Nigeria Liquefied Natural Gas (NLNG) has denied reports it illegally withdrew $1.05billion from Nigerian National Petroleum Corporation’s dividend account.

It also denied that its Managing Director/CEO Tony Attah and the GMD, NNPC, Mele Kyari are signatories to an account and have been moving and “squandering” monies belonging to the company without approval.

Addressing a House of Representatives investigative panel into both allegations, the NLNG said for the purpose of clarity, the company as a private limited liability company, pays dividends to its shareholders and continues to conduct its business in full compliance with regulations and the laws of the Federal Republic of Nigeria.

“NLNG strictly follows extant protocols in the payment of dividends as value generated from the business and ensures that the process concerning payment of dividends to its shareholders is transparent and in full compliance with the laws of the Federal Republic of Nigeria,” the statement said, adding that NLNG’s involvement in the process ends with the payment of such dividend.

It explained further that the governance and controls around the company’s finances also makes the allegations against the Managing Director and the GMD impossible. The company advised members of the public to disregard the allegations as it is totally baseless and simply untrue.
NLNG assured that it will continue to bring value to both its shareholders and the country, utilising best practices in the industry to monetise gas resources and contribute to the socio-economic wellbeing of the country in line with its vision of helping to build a better Nigeria. Chibisi Ohakah, Abuja

FBN Analysts have said that the near time outlook for the petroleum industry was subdued considering the comparatively low fuel demand in the first half of 2020.
In the note last Friday, the analysts at merchant Bank and Asset Manager, FBN Quest, titled ‘Downstream Oil and Gas at a Crossroads and Due for Favourable Policy Steps,’ observed that a full pricing deregulation is crucial to the transformation of the fortunes of the oil and gas industry given that the downstream business is characteristically a low margin one.
The note prepared by Uwadiae Osadiaye, Oil & Gas, Industrials and Agriculture, they nevertheless stated that the long-term prospects of the sector seem promising.
“The downstream oil and gas business is typically a low margin one.

However, other factors, mainly constraining policies, have led to historically low investments in the sector over the last decade. In our view, the fortunes of the sector could change with the growing possibility of full pricing deregulation.
“We believe the reintroduction of a market-friendly pricing template for petrol in March and the central bank’s current attempt at unifying foreign exchange rates increased the prospects of the end of mandated petrol price ceilings.”
FBN Quest remarked that recently adopted pricing template embraced several factors like petroleum product cost and foreign currency conversion rate at which fuel marketing firms import petroleum products. They expressed expectation that the recent adjustment of the naira official FX rate from N306/$1 to N380 to test the durability of this template within this quarter.
“Assuming all other inputs remain constant on the most recently published PPPRA petrol pricing template, an adjustment of the FX rate assumption to current levels raises ex-depot prices by approximately 20%.
“Competition within major marketers is growing with new ownership/management. In the event that the federal government decides to continue with the new pricing template, effectively deregulating the sector, we see competition intensifying over the long term.”

Chibisi Ohakah, Abuja

The Organisation of Petroleum Exporting Countries (OPEC), has confirmed that Nigeria has cut its output from 1.7 million barrels per day, mb/d in May to 1.4mb/d in June 2020. It is the first time the global oil body is giving such confirmation, although Nigeria has consistently flouted the oil production agreement of OPEC.

In its July Oil Market Report, OPEC stated that the data was based on information obtained from official sources, adding that when unofficial sources are considered, Nigeria may have produced 1.5 mb/d during the period.
For a very long time, OPEC had insisted on total compliance with oil production cuts by Nigeria and a number of member countries. OPEC and its allied oil producers, known as OPEC+, last Thursday insisted that defaulting countries, including Nigeria, must adhere to total compliance with the oil production output cuts agreement in April. It also expressed optimism that market conditions are gradually improving, but noted that all participating countries must renew their commitment to ensuring stability in the international oil market.

