The Nigerian National Petroleum Corporation (NNPC) has announced crude oil and gas export sale of $355.93million in September 2019. The figure shows a significant increase of 52.84%, compared to the August, 2019 figure of $232.87million.

The NNPC Monthly Financial and Operations Report (MFOR), which bears the September 2019 crude oil and gas export sales information, also said that in the downstream Sector, a total of 186 pipeline points were vandalized, representing an increase of 18% from the 158 points breached in August 2019.

He report stated that out of the vandalized points, 30 failed to be welded while none was ruptured. Aba-Enugu axis accounted for 77% of the breaks, while PHC-Aba, ATC-Mosimi and other routes accounted for 8% each.

A breakdown of the figures indicated that crude oil export sales contributed $267.97million (75.29%) of the dollar transactions, compared with $150.73million contribution in the previous month; while the export gas sales amounted to $87.96million in the month.

The September 2018 to September 2019 crude oil and gas transactions indicated that crude oil & gas worth $5.63billion was exported. The streak of positive results which has largely characterized the operations of the corporation was sustained with the posting of a trading surplus of ₦8.59 billion recorded in the month under review.

The report indicated a significant increase of 65% compared to the ₦5.20billion surplus posted in August 2019.  In turn, according to the report, the August figure of ₦5.20 billion surpassed the ₦4.26 billion surplus posted in the previous month of July 2019, reflecting an increase of 22%, the report said.

The improved surplus posted in the upstream and downstream Sector transactions of NNPC’s subsidiary companies, Integrated Data Services Limited (IDSL), Nigerian Gas Company (NGC), Nigerian Gas Marketing Company (NGMC), Petroleum Products Marketing Company (PPMC), Nigerian Pipeline and Storage Company (NPSC), and Duke Oil Incorporated, explained the significant increase of 65% in the September trading of corporation, the report said.

The MFOR noted that the percentage increase in the performances of these NNPC subsidiaries cushioned the September sharp decline in the results posted by the Nigerian Petroleum Development Company (NPDC) as compared with the company’s posting in August, 2019.

The report said that in the gas sector, 235.12 billion cubic feet (BCF) of natural gas was produced in the month of September 2019, translating to an average daily production of 7,837.42 million standard cubic feet per day (mmscfd). For the period September 2018 to September 2019, a total of 3,106.80 Bcf of gas was produced representing an average daily production of 7,941.69mmscfd during the period.

Period-to-date production from joint ventures (JVs), production sharing contracts (PSCs) and NPDC contributed about 69.43%, 21.14% and 9.43% respectively to the total national gas production, according to the report.

In terms of natural gas off take, commercialization & utilization, out of the 235.12BCF of gas supplied in September 2019, 135.63BCF of gas was commercialized, consisting of 32.25BCF and 103.38 bcf for the domestic and export market respectively.

This translates to a total supply of 1,074.86mmscfd of gas to the domestic market and 3,446.02mmscfd of gas supplied to the export market for the month under review, implying that 57.68% of the average daily gas produced was commercialized while the balance of 42.32% was re-injected, used as upstream fuel gas or flared.

The NNPC said that to eliminate the menace of pipeline vandalism, the corporation in collaboration with the local communities and other stakeholders continuously strive to reduce and eventually eliminate the scourge through collaboration and sustained dialogue. 

By Chibisi Ohakah

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has issued a warning that it is set to shut down crude oil production in Nigeria by Chevron Nigeria Limited (CNL), a subsidiary of the United States super oil major, Chevron Corporation.

The threat followed the demand for the payment of workers entitlements. Last Wednesday, during a protest demonstration, the workers blocked the company’s head office in Lagos, preventing visitors or workers from entry into the premises. It was gathered that only management staff were allowed to enter the building “to enable them hold meeting and make the payments.”

Chevron Nigeria produces over 350,000 barrels of crude oil per day from around 30 oilfields. The company has interests, ranging from 20 to 100%, in three operated and six non-operated deepwater blocks in Nigeria. It is also involved in natural gas projects in the western Niger Delta and Escravos areas, including the Escravos Gas Plant (EGP), the Escravos Gas-to-Liquids (EGTL) facility and the Sonam Field Development Project

“In the coming days, production may be shut down if management does not act fast,” a member of the protesting PENGASSAN workers stated. Speaking on what led to the crisis, the source said “the workers are demanding for their yearly entitlements. We the workers are entitled to certain allowances in every December and January but the management has refused to pay.”

