Thursday, March 28, 2024
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Major Oil Marketers Call For Full Automation Of The Sector

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The Major Oil Marketers Association of Nigeria (MOMAN) has called for the automation of the industry in order to facilitate transparency in the downstream sector of the oil industry.

The group also identifies that inadequate investment in modern technology to drive data collation is a major factor affecting initiatives to promote transparency and accountability in the country’s downstream oil industry.

Speaking at a virtual “Workshop On World International Data Day” in Lagos, the executive secretary of MOMAN, Mr. Clement Isong, said the importance of data and automation in the downstream business cannot be overemphasized.

Also Read: Nigerian Gas Fuels Morocco, Algeria Pipeline Power Struggle

According to him, automation will ensure transparency and boost excellent customer service, eliminate fraud, and corruption and clean up the reputation of the industry.

He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to invest in infrastructure for data gathering.
“Our position in MOMAN is that we are looking for the automation of the entire supply chain. It will mean everybody needs to invest in order to optimise their businesses. The beneficiary eventually will be the customer,” Isong stated.

The MOMAN scribe said it is good for corporate governance. “It removes people’s ability to steal and the authority (NMDPRA) itself has got to  invest in infrastructure for data gathering and has got to do a preliminary analysis of that data and has to put up that information on its website which investors, marketers operators, and everybody can access.”

By Ken Okoye

Saipem Assures That Mozambique’s LNG Project Will Restart In July

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Italian engineering contractor, Saipem, has assured that it is restarting work this July on TotalEnergies LNG project in Mozambique.
The 12.9 million metric tons/year project was suspended in 2021 amid rising violence in the region. 

Speaking during the company’s year-end call, the chief executive officer of the company, Mr. Alessandro Puliti, said it would gradually restart work on the project, “according to the information received by our clients.”

However, TotalEnergies has not confirmed publicly that the project is resuming. The company had commissioned a report to examine the humanitarian situation in the region, which was due at the end of last month.

Also Read: Nigerian Gas Fuels Morocco, Algeria Pipeline Power Struggle

Whereas the report is awaiting action, it is expected to help the project’s partners make a decision about restarting work.
Enbridge Inc. said it would acquire 35 Bcf of natural gas storage along the Gulf Coast for $335 million to support its export strategy. Enbridge said the Tres Palacios assets serve Texas gas-fired power generation and increasing LNG exports in the region. The deal is expected to close in 2Q2023.

U.S. natural gas futures declined last weekend, ending a six-day rally after a weak winter storage withdrawal and warmer weather weighed on prices. The latest U.S. withdrawal left inventories at 2,114 Bcf, well above the year-earlier level of 1,663 Bcf and the five-year average of 1,772 Bcf.

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

European gas prices also continued to fall despite frigid weather. High LNG deliveries and Freeport LNG’s partial return to service in the U.S. continues to keep a lid on prices that have traded below $15/MMBtu this week.

By Ken Okoye

World Bank Advances $64m For Solar Energy And Electricity Storage In Togo

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The World Bank has announced the advancement of $64.2 million financing for the electrification of at least 60 localities as part of projects initiated the World Bank.

The $64 million financing agreement was signed between Sani Yaya, Togo’s minister of economy and finance, and Coralie Gevers, the World Bank’s director of operations for Togo.

The funding will enable the installation of 1,858 street lamps for public lighting and the electricity of 12,100 homes in rural areas.
It was explained that the funding is part of a $311 million package committed by the World Bank under the Regional Solar Emergency Response Project (RESPIT).

Also Read: Burkina Faso Launches Africa UN-Led Minigrids Program For Rural Electrification

The initiative aims to “rapidly” increase grid-connected renewable energy capacity and strengthen regional integration in a number of countries, including, Togo, Chad, Liberia and Sierra Leone.

According to the plan, Respit will build a 25 MWp solar photovoltaic power plant in Dalwak, near the northern town of Dapaong on the border with Burkina Faso.

