Sheikh conference, up from 503 delegates in Glasgow.

Globally, the tone of seeing oil and gas companies as the “bad guys” has shifted, Mr El Molla said, and there is a recognition that engagement and alignment will ensure a smoother transition.

“Our industry will always be needed for decades to come, but we also need to be more responsible and we need to be part of the community,” he said.

The British Egyptian Business Association, established in 1996, is a non-profit organization serving the interests of the British and Egyptian business community.

Why European Oil Companies Face A Valuation Gap When Compared With US Peers

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The company formerly known as Royal Dutch Shell — simply Shell from January last year — has a proud European heritage. But the continent’s investors don’t love it, or its fellow oil companies, even while Americans rediscover the charms of petroleum stocks.
The big European oil companies, BP, Shell, TotalEnergies and Eni, trade at about five times their forward earnings; the leading Americans, ExxonMobil and Chevron, at 10 to 11 times.

All have done well with rising oil and gas prices. But while Shell’s share price has gained 78% since the start of 2021, ExxonMobil’s is up 165%.

The European corporations nearly closed the valuation gap with their US peers after the 2008-2009 global financial crisis, but it ballooned again.

The Europeans have been trying to boost their low-carbon businesses, investing in offshore wind, solar power, electric vehicle charging and batteries.

Shell and BP both recently paid billions of dollars to acquire bio-gas companies. They still have to demonstrate that they can run non-fossil businesses as well as specialist competitors do, and as well as their own petroleum assets.

Also Read: Russian Oil Firm, Lukoil Grabs 2 Offshore Blocks In Congo

The Americans, by contrast, have concentrated on their core petroleum businesses. They are developing carbon capture and storage (CCS), which fits well. Otherwise, their major purchases have been of shale oil and deep-water exploration companies.
This may be short-sighted given the ever-increasing imperative of climate policy, but for now, it has paid off.

The European regulatory and public environment is not friendly to oil companies, to say the least. In May 2021, a Dutch court ruled Shell should cut its greenhouse gas emissions by 45% by 2030 in line with global climate targets — including the emissions caused by customers, anywhere in the world, who burn the oil and gas they purchase.

Following Russia’s invasion of Ukraine, as oil prices rose, the UK and EU both imposed windfall taxes on what they called energy companies’ excess profits.

Such a levy was debated in the US but not implemented. Instead, the Joe Biden administration’s Inflation Reduction Act includes subsidies (or “incentives”), both for renewables and for oil company-adjacent biofuels, hydrogen and CCS.

Last week, the White House also approved a significant new oilfield development in Alaska, despite environmentalist opposition.
In December 2021, Shell consolidated its headquarters and listing in the UK, dropping the Royal Dutch part it had held since its 1907 merger. This was primarily to make share buybacks easier and avoid the Netherlands’ dividend withholding tax which had been a persistent irritant. Still, environmental groups suspected the court ruling on emissions was another motive.

That year, the company reportedly also considered shifting to the US. But it was not clear that such a move would suddenly have seen it enjoy the valuation multiples of ExxonMobil or Chevron. Some of its core shareholders would have opposed the idea, and the US levies a dividend withholding tax on foreign non-residents.

Also Read: Eni Announces Discovery Of Oil Sureste Basin, Offshore Mexico

BP and Shell have shifted their focus recently. Higher oil and gas prices since the post-2014 slump, and the need to replace Russian supply, make upstream investment in hydrocarbon exploration and production more enticing.

“2022 taught us that too much focus on the decarbonization agenda led to a mismatch between supply and demand,” BP’s chief economist, Michael Cohen, said last week.

In February, chief executive Bernard Looney revealed plans to cut oil and gas output to a more moderate 20% to 30%, from an earlier estimate of 35% to 40%. Within four days, BP’s stock gained more than 30%.

Patrick Pouyanne, TotalEnergies’ chief executive, notably said in February 2021: “I’m proud to be black [oil] and green, because if I don’t have the black part, which is delivering cashflows, I don’t have the green part.”

New Shell chief executive Wael Sawan took the top job after leading the gas and renewables business, which some took to indicate he would lead the company in a lower-carbon direction.

But before this, he ran the upstream division, and before that Shell’s US upstream, and its successful global deep-water business.
As a Lebanese-Canadian who grew up in Dubai, he brings a different perspective from the previous run of Dutch, Swiss and British chiefs. Now, he is demanding that the low-carbon businesses pull their weight and earn returns commensurate with those in oil and gas.
What can the European oil companies do to counter the valuation gap with their American peers?