However, contrary to earlier speculations that the cartel will make pronouncements on the next phase of easing of output cuts to about 7.7 million barrels per day, the OPEC failed to make that announcement, but scheduled the next meeting for August.
According to the original agreement from April, OPEC+ was to cut 9.7 million bpd in combined production for two months–May and June–and then ease these to 7.7 million bpd, to stay in effect until the end of the year.
Then, from January 2021, the production cuts would be further eased to 5.8 million bpd, to remain in effect until end-April 2022. But at its 20th Meeting of the Joint Ministerial Monitoring Committee (JMMC), which took place via video conference on Thursday, yesterday, under the chairmanship of Prince Abdul Aziz Bin Salman, assisted by his Russian counterpart, JMMC said it reviewed the monthly report prepared by its Joint Technical Committee (JTC).

The committee also considered market prospects for the second half of 2020 and reiterated the importance of the ‘Declaration of Cooperation’ (DoC) in supporting oil market stability. “The outcomes of the June meetings extended the first phase of the production adjustments until 31 July 2020; provided a compensation mechanism in respect of the months July, August and September for participating countries that were not able to achieve full conformity in May and June.

“The committee reviewed and reaffirmed the commitment of all participating countries to achieve full conformity and make up for any shortfall under compensation plans presented to the committee.
“It stressed that achieving 100 per cent conformity from all participating countries is not only fair but vital for the ongoing rebalancing efforts and to help deliver long term oil market stability,” OPEC said.

After a review of the crude oil production data for the month of June 2020, the cartel said it welcomed the significant performance in the overall conformity level for participating countries at 107 per cent in June 2020, an achievement that found wide recognition in the market.

Chibisi Ohakah, Abuja

The Organisation of Petroleum Exporting Countries (OPEC) and allies made real their promise to taper record supply curbs from August after its meeting, as oil prices eased on Thursday, but Reuters said the drop was cushioned by hopes for a swift U.S. demand pick-up after a big drawdown from the country’s crude stocks.

According to reports, Brent crude fell 27 cents, or 0.6 per cent, to $43.52 a barrel by 0439 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 32 cents, or 0.8 per cent, to $40.88 a barrel. They rose two per cent the previous day, helped by the U.S. crude inventories drop.

The OPEC and its allies, known as OPEC+, agreed at the meeting on Wednesday to scale back oil production cuts from August as the global economy slowly recovers from the coronavirus pandemic. The global oil group has been cutting output since May by 9.7 million barrels per day, or 10% of global supply, but from August, cuts will officially taper to 7.7 million bpd until December.

“Some investors took profits after the OPEC+ decision, but a big draw in U.S. crude provided some support,’’ Kazuhiko Saito, Chief Analyst at Fujitomi Co said. Data from the Energy Information Administration showed U.S. crude inventories fell 7.5 million barrels last week, shrinking much more than the 2.1 million-barrel drop expected by analysts in a Reuters’ poll.

Despite the official OPEC+ accord, Saudi Arabian Energy Minister, Prince Abdulaziz bin Salman, said production cuts in August and September would end up amounting to about 8.3 million bpd, more than the headline number.

The minister said that would be because countries in the grouping which over-produced earlier this year would compensate by making extra August-September cuts, the minister said. Oil prices are expected to remain boxed in as more supply from OPEC+ countries will likely be absorbed by recovering demand, said Tsutomu Kosuge, president of the commodity research firm, Marketedge Co.

“I expect Brent will stick to the tight range between $40.50 and $46.50 for the next month or so,’’ he said, adding rising tensions between China and the U.S. may weigh on market sentiment. U.S. Secretary of State, Mike Pompeo, took fresh aim at China on Wednesday, saying the U.S. would impose visa restrictions on Chinese firms like Huawei Technologies whom he accused of facilitating human-rights violations.

Rystad Energy also predicted that oil prices will stay where they are for the rest of 2020 as any uptick will hurt already struggling refining margins and negatively impact the most-needed recovery in refinery runs.

Meanwhile, the International Energy Agency (IEA) Executive Director, Fatih Birol, said on Wednesday that global oil markets are slowly rebalancing after the shocks seen during the coronavirus lockdown, with prices expected at about $40/barrel in the coming months.