The plant will be equipped with a 40 MWh battery storage system, which will allow the electrification of 60 localities in northern Togo. In rural areas, the World Bank financing will allow the electrification of 12,100 households and the installation of 1,858 street lamps for public lighting.

Also Read: Snake Island Free Trade Zone Adopts Solar Power Supply

According to the Togolese government, Respit will “accelerate the achievement of the electrification strategy objectives set out in the Roadmap 2025, notably universal access to electricity by 2030”.

Lomé alone is aiming for a 75% electrification rate by 2025. In Liberia, where Respit was recently launched with $96 million in World Bank funding, a 60 MWp solar photovoltaic plant will be built near the Mount Coffee hydroelectric dam in Montserrado County.

By Ken Okoye

Burkina Faso Launches Africa UN-Led Minigrids Program For Rural Electrification

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The Africa Minigrids Program (AMP) recently launched in Burkina Faso as the country aims to increase rural electrification through access to solar energy.

Reports say just about 10% of the population in the country’s rural areas has access to electricity, out of a total population of over 22 million.

The collaborators on the project include, United Nations Development Programme (UNDP), the ministry of energy, mines and quarries (MEMC) of Burkina Faso, and the Global Environment Facility (GEF).

The UNDP-led program will run in the country till January 2027 for a total cost of 1,086,476,580 CFA francs (USD1.75 million).
The AMP national project in Burkina Faso aims to increase access to clean energy by promoting large-scale commercial investment in solar photovoltaic mini-grids in the West African nation.

The AMP project will primarily focus on enabling innovation and technology transfers in decentralized solar energy distribution as well as battery storage solutions.

Also Read: President Buhari Inaugurates Maidugiri Emergency Power Project

The country’s rural electrification agency said the AMP project is being implemented by the Agence Burkinabè de l’Electrification Rurale (ABER).

The program supports Burkina Faso’s COVID-19 recovery efforts and strengthens the resilience of underserved communities. ABER will implement the mini-grids program through several components. This includes policy and regulation, innovation and private sector business models, large-scale financing, use of digital tools & solutions, knowledge management, and evaluation of the projects.

The model of the program is developed such that it will enable removing the political and institutional obstacles that may hinder investments in renewable energy mini-grids. The mechanism facilitates access to low-cost commercial capital including equity and debt in local currency. This will reduce mini-grid costs and ensure the long-term commercial viability of the mini-grid market.

Although the overall electrification rate has already increased in Burkina Faso over recent years, the rate has remained low due to the costly electrification method. The rise of digital technologies and the adoption of the private-sector business model have made solar-battery mini-grids to become a competitive option to provide electricity to off-grid areas in the country.

Also Read: Snake Island Free Trade Zone Adopts Solar Power Supply

The project will be active in seven municipalities across several regions including the Boucle du Mouhoun, Cascades, Center, Center-Nord, Center-Est, Nord, and Plateau-Central. The mini-grid program is expected to significantly contribute to the country’s rural electrification efforts.

The UNDP-led program will run in the country till January 2027 for a total cost of 1,086,476,580 CFA francs (USD1.75 million).
UNDP estimates that mini-grids are the least-cost option to provide electricity to nearly 265 million people in 21 countries where the AMP project is implemented, for a total investment opportunity of $USD 65 billion.

The program was launched in Somalia earlier this month, with additional national projects to start implementation in Africa throughout the year.

By Bosco Agba

Plot By UAE To Quit OPEC Thickens

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There are top level discussions within the polity of the United Arab Emirates about the prospects of leaving the Organization of Petroleum Exporting Countries [OPEC].

Made up of seven emirates – Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al-Khaimah, Sharjah and Umm Al-Quwain, the UAE joined OPEC in 1967.

Whereas OPEC accounts for nearly 38% of world’s total crude oil production, observers believe that the decision of the UAE to quit the group will hurt the group’s capacity to control activities and price-setting powers in the sector.