They could spend more on oil and gas development. As noted, Mr. Looney and Mr. Sawan have made partial moves in that direction.
Shell and TotalEnergies have hugely promising new finds in Namibia, which could be the growth engine for them that Guyana’s oil has been for ExxonMobil.

Also Read: OPEC Scribe Calls For Coordination Between Oil Exporting Countries

But pressure from environmentalists, the general public, the law, shareholders and even their own employees in Europe makes it impossible to go unashamedly “back to petroleum”.

The European majors could go big in renewables, making a really major acquisition — more like $50-100 billion than the few billions of bolt-on deals so far — to build the scale and skills they need. But they have to accept that most low-carbon businesses are inherently lower-return — though less volatile — than upstream.

CCS will look more like sewage treatment than buccaneering frontier exploration. And today’s low valuation multiples make big share-based acquisitions unfeasible.

They can be bought by the Americans — a politically controversial Transatlantic move, and likely to be impossible in the case of TotalEnergies. They could sell their upstream assets piecemeal or en bloc.

BP and Shell could merge, but that would be a purely defensive move unless accompanied by a radical shake-up of strategy. Or could they find another buyer, perhaps an epochal tie-up with a Gulf company?

If they are to continue as independent entities, there is no easy way round the fundamental contradiction: European stakeholders demand energy transition but aren’t willing to value it as oil company investors.

The situation won’t change until the European chief executives articulate and deliver compelling pathways to high returns with low carbon.

Robin M. Mills is CEO of Qamar Energy and author of ‘The Myth of the Oil Crisis’

IMF Says Libya’s Economy Will Depend On Oil And Gas For The Foreseeable Future

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The International Monetary Fund [IMF] has said that the economic fortunes of Libya, North Africa’s second-largest oil producer, will depend upon oil and gas production for the foreseeable future.

Hydrocarbon production in the troubled country is projected to grow by about 15% to around 1.2 million barrels per day in 2023 following an increase in oil production from 1 million bpd in 2022, and increase gradually thereafter.

Following discussions for the 2023 Article IV consultation for Libya in Tunis, Tunisia, during March 11 to 17, IMF said, “Looking ahead, assuming fiscal spending remains contained, the baseline projection is for gradually declining fiscal and external surpluses over coming years.

Also Read: Atomic Energy Agency Raise Alarm: 2.5 Tons Of Uranium Missing From Libya

“Looking ahead, the stability of the exchange rate will remain an important anchor for monetary policy.”
Libya’s economy is anticipated to grow by 17.9% in 2023 after shrinking by an estimated 18.5% in 2022, according to IMF data. However, the country faces the challenge of reducing its reliance on hydrocarbons, while fostering stronger and more inclusive private sector-led growth, the IMF said.

The speed at which the international community is mobilizing to reduce carbon emissions and recent leaps in clean energy technology pose a risk of disorderly adjustment for economies dependent on oil, it said. Libya is at risk of falling behind these important global trends, it said.
“Structural reform efforts should focus on strengthening institutions and developing a more purposeful and transparent economic strategy for the future,” the IMF said.

“This would be an opportunity to rally the population behind a clear plan to optimize the use of oil revenue to achieve economic diversification and improve living standards and inclusivity.”

Also Read: OPEC Scribe Calls For Coordination Between Oil Exporting Countries

Libya has endured more than a decade of conflict since the 2011 revolt that toppled Muammar Qaddafi, with a myriad rival militias, foreign powers and governments vying for influence.

The country is split between a supposedly interim government in the western capital, Tripoli, and another in the east nominally backed by Field Marshall Khalifa Haftar.

By Ken Okoye

More Strikes Could Further Squeeze European Diesel Markets – Traders

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There are fears that the striking action in France’s refineries would tighten European diesel markets, even as crude oil markets are looking weaker.

France has been battling strikes in its crude oil refineries as union members’ pension system is due to be overhauled. On the spot assessments said the strikes have so far blocked shipments of refined products from France’s Donges and La Mede refineries and have reduced the throughput at the Normandy and Feyzin refineries.

Traders who spoke to Reuters yesterday said the curtailments have resulted in less feedstock demand—i.e., weaker crude oil demand, while threatening to tighten up the end product markets such as diesel.

Also Read: Eni Announces Discovery Of Oil Sureste Basin, Offshore Mexico

ICE low-sulfur diesel contracts rose on Monday to a premium of $35.25 a barrel—the highest level since November last year, with the profit margins for diesel in the EU climbing 40% over the last month.

French refineries process about a million barrels per day, or just over 8% of the EU’s total throughput, IEA data shows, and the country’s crude oil imports have sagged to 550,000 bpd in March, down 50% from February, Kpler data shows.