PENGASSAN is also threatening to shut down the company’s oil production facilities in Escravos and other parts of the Western Niger Delta. Since Wednesday, only skeletal activities were ongoing at the major production units as the union allowed only two workers to man each unit, against the normal five to 10 workers.

Chevron has refused to issue a statement on the development leaving newsmen to speculations on the next line of action by the company. Junior oil workers under the auspices of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), had earlier this year threatened to ground operations of the company into a total halt through industrial action.

NUPENG had issued a seven-day ultimatum for the company to recall the 500 staff, it sacked, including members of its executives affected by the exercise. Chevron was accused of planning to sack more than 70% of its labour manpower, under the guise that its operations in Nigeria had reduced.

South Korea’s Daewoo Engineering & Construction Co. has confirmed that the state ministry of economy and finance has agreed to provide finance for the $5.7 billion liquefied natural gas (LNG) plant project awarded by the Nigerian government.

The company said the decision was reached last Monday when the finance ministry and related organizations met and agreed to back the project “as part of the Korean government’s new financing policy to encourage local builders to venture into high-risk countries,” Hellenic Shipping said in a statement yesterday

With the latest deal, Daewoo E&C became the first Korean builder to clinch an LNG plant contract overseeing the entire process from front-end engineering design (FEED) to engineering, procurement and construction.

“It’s hard for Korean companies to obtain financing in countries like Nigeria, which has a low credit rating due to violent riots and political instability. The Export-Import Bank of Korea and the Korea Trade Insurance Corporation would be the primary backers, with the government providing additional support,” the statement quoted a Korean finance ministry official.

The country’s Vice Finance Minister, Kim Yong-beom, who chaired the Monday meeting, said the government would closely monitor this year’s pipeline of overseas projects and adjust plans to keep up with the fast-changing global infrastructure market.

He also had a luncheon with major construction firms after the meeting to assess their current project status and hear out their grievances when doing business abroad.

By Chibisi Ohakah

American engineering company, KBR has won the project management consultancy services contract for front-end engineering design (FEED) definition at the Nigerian National Petroleum Corporation (NNPC) headquarters, Abuja. KBR, Inc. (formerly Kellogg Brown & Root) construction company, was formerly a subsidiary of Halliburton.

According to the terms of the contract, KBR, as co-consultant with the National Engineering and Technical Company Ltd (NETCO) will provide technical consultancy services for four greenfield refineries in the ANOH and Western Forcados area.

The work is expected to be performed over a six-month period with KBR providing strategic advisory consulting on elimination of condensate from oil export streams which will reduce dependency and expense of imported refined products. The work will be conducted from KBR’s Leatherhead office in the U.K. with support from the Middle East and Houston.

The main objective of the project is upgrading gas condensate to valuable refined fuel products. This reduces the country’s dependence on costly imported fuels and is well aligned with KBR’s gas monetization and asset optimization strategies. Together, these strategies provide a valuable, sustainable solution to Nigeria in matters of fuel security, economic development and regional capacity building.

“We are delighted to be part of this strategic project supporting a prestigious partner to deliver the transition to an increasingly sustainable energy solution for Nigeria,” said Jay Ibrahim, KBR President, Energy Solutions – Services. “The work will be undertaken by KBR’s consulting team, where our strategic master-planning capability resides to help customers improve their sustainability, energy efficiency and maximize asset performance.”

Ibrahim said KBR is leading the industry to meet the world’s ever-growing energy and chemicals demands. From an expanding portfolio of greener, cleaner solutions to its comprehensive feasibility study solutions, KBR is supporting the world’s transition to a clean energy future.

…’Fossil fuel has its days and years numbered’

Nigerian’s minister for environment, Mohammed Abubakar, has said that Nigeria future with oil and gas is bleak, and the earlier the country began to look beyond fossil fuel, the better, as the world inches onto a low-carbon path.