Wall Street Journal [WSJ] said yesterday that there is uncertainty regarding the UAE’s participation in the Organization of Petroleum Exporting Countries, considered that the rift between UAE and OPEC’s de facto leader Saudi Arabia appears to be widening over the war in Yemen.

Also Read: Nigeria’s New Oil Output Boosts OPEC’s Target in February – Survey

Over the last year or so, the WSJ reported, relations between the two have soured, with UAE’s President Sheikh Mohammed bin Zayed al Nahyan and Saudi Arabia’s Prince Mohammed often missing events where the other was expected to be in attendance. What’s more, the WSJ has said.

The rift actually began before that, in mid-2021, over the OPEC production cuts.—a rift that, at the time, threatened to sink the group’s entire plan for its production cuts, WSJ said a report.

Some analysts at the time even believed that the disagreement between the two OPEC heavyweights could lead to a repeat of the 2020 oil price war.

Another bone of contention is the war in Yemen, where the UAE is hoping to keep its influence in the country to secure shipping routes in the Red Sea, while Saudi Arabia has been having talks with Houthi rebels – without the UAE – in hopes of ending the war.

Meanwhile, the UAE has signed a security agreement with the Saudi-backed Yemeni government that allows the UAE to intervene if there is an imminent threat—and they’re looking to build a military base and runway in the Bab al-Mandeb strait—but, according to the WSJ, Saudi officials have privately objected to this agreement.

Also Read: ‘If Market Changes, OPEC+ Would Adjust Output Policy’

The United Arab Emirates is currently producing more than 3 million barrels of crude oil per day, and is OPEC’s third most prolific producer.
Analysts say an OPEC fracture would give more market clout to non-OPEC producers such as the United States, Canada, and Brazil – and crude oil purchasers such as China, India, and Japan.

The UAE has long been rumored to be in opposition to OPEC’s plans to drastically cut its crude oil production as part of its agreement with OPEC+.

President Buhari Inaugurates Maidugiri Emergency Power Project

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President Muhammadu Buhari has inaugurated the Maiduguri Emergency Power Project. He said the project is a testament of the zeal by his administration to achieve a stable, uninterrupted power supply.

The giant gas plant, constructed by the Nigeria National Petroleum Company Limited (NNPC Ltd), would supply 50 megawatts of electricity to Maiduguri and its environs.

According to him, his administration has worked hard enough to tackle the perennial power challenges facing the country, and now has laid the foundation for a strong, prosperous country through the Economic Recovery and Growth Plan.

“The Maiduguri Emergency Power Project is part of an incremental 4,000MW of power generating assets that this administration embarked upon to improve national power supply and stimulate economic growth.

Also Read: Snake Island Free Trade Zone Adopts Solar Power Supply

“The aggressive project strategy deployed to complete this project on schedule is a total reflection of Federal Government sensitivities in identifying and easing the plight of the Nigerians; particularly those recovering from the adverse impact of the insurgency in this North-east region.

“Over the past few years, insurgents had attacked power supply lines along Maiduguri-Damaturu and Maiduguri-Damboa-Biu roads leading to acute power supply shortages to the city of Maiduguri and its environs and crippling the economic activities in the region.

”For this purposeful response, I want to commend the NNPC Ltd for following my directive to ensure the immediate restoration of reliable power supply to Maiduguri within the shortest possible time,” the President said.

Also Read: Mainstream Energy Solutions Wins Selected Bidder for Zungeru Hydropower Plant

Buhari assured that he is committed to resolving the resolve to implement programmes, particularly in the power sector, that deepen domestic gas utilization, expand national power generation capacity, revitalize industries and create multiple jobs for economic growth.

He directed the ministry of power and other relevant agencies namely, the Nigerian Electricity Regulatory Commission, Nigerian Bulk Electricity Trading Plc, and Transmission Company of Nigeria to continue to collaborate with NNPC Ltd to ensure that millions of Nigerians access affordable electricity in the short term.