This has created slack in the crude oil markets—specifically of North Sea and Nigerian crude oil grades.
“WTI cargoes for May delivery compared with April are down by $1.50-$2/bbl, because of that, North Sea is having to price lower to compete,” a trader told Reuters.

Also Read: Atomic Energy Agency Raise Alarm: 2.5 Tons Of Uranium Missing From Libya

Meanwhile, in the UK, striking action from Union Unite, encompassing 1,400 offshore workers at contractor companies, is set to halt oil and gas platforms in the UK’s North Sea, including the platforms of BP, Shell, TotalEnergies, Harbor Energy, and more.

The striking workers are demanding a better deal on jobs, pay, and conditions. The Union cited the companies “enjoying record-busting profits,” and forecast that platforms and offshore installations would be brought to a “standstill” due to the striking action.

Russia Extends 500,000 Output Cut To June

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…As Oil Prices Near $75

Russia’s Deputy Prime Minister, Alexander Novak has said his country will continue its 500,000 barrel per day crude oil production cut through the end of June this year.

Now, Russia is saying that the proposed 500,000 bpd production cut will extend beyond March, running up to and including June of this year.
The country first announced the 500,000 bpd production cut last February after the deputy prime minister warned that there was a risk of lower oil production this year due to EU import bans and the price cap in Russian crude oil and crude oil products.

Russia’s oil production had held mostly steady in December and January despite the sanctions imposed on its crude oil. Still, the low price of Urals grade crude in January shifted Russia’s budget into deficit from a surplus in January 2022.

Also Read: Russia Expects Its Oil Output To Drop In 2023

At the time, Novak only said it would cut its March oil production. “As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap,'” Novak said at the time.

Oil prices have lost more than $10 per barrel over the last couple of weeks, spurred on in part by the near-collapse of the SVB bank and panic that the dire situation could spread to other banks and that it was indicative of broader economic troubles. But oil prices rallied on Tuesday, and Brent crude managed to eke out a 1.00% gain ($0.74) on the day.

Russia also said it was close to reaching its 500,000 bpd production cut target for this month. The timing of Russia’s production cut is a gift to OPEC, which could still decide to cut production as a group should prices fail to rally.

By Bosco Agba

OPEC Scribe Calls For Coordination Between Oil Exporting Countries

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FILE PHOTO: Iraqi Prime Minister Mohammed Shia al-Sudani during a news conference at the Federal Chancellery in Berlin, Germany January 13, 2023. REUTERS/Michele Tantussi/File Photo

OPEC’s secretary general, Haitham Al Ghais and Iraq’s prime minister, Mohammed Shia al-Sudani, have called for coordinated action among oil exporters and globally in order to reduce volatility in the oil market and avoid adverse.

The two leaders who met over the weekend however failed to offer detail on what such coordination could entail. Earlier this month, the Saudi energy minister said that OPEC+ would maintain its tighter supply plans.

“There are those who continue to think we would adjust the agreement … I say they need to wait until Friday Dec 29 2023 to demonstrate to them our commitment to the current agreement,” Abdulaziz bin Salman told Energy Intelligence in an interview.

Also Read: OPEC Now More Optimistic On China’s 2023 Rebound Forecast

Meanwhile, Iraq’s oil minister said over the weekend that Iraq—OPEC’s second-largest producer—remains committed to the OPEC+ agreement on production limits. Hayan Abdel-Ghani, however, added that Iraq was prepared to boost oil production, too, if called upon to do so.

The National reported.
Iraq’s government has plans to increase the country’s oil production capacity substantially from the current rate of around 4.5 million barrels daily. However, the same government has repeatedly stated it is fully behind OPEC and its production adjustment measures.
Outside OPEC, meanwhile, oil executives are warning that the cartel is back in the driving seat for global oil supply and this might mean higher prices down the road

“I think the people that are in charge now are three countries — and they’ll be in charge the next 25 years,” Scott Sheffield, chief executive of Pioneer Natural Resources, said on the sidelines of CERAWeek this month, as quoted by the Financial Times. “Saudi first, UAE second, Kuwait third.”

Also Read: OPEC Expresses Fear That China’s 2023 Oil Demand May Hit 600,000bpd

“Does it mean that the power is just going back to OPEC if the US starts keeping [production] flat? We’re 10 per cent of the world’s oil production and OPEC plus Russia is a much larger percentage. So yeah, they can dictate things probably more than we would,” the chief executive of Devon Energy, Rick Muncrief, told the FT.

By Bosco Agba