Abubakar said on Wednesday that he did not see a long-term future for Nigeria’s oil industry if governments follow through on their promise under the 2015 Paris Agreement to cut planet-warming emissions to net-zero by the second half of the century.

“These days, anything to do with fossil fuel… may have its days numbered, or years numbered,” he told the Thomson Reuters Foundation at this month’s U.N. climate talks in Madrid. The minister said Nigeria should use the royalties and export earnings it receives from oil – which account for about half of its revenues – to invest in alternative sources of energy, in order to “be ready” for a global transition to cleaner energy.

“If the world is truly willing… to quit fossil fuel, then if you are not ready and finally the world comes to terms with that and there are alternatives and no one is buying enough oil from you, at that point you are in trouble,” he said

According to him, Nigeria has started to diversify into renewable power generated from solar, wind and waste and is moving its universities onto solar power systems. He hinted further that the country is also making efforts to end gas flaring from oil-industry operations on its soil by 2030, as part of its national climate action plan submitted to the United Nations.

Burning off the gas is a waste of energy and a major source of planet-warming emissions, and Nigeria is procuring technology to capture the gas instead to produce power or heat water, said the minister, a biologist, and environmental protection expert.

Nigeria climate action plan also pledges to improve its energy grid and expand the use of efficient gas power plants, in an effort to cut widespread use of polluting diesel generators. The country has an overall target of cutting its emissions by 45% by 2030 from 2010-2014 levels, conditional on receiving international support to achieve that.

Like many other emerging economies, Nigeria is seeking funding from wealthy governments to pursue low-carbon development and adapt to climate change impacts such as creeping desertification in the north and rising sea levels affecting its coastal areas.

Abubakar said finance was “very critical” for Nigeria and called for processes to gain access to it – which many countries struggle with – to be “made easy”. Nigeria faces what the minister called significant “climate disruption”, such as the shrinking of Lake Chad to less than a tenth of its size in 1960, depriving local fishermen and farmers of their livelihoods and forcing them to leave their homes.

The lake’s deterioration was one reason Islamist insurgent group Boko Haram had flourished in the region, he added.

At the same time, Nigeria faces a huge task to repair the environmental damage caused by oil extraction in the Niger Delta, which has contaminated water supplies and soils as a result of spills. International oil companies have recognized their role in causing that pollution, and agreed to provide about $1 billion to restore the affected areas, Abubakar said.

Reuters said the minister recently visited some of the roughly 20 sites where clean-ups are underway so far and met with the companies and United Nations officials in Geneva to review progress.

Businesses that exploit fossil fuels, gold, diamonds or other resources in Africa should be held accountable if those activities harm local communities, the minister said. “Wherever there is oil or mining or whatever it is, let them pay for the clean-up but also for the restoration of livelihoods of the people that are being displaced there,” he added.

By Chibisi Ohakah

Programme Coordinator, Nigeria Natural Resource Charter (NNRC), Tengi George-Ikoli has called for better management of Nigeria’s oil and gas resources with a view to repositioning the country as one of the fastest growing economy in the world.

George-Ikoli, who made the appeal at the presentation of soft media launch of NNRC’s 2019 benchmark exercise report in Abuja, expressed worry that Nigeria’s over reliance on oil, undiversified revenue base and other economic and social factors accounted for the poor management of its petroleum resource wealth.

According to her, while Nigeria’s resource strategy is strengthened in 2017 with the approval of the national oil and gas policies by the Federal Executive Council, they are yet to be fully implemented.

The meeting explored Nigeria’s performance against 12 pre-conditions to effective resource management proposed by the NNRC to determine how far or close Nigeria might be in achieving its objectives. The report is the fourth in the series of benchmarking exercise reports produced by NNRC, carried out to provide an assessment of governance on Nigeria’s petroleum wealth. The previous reports were published in 2012, 2014 and 2017.

Also at the meeting, Mr Opaluwa Enebi, Research Associate, Centre for Public Policy Alternative, said that the government has acknowledged Nigeria’s unhealthy dependence on oil and gas resources, but nevertheless, the implementation of the oil and gas strategy fell short of set targets in policy documents.