Snake Island Free Trade Zone Adopts Solar Power Supply

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A rooftop solar power plant has been adopted for the Snake Island Integrated Free Zone in Lagos.
The solar power plant is the first step towards the development of a 20 MWp installed solar capacity desired by the shipping company Nigerdock.

The recently opened facility is the result of collaboration between Daystar Power, a solar energy company based in Lagos, and Nigerdock.
The authorities of Nigerdock say that the solar power facility’s main goal is to lessen the Snake Island Integrated Free Zone’s environmental impact.

Also Read:

The chief executive officer of Nigerdock, Maher Jarmakani, said after a few days of operation, the solar system can supply 40% of the company’s electricity requirements, cutting its annual carbon dioxide (CO2) emissions by 2,000 tonnes.
The system is a component of Nigerdock’s proposal to outfit the Snake Island Integrated Free Zone with multiple solar power plants totaling 20 MWp installed capacity.

The company is a frontline, maritime business putting its faith in solar energy to lessen its reliance on the Nigerian national grid.
The company is a leading Nigerian maritime company operating the largest multipurpose seaport and Free Zone in Lagos, servicing customers in the shipping, logistics, and manufacturing sectors.

A few months ago, Seven-Up Bottling Company (SBC) and solar energy provider Daystar Power inked a contract for the installation of multiple solar systems with a total capacity of 10.5 MWp to power SBC’s plants in the cities of Abuja, Lagos (Ikeja), Ibadan, and Ilorin.

By Bosco Agba

China Dominates Russian Crude Oil Exports, Doubling Down On Steep Discounts

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China is reported to be snapping Russia’s seaborne oil exports, hitting a record high in March as the former snaps up the commodity at huge discounts.

China is expecting a whopping 43 million barrels of crude oil from Russia in March, according to tanker tracking companies Vortexa and Kpler,

The figure tops the previous high set in June 2020, when China snapped up 42.48 million barrels, according to the news outlet. China dominated the league of Russia’s oil patrons since President Vladimir Putin invaded Ukraine last year.

In February, Russia sold the most crude and fuel oil to China since launching its war against Ukraine, delivering 1.66 million barrels a day.
With its ties with the West under strain, Moscow has emphasised a “no limits” strategic partnership with China. Russia is aiming to hit $200 billion of trade with China this year as it seeks to take the relationship to a new level.

Also Read: Oil Prices Dip As Market Await Chinese Demand To Rebound

The increased buying from Chinese refiners comes as the world’s second-largest economy emerges from zero-COVID policies, stoking demand for energy. It’s also been snapping up Russian crude in the absence of Western buyers, which has subsequently led to lower prices for Asia. 

Analysts cited by Reuters said Russia’s flagship crude Urals was trading at a $14-a-barrel discount to the global benchmark ICE Brent Crude. However, robust demand from China is likely to elevate prices and reduce those steep discounts, the news outlet cited a China-based oil trader as saying.

The price of Russian oil could also rise as Moscow threatens to retaliate against price caps imposed by the West, by potentially slashing 25% of its crude exports from the spot market.

By Ken Okoye

Egypt Moves To Contain Impact Of Increase In Fuel Pump Price

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…Raise Minimum Wage, Pension From To April 1

Egypt has announced a package of wages and pension increases to make residents contain the effect of soaring prices.
Yesterday, the country’s fuel pricing committee raised domestic fuel prices by 0.75 Egyptian pounds ($0.025) for 80-octane petrol to 8.75 pounds a litre, and by one pound to 10.25 pounds for 92-octane fuel.

The committee also raised the premium 95-octane petrol by 0.75 pounds to 11.50 pounds a litre. The price of natural gas for vehicles was also increased from 3.75 pounds a cubic metre to 4.50 pounds.

The price of diesel, widely used for the transport of goods and passengers across the country, remains at 7.25 pounds a litre, the committee said.

Shortly before the announcement yesterday came only hours after the authority raised domestic fuel prices by more than 10%, a move that is likely to increase inflation.