Chibisi Ohakah, Abuja 

BelGAS, a global leader in the design and manufacture of high- and low-pressure regulator products for the natural gas industry has expanded its offering of products that set a new standard in downstream safety with the introduction of the P100SX Residential Slam Shut Pressure Regulator.

BelGAS, a division of Marsh Bellofram in a statement made available to Orient Energy Review said the double-stage regulator can provide token relief, excess flow, and both over pressure and under pressure shutoff protection.

Adding that its size is specifically designed for residential and light commercial systems, affording the potentially lifesaving benefits of slam shut technology to places where people live and work.

Utilities are seeking the safest method possible to deliver their product to customers. Efficiently building redundancies into downstream operations helps save lives, reduce property damage, and provide peace of mind.

The P100SX brings together multiple safeguards in a single unit. The base unit regulates the flow and pressure of natural gas, has the ability to shut off with high pressure and low pressure, and has the option of adding internal relief, BelGAS stated.

According to the manufacturer, the P100SX is a pressure regulator with its own built-in secondary protections. The slam shut feature will not interfere with pressure regulator functions—but will act immediately if there is ever a failure.

“If pressure ever exceeds the set point, the P100SX automatically shuts off the flow of gas. As an added safety feature, it requires a manual reset to allow for investigation of the event. The device is compatible with natural gas, air, propane, and general-purpose gas pressure regulation.”

BelGAS also manufactures the PSX2 over/under pressure slam shut device for larger commercial applications such as restaurants and hotels. To learn more about the full line of BelGAS slam shut devices or other pressure regulators for the gas industry,

The Marsh Bellofram Group of Companies is an AS9100D and ISO9001:2015 certified global manufacturing collective. Its portfolio comprises high-performance OEM, industrial, and process control instrumentation, including timers and counters, digital controllers, RTDs and thermocouples, pressure instruments and gauges, FRLs, cylinders, natural gas and propane pressure regulators, valves, air pressure regulators and transducers, tank and liquid level measurement systems, pump and motor protection switches and alternating relays, as well as sensors, DC tachometers, encoders, industrial diaphragms, and specialty silicones.

Peace Obi

MOL, the operator of TAL Block in Pakistan, has made a new gas and condensate discovery, which marks its 13th discovery in Pakistan and the 10th discovery in the TAL Block.   

MOL in a statement made available to Orient Energy Review, stated that the TAL Block discovery is the second time in three months that MOL will discover hydrocarbon reserves in March 2020. MOL Norge discovered oil and gas in the North Sea, it disclosed.

The oil and gas company stated that Mamikhel South-1 exploratory well successfully reached a total depth of 4,939 m on 23 May 2020. Adding that upon testing, the well flowed gas and condensate from Lockhart & Hangu formation at a flow rate of 6516 boepd (16.12 MMscf/d and 3240 bpd respectively), with flowing well-head pressure of 4,476 PSI at 32/64” choke. Adding that further testing of the well is ongoing.   

MOL has a proven track record of successfully operating in Pakistan’s upstream sector for 21 years and holds equity stakes in four blocks in the country. The oil and gas company has made 13 oil, gas and condensate discoveries in Pakistan since the year 2000 and has discovered over 400 million boe hydrocarbon reserves. 

As the operating shareholder, MOL is responsible for 89 mboepd gross production (as of Q1 2020) in the TAL block, one of the largest hydrocarbon producing blocks in the country, where MOL has 8.4% share.  

MOL’s partners in the Joint Venture consortium are OGDCL, PPL, POL and GHPL. MOL Pakistan is the country’s second largest producer of LPG, crude oil and condensate. As the operator it currently addresses around 9% of the natural gas needs of Pakistan, 25 % of oil and condensate needs and 22% of LPG. 

The Group’s E&P Executive Vice President, Dr Berislav Gašo said: “I am delighted to announce that we have made another discovery in Pakistan. This new discovery has de-risked an exploration play in deeper reservoir in the TAL Block, leading to new upside opportunities.

“The Mamikhel South-1 discovery will also help to improve the energy security of the country from indigenous resources. We are thankful to our Joint Venture partners as well as the Government of Pakistan for their continued support.”  