Enebi emphasised the need to make decisions that appear not to ignore prevailing global oil market conditions, adding that the launch of publicly available beneficial ownership register may help address ownership and transparency issues regarding oil and gas resources. While commending the Nigerian government for taking steps to address gas flaring through the kick off of Nigerian gas flare commercialisation programme, he said that the sovereign wealth fund recorded growth in the period under review.

“Domestic gas utilisation improved significantly in the period under review largely driven by demand from the power and industrial sector, however, liquidity challenges in the power sector threatens successes,” he said. Enebi pointed out that effective oversight functions of the National Assembly had yielded positive results to the growth of the sector.

According to him, some oversight activities have resulted in prosecution and conviction of some indicted persons. He noted that specific recommendations for sanctions had also been transmitted to the executive arm of government for implementation.

“Audit office is still experiencing capacity challenges as many Ministries Departments and Agencies (MDAs) are still non-compliant with submission of audit reports to Office of the Auditor General of the Federation. “Investigation and prosecution of corruption has continued during the review period. However, harassment of whistle blowers may threaten effectiveness of the policy.

“Critical pieces of legislation suffered setbacks during the review period and this includes the PIGB, whistleblowers protection Act, Witness protection program Act, Company and Allied Matters Act (CAMA),’’ Enebi said

The Petroleum Products Pricing Regulatory Agency (PPPRA) has said that fuel subsidy is now N21.22Kobo per litre. A data released by the agency on Monday showed that shows that the average daily truck-out volume of PMS (petrol) loaded for the week from various depots for supply to retail outlets was 58.46 million litres.

The subsidy amount of N21.22Kobo per litre therefore amounts to N1.2billion, given the quantity of fuel supplied to the outlets daily, nationewide. The Executive Secretary of the agency, Abdulkadir Saidu, gasoline (petrol) price at the international market averaged $582.80 per metric tonne. Landing Cost and Expected Open Market Price (EOMP) averaged ₦146.85/litre and ₦166.22/litre respectively for NNPC imports only.

He explained that due to the cost of financing component built into other marketers’ imports landing cost and EOMP PMS price averaged ₦149.86/litre and ₦169.23/litre respectively.

The weekly data covering 28th November 2019 to 4th December 2019, stressed that the Central Bank of Nigeria (CBN) official exchange rate averaged N306.97/$ and the parallel market rate was stable and averaged N360.00/$ during the period.

It also noted that the reference freight rate from North West Europe (UK-Coast – UKC) to West African Frontier (WAF) averaged $30.87 per metric tonne, the rate decreased when compared to previous week’s average of $35.45 per metric tonne.

The agency maintained that the total Petrol receipt for the period (28th Non – 4th Dec 2019) was 473,602 million litres, diesel 68,366 million and aviation fuel 20,327 million litres. The average daily discharges of PMS for the week stood at 67.66 million litres.

By Chibisi Ohakah

Nigeria’s three moribund refineries are ran a loss totaling N111.27 billion between January and September 2019, a report from the Nigerian National Petroleum Corporation (NNPC) has said in its September report. The report noted that the refineries posted a loss of N96.31 billion in the same period in 2018.

Owned wholly by the federal government of Nigerian, the refineries are located in Port Harcourt, Kaduna and Warri, and have a combined installed capacity of 445,000 barrels per day. However for over two decades, the refineries have been moribund and have continued to operate far below the installed capacity.

The report said collectively the refineries lost N8.362 billion in January; N10.26 billion in February; N16.04 billion in March; N11.44 billion in April; N13.63 billion in May, and N17.42 billionn in June. It said the plants recorded a loss of N13.84 billion in July; N13.21 billion in August and N7.07 billion in September.

The report stated that the Kaduna refinery did not process any crude in eight months, and therefore lost N44.06 billion. On the other hand, the Warri refinery was recorded as losing N33.88 billion, having not processed any crude oil in April, June, July, August and September.

Port Harcourt refinery posted a loss of N33.31bn as it was idle in January, April, May and June, July, August and September. “Similar to August 2019, no white product (petrol and kerosene) was produced in September 2019. The lack of production is due to ongoing rehabilitation works at the refineries,” the corporation said.

The NNPC said it had been adopting a merchant plant refineries business model since January 2017. It said the combined value of output by the three refineries (at import parity price) for September amounted to N1.03 billion.

“No associated crude plus freight cost for the three refineries since there was no production while operational expenses amounted to N11.24 billion. This resulted in current operating deficit of N10.20 billion and an adjusted deficit of N7.07 billion by the refineries; after adjusting for prior overstated deficits by PHRC,” the NNPC said

Nigeria relies largely on importation for refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.

By Chibisi Ohakah

Group Managing Director of the Nigerian National Petroleum Cor­poration (NNPC), Mele Kyari, has said that the Brass Fertilizer and Petrochemical project, when completed, would lead to sustainable prosperity for Nigeria.

Kyari, who spoke while inaugurating the board of the company last Monday, implored members of the board of directors of the company to resolve issues of gas supply in the country, and ensure deeper penetration of the product into the hinterlands.

The NNPC boss also urged the board to squarely address the issue of technical capability and funding confronting the company and come up with viable bankable options that could help drive the project to fruition.

According to him, the Brass Fertilizer and Petrochemical Company project has potential to boost the nation’s economic growth due to its methanol and fertilizer components which he said could facilitate growth in the agricultural sector.

 “I know that this project is important to all of us. Monetising gas for us is everything because this is a gas country. There is huge po­tential in gas development and our focus is to add value to gas locally. That means deepening the utilisation of gas in-country. Our interest is always on things that will add value to our local market and local economy”, he said.

Speaking on behalf of other member of the board, the chairman of the board and NNPC Chief Operating Officer, Gas and Power, Engr. Yusuf Usman, said that the project was important for both the corporation and the country. He assured the NNPC helmsman that the board will deliver on its mandate with the cooperation of all stakeholders. He expressed delight that the board had finally been inaugurated, adding that his company was fully committed to the project.

Brass Fertilizer & Petrochemical Company Limited is developing an ammonia and methanol plant at Brass Island in Nigeria’s Bayelsa state. The project is positioned to serve the large, growing and captive market for urea and ammonia in Sub-Sahara Africa and exporting methanol to the global market.

It will be comprised of seven principal facilities: A 595 hectare greenfield site that has been granted an export processing zone licence. It also contains a gas pipeline which will transport 500 mmscf/d of wet gas, 30km from SPDC project dedicated gas fields in OML 32/33 to the plant site. There is a dedicated gas processing plant with a processing capacity of 300 mmscf/d

The project has a urea plant which will produce 3,850 TPD (1.3 MTPA), an ammonia plant which will produce 2,200 TPD (770 KTPA) of ammonia. There is a methanol plant which will produce 5,000 TPD (1.75 MTPA) of methanol. The Project will include 50,000 tons of ammonia storage, 150,000 tons of methanol storage and 50,000 tons of condensate / LPG storage.

There is a Captive Export Jetty which will have 2 berths that can handle vessels of up to 35,000 DWT with a loading rate of 2,000 tons/hr.

By Chibisi Ohakah

Team Beleuzi, a 100% Nigerian-owned vessel, and first daughter of Team Offshore Nigeria, has been unveiled in Lagos. The ceremony was held at the Naval Dockyard in Lagos. Team Offshore Nigeria is a leading indigenous offshore support service provider in the Nigerian oil and gas industry.

The ceremony was attended by several government officials and distinguished delegates from the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Content Development and Monitoring Board (NCDMB).

Afolabi Caxton-Martins, Managing Partner at ACAS Law, owners of Team Offshore Nigeria said, “At Team Offshore, our mission has been to focus on maximising our Nigerian content contribution and creating in country value, through investment for growth and local employment. Team Beleuzi, which is a 100% locally owned vessel, highlights our commitment towards value creation through our continuous and increased investment in the maritime sector in Nigeria.”

He explained that Team Beleuzi is a Platform Supply Vessel (PSV) built in 2019 and is currently located in the Nigerian Naval Dockyard in Lagos. Team Beleuzi is designed to transport supplies and equipment to and from offshore installations, in addition to supply drilling equipment, drilling bulks, fluids and pipes.

Mrs. Funke Agbor, partner at ACAS Law owners of Team Offshore was formally named as Team Beleuzi’s Godmother.

By Chibisi Ohakah