Also Read: Africa’s New Extraction Maths: Less Oil, More Gas

President Abdel Fattah El Sisi announced the new packages on national television said the said that volume into effect on April 1.
It raises the minimum monthly wage for entry-level government employees to 3,500 pounds ($116) and to 5,000 pounds for mid-ranking employees. The minimum wage for government workers with a master’s degree will now be 6,000 pounds, while those who hold a doctorate will receive 10,000 pounds.

Pensions will be raised by 15% and the threshold of collecting income tax will rise from 24,000 to 30,000 pounds per annum. Monthly stipends for the most vulnerable of Egypt’s 104 million people under a state programme called Takaful and Karamah will be raised by 25%.
“I would like to clearly state that I have the interest of the Egyptian citizen constantly before my eyes, with the goodness of his life a specific target we never steer away from,” said Mr. El Sisi in his address delivered at a ceremony in South Cairo to open development projects in Minya, a province south of Cairo.

“As much as I realise the magnitude of pressure citizens have to endure at present, I also have confidence in their ability and self-denial as they face challenges,” said Mr. El Sisi, who has been in office since 2014.

There had been several similar palliatives in the past year. Egypt, who is the most populous Arab state, is reeling from a deep economic crisis significantly worsened by the outbreak of the Russia-Ukraine war a year ago.

Also Read: Nigeria’s New Oil Output Boosts OPEC’s Target in February – Survey

The crisis led Egypt to devalue its currency by nearly 50% and sparked a foreign currency crunch that has curbed imports, including vital materials needed for domestic industries.

The latest fuel price increases will probably raise the cost of other goods at a time when most Egyptians are believed to be facing the challenges of an ailing economy.

Year-on-year inflation rose to 25.8% in January — a five-year high — chiefly because of rising food prices. Experts expect figures to show it rose further in February.

The government turned to the International Monetary Fund for help, reaching a deal last year for a $3 billion loan to shore up its finances.
The IMF agreed to the deal in return for major reforms, including a flexible foreign exchange regime and the private sector being allowed a greater role in the economy. The government announced last month it was offering investors stakes in 32 state-owned enterprises, including two banks.

Observers in the pro-government media say fuel subsidies have increased in the first half of the current fiscal year, which began on July 1. They say it stood at 66 billion pounds, up from 17 billion in the corresponding period of the previous year.

Also Read: Natural Gas Prices Could More Than Double In 2024

It increase was attributable to increase of oil prices on world markets and the government’s earlier reluctance to raise domestic fuel prices.

By Bosco Agba

Nigerian Gas Fuels Morocco, Algeria Pipeline Power Struggle

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Adversaries Morocco and Algeria are each racing to build a conduit pumping Nigerian gas to European markets, even as the continent aims to wean itself off fossil fuels.

Both countries have moved to revive long-stalled projects in light of a gas supply crunch following Russia’s invasion of Ukraine a year ago. Prices surged and Europe-which was heavily reliant on Russian gas-had to look elsewhere for energy.

Rabat is hoping the Nigeria-Morocco Gas Pipeline, which would skirt the coastlines of 13 West African countries, could pump billions of cubic meters of natural gas to the kingdom. From there, the gas would flow through the Maghreb-Europe gas pipeline (GME) into Spain and Portugal.

Nigeria’s oil minister, Mr. Timipre Sylva told AFP that a feasibility study was underway and some countries had already signed up to the project, but a start date has yet to be set.

To the east, Morocco’s neighbour and arch-rival Algeria is pushing to relaunch plans for a Trans-Saharan Gas Pipeline linking Nigeria to Algeria’s Mediterranean coast via Niger.

Last July, Algiers signed a memorandum of understanding with Abuja and Niamey to bring the 4,128-kilometre (2,565-mile) pipeline to fruition, at a cost of up to 18 billion euros ($19 billion).

Also Read: Nigeria’s New Oil Output Boosts OPEC’s Target in February – Survey

From Algeria the gas could be pumped via the Mediterranean undersea Transmed pipeline to Italy through Tunisian territory, or loaded onto liquefied natural gas tankers for export.

Complex
The renewed momentum on both projects follows months of heightened tensions between Algeria and Morocco after the collapse of a decades-old ceasefire in the Western Sahara and Morocco’s normalization of ties with Israel in late 2020.

In August 2021 Algiers cut diplomatic links with Rabat altogether, accusing it of “hostile acts”, which Morocco denies.
Later that year, Algeria declined to renew a 25-year deal to pump gas through Moroccan territory to Spain in exchange for gas that covered almost all of Morocco’s needs. The loss of that gas helps explain Morocco’s drive to make its 6,000-kilometre pipeline project, launched in 2016, a reality.

Morocco’s deal with Nigeria and their West African neighbors is set to cost 23 billion euros, but Sylva noted that the project would involve complex negotiations. “There are certain agreements that you must sign with every country” on the route, he said.
Rabat and Abuja did make progress last year, signing MoUs with seven of the 13 countries in question as well as with the Economic Community of West African States, a regional bloc.

Rabat is hoping the pipeline, combined with Nigeria’s vast hydrocarbon reserves, can create “a stable, predictable and mutually profitable gas market”, said Moroccan researcher Jamal Machrouh.

Also Read: Natural Gas Prices Could More Than Double In 2024

Europe has a “strategic interest” in the project, Machrouh added. At the same time, Algeria is pursuing anew its own similarly challenging pipeline, started in 2009. The project would have to pass through thousands of kilometres of desert including some areas where jihadist groups have waged a long insurgency.

‘Hugely vulnerable’
Algeria is Africa’s biggest gas exporter and the third-largest gas provider to Europe. Algerian expert Ahmed Tartar said the pipeline project could be finished within three years and would “meet an important part of Europe’s future needs”.

But Maghreb geopolitics expert Geoff Porter told AFP in September that “a pipeline like this would be hugely vulnerable, not just to attacks by jihadists but also by local communities if they feel they’re getting exploited by a project from which they derive no benefit”.

“Then there’s the bureaucratic element, which is extremely complex,” he added. “Then, who’s going to finance it?” Algeria’s Energy Minister Mohamed Arkab said on February 18 that technical studies were underway. He insisted that “this African project will benefit the countries it crosses”, and even neighbouring ones.

Both pipelines could be viable for Europe, as the continent would not want to overly rely on “a single player” for its energy supplies, Machrouh said. But they would also come online as Europe engages in longer term efforts to wean itself off fossil fuels-including gas.
During a January visit to Rabat, EU foreign policy chief Josep Borrell said of the pipeline: “You have to consider when it will be finished. Will we still want to use gas, methane?”

Also Read: NNPC Finally Quits Space As State Corporation

Borrell suggested Morocco could focus efforts on its enormous wind and solar energy potential as well as selling hydrogen to Europe. A senior European diplomat, speaking to AFP on condition of anonymity, put it more bluntly: “In the future, we won’t be buying gas anymore.”

AFP

Nigeria’s New Oil Output Boosts OPEC’s Target in February – Survey

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A survey has revealed that oil output by the Organization of Petroleum Exporting Countries (OPEC) rose in February led by a further recovery in Nigerian supply by as much as 100,000 additional barrels per day.

According to the survey, OPEC’s Gulf producers Saudi Arabia, Kuwait and the United Arab Emirates maintained high compliance with their targets under the OPEC+ agreement.

Nigerian output posted OPEC’s biggest increase of 100,000 bpd in February, the survey found, bringing the country closer to a target to lift output to 1.6 million bpd this quarter.

Nigeria had recently begun to curb the massive oil thefts through the collaboration of security forces, community groups and the government agencies in the sector.

The oil cartel pumped 28.97 million barrels per day (bpd) in the month under review, the survey found, up 150,000 bpd from January. However, OPEC output is still down more than 700,000 bpd from September.

Also Read: ‘If Market Changes, OPEC+ Would Adjust Output Policy’

This is despite strong adherence by top producers to an agreement by the wider OPEC+ alliance to cut production to support the market during this period.
The second-biggest increase came from number two OPEC producer, Iraq, which according to Refinitiv Eikon data and other companies that track the flows, has boosted southern exports this month.

The increase from the south outweighed a drop in northern exports via the Turkish port of Ceyhan, which were briefly disrupted by the earthquake that struck Turkey and Syria, Reuters stated.

In the last couple of years, Nigeria has been unable to meet its OPEC production quota and has therefore failed to take advantage of high International oil prices.

Two bodies While the Nigerian National Petroleum Company Limited (NNPC) has said that current production is over 1.6 million bpd, in January, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) put the figure at over 1.25 million bpd.
Many crude streams exported more in February, the survey found, although Africa’s top producer is still pumping much less than its OPEC target.

OPEC and its allies, known as OPEC+, had been boosting output for most of 2022 as demand recovered from the pandemic. But for November, with oil prices weakening, the group made its largest cut since the early days of COVID-19 in 2020.
It decided to cut the OPEC+ output target by 2 million bpd, of which about 1.27 million bpd was to come from the 10 participating OPEC countries. The target remained in place for February.

Also Read: OPEC Targets $12.1trln Investment Until 2045 – Sec General

With the rebound in Nigerian output in February, compliance with the agreement increased to 169% of pledged cuts, according to the survey, against 172 per cent in January.

But output is significantly undershooting targeted amounts because many producers – notably Nigeria and Angola – lack the capacity to pump at the agreed levels.

The 10 OPEC members required to cut production pumped about 880,000 bpd below the group’s target, the survey found. The shortfall in January was about 920,000 bpd.

Among countries with lower output, the largest drop of 80,000 bpd was in Angola due to a relatively small export programme in February and field maintenance on the Dalia stream.

Libya, Iran and Venezuela are the three producers exempt from OPEC cuts. Iran posted higher exports in February and Venezuelan output has increased slightly, according to the survey. Libyan output was also steady.

The survey aims to track supply to the market. It is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from companies that track flows, such as Petro-Logistics and Kpler, and information provided by sources.

By Ken Okoye

BP’s Boss Warns Of Price Spikes If Energy Transition Is Rushed

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BP’s chief executive officer, Mr. Bernard Looney has warned of renewed oil and gas price spikes if supply is cut too quickly without a drop in demand.

Looney, who spoke at the International Energy Week event in London yesterday, also opined that the energy transition needs to happen in an orderly fashion. “Reducing supply without also reducing demand inevitably leads to price spikes – price spikes, leads to economic volatility,” he said

The BP’s boss warning is coming weeks after the company scaled back its emissions targets and said it would produce more oil and gas for longer.

In early February, Looney stressed “an orderly” transition when he announced that the supermajor would be producing more oil and gas for longer, and now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%.

Also Read: The U.S. Intensifies New Economic Sanctions Against Russia

“People today want an energy system that works. That provides secure, affordable and low-carbon energy – what the Energy Institute calls the triple energy crisis,” Looney said at the event.

While saying that “Net zero is a massive opportunity for companies like ours,” BP’s top executive also called for an orderly transition with investments in all kinds of energy to avoid – as much as possible – the next spikes in prices.

“There’s a risk that volatility will undermine popular support for the transition, an outcome which nobody wants,” Looney said as carried by The Telegraph.

“We avoid that outcome by investing in today’s energy system, as well as investing in the transition. And, not or.”   

By Ken Okoye

Russian 500,000mpd Oil Output Cut Will Balance The Market

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The chief executive officer of Russia’s oil company Gazprom Neft, Alexander Dyukov, has said that the Russia’s decision to reduce its oil production by 500,000 barrels per day (bpd) in March will help balance the global oil market, which he says is in surplus now.
“Currently the market is in a surplus, so the Russian government’s decision to cut supply is aimed at rebalancing it,” Dyukov told reporters yesterday, as carried by Russian news agency Interfax. 

Russian deputy prime minister, Alexander Novak said in early February that Russia, a member of OPEC+, would voluntarily cut its oil production by 500,000 bpd in March as a result of the Western sanctions and the price cap on Russian crude oil.   

The International Energy Agency (IEA) said in its Oil Market Report for February that the Russian production cut could be “a sign that Moscow may be struggling to place all of its barrels,” or “may be an attempt to shore up oil prices.”

The attempt at an oil-price boost has failed so far—prices have been pressured this month by signs that the Fed could raise interest rates to a higher endpoint and hold them there for longer to fight sticky inflation.

Also Read: The U.S. Intensifies New Economic Sanctions Against Russia

Speaking to reporters yesterday, Gazprom Neft’s Dyukov also said that oil prices would be volatile this year, too, and could be in the range of $80-$110 per barrel.

On the one hand, there is a surplus on the market, but on the other hand, Russia’s crude and oil products are being redirected to new markets, which leads to higher transportation costs, reflected in the prices, Interfax quoted Dyukov as saying.

“This is a consequence, among other things, of the sanctions pressure on Russia,” Dyukov said. Market volatility will be high, but there are tools to temper the volatility, especially from the OPEC+ group, he added.

“OPEC+ is one of the key mechanisms that could reduce market volatility…Time will tell, but OPEC+ has proven to be an effective tool,” Dyukov said.

Immediately after the Russian announcement of the cut for March, OPEC+ signaled the group doesn’t plan to change the course in its oil production targets.

By Bosco Agba

Russia’s Oil Exports Still Active Despite Sanctions By The West

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Image of oil rigs against the background of the Russian flag. The concept of oil production in Russia. oil Platform

Reports say Russia’s oil exports remained active in February despite increasing Western sanctions. Bloomberg said the country ostensibly found new buyers of its products, quoting Kpler data, a leading provider of intelligence solutions covering over 25 commodity markets.
The report yesterday said Russian producers, aided by ‘shadow fleet’ of tankers, have turned to buyers in the Gulf, Latin America and Asia, ship-tracking data shows.

The EU banned seaborne fuel imports in early February, two months after imposing restrictions on crude shipments. The sanctions come on top of the price caps on Russian cargoes that third countries must observe, if they want access to western services like shipping and insurance.

Despite that combination of curbs hitting in February, Russian producers exported an average of 7.32 million barrels a day of crude oil and petroleum products, data from the research firm Kpler shows.

That’s in line with volumes shipped in December and only 9% below the historic high in January.
The analytics firm said the monthly decline in Russia’s seaborne flows is mostly the result of unusually high January exports, which partly related to weather disruptions.

Also Read: Russia: U.S. Offers Additional $2bn Security Assistance To Ukraine

Kpler crude analyst Viktor Katona, said bad weather in early winter led to “a sizable carry-on effect of cargoes that were bound to load in December yet were pushed into January,” leading to peak flows, he said.

“Storms have come back this month again after a relatively tame January, especially in the Black Sea, with the port Novorossiysk repeatedly shut throughout the month.”

Despite that resilience, Russia’s oil exports face further strains as India, a top buyer of its crude, sees mounting pressure from bankers to demonstrate that the cargoes comply with the $60-barrel price cap. Tougher monitoring may weigh on India’s purchases of Russian barrels.
Kpler said next month’s exports may also be affected by the Kremlin’s decision to cut oil production by 500,000 barrels per day in retaliation for the western bans.

The baseline for the cut is the nation’s January production, which reached around 10.86 million barrels per day. So far, it remains unclear whether Russian producers will prefer to reduce their crude exports or domestic processing as a result of the curb.
Preliminary March plans indicate the oil firms intend to keep refinery runs high to take advantage of huge tax benefits that are set to decline from April. 

Africa’s New Extraction Maths: Less Oil, More Gas

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Foreign investors are dropping crude production and betting on LNG developments.

Summary
• Oil majors have been