With Upstream presence in 14 countries and production activities in 9 of them, MOL Group aims to transform its E&P division into an international platform. It noted that the new discovery strengthens this ambition further.

Besides its core region, Central & Eastern Europe (Hungary and Croatia), MOL has a well-established presence and partnerships in the CIS region (Russia, Kazakhstan, Azerbaijan), the Middle East, Africa and Pakistan as well as the North Sea region (UK, Norway). 

MOL Pakistan is a highly successful operator and an important contributor to Pakistan’s energy security, in addition, employs more than 400 people, the company stated.

Peace Obi

Nigerian government has said that Industrial Developments (P&ID) got the 20-year gas supply purchasing agreement (GSPA) contract illegally by bribing some officials.

Nigeria’s lawyer, Mark Howard on Tuesday, told Ross Cranston, a UK judge, that the Economic and Financial Crimes Commission (EFCC) has discovered payments to people involved in the project and their family members including Vera Taiga, whose mother, Grace Taiga, was a director in the ministry of petroleum resources at the time the deal was sealed.

Howard who spoke during the hearing on a dispute between Nigerian Government and P&ID said it discovered that one payment of $4,969.50 was made on December 30, 2009, and another $5,000 was paid to her on January 31, 2012, adding that P&ID claimed those payments were for health expenses.

“If Grace Taiga was in financial strain and she asked for the money from P&ID at this critical point and P&ID paid her in secret at precisely the time the GSPA was being put forward. That, in anybody’s language, is a bribe,” he explained during a virtual court hearing on the case.

“The nature of a bribe is not affected by what the bribe intends to spend the money on. The point is it is corrupt and improper to make payments to a government official when you are in the process of negotiating a contract with the government.”

The lawyer also said Taiga seemed to have a pattern of receiving money from companies seeking government contract as its investigation revealed that she also received money from two companies bidding for gas infrastructure projects.

He also hinted that Grace Taiga is awaiting trial to determine her role in the case.

In response to P&ID’s argument that Nigeria missed the 28-day appeal deadline, Howard said Nigeria only uncovered information about the deal in late 2019.

“Any legal team had to make a judgment call about whether there was enough evidence to argue it was a case of fraud,” he said.

Speaking further during the hearing, Howard told the court how Taofiq Tijani, the chairman of the government technical committee that reviewed the gas plant contract, had admitted to receiving $50,000 in cash from Neil Hitchcock, a deceased P&ID project director.

“The first payment was cash, the rest were through the banking system. The question is what was the essence of these payments? Mr Tijani said he had significant pressure to put the project through,” he told the judge.

“The payments we are referring to is a cash payment to Mr Tijani. These were disguised payments to cover up their tracks. October 19, £30,000, April 14, naira equivalent of €15,000 and same date €26,400 pounds and €13,317. These are all payments in connection with the project, which is described on page 34.

“My Lord, you look at these payments and look at Mr Tijani concerning these payments and you see that these payments cannot be accounted for. We are putting on one side the $50,000 that Mr Tijani said he was paid in cash.”

Howard, therefore, argued that the contract was illegal from the onset as P&ID, a company who claimed to handle large-scale oil and gas projects, spent millions of dollars in cash which is illegal under Nigeria’s money-laundering laws.

He said the company knew that it could not perform the project and thus, never, paid for the land where the project would have been sited.

“P&ID knew it could not perform such a huge contract, got the contract awarded through bribes and it knew it would extract money from Nigeria through arbitration or a settlement,” he said.

The July 14 hearing was part of the efforts on the Nigerian government to overturn the judgment the P&ID had earlier obtained against it.

Subsequently, Nigerian government obtained court clearance to request documents from a P&ID stakeholder and review bank statements of ex-President Goodluck Jonathan, Diezani Alison-Madueke and Rilwanu Lukman, former ministers of petroleum.

Recall that P&ID allegedly entered a gas supply and processing agreement with Nigeria in 2010. The company claimed Nigeria breached the terms of the contract as such took a legal recourse and secured an arbitral award against the country, which has accumulated to $9.6 billion.

Peace Obi with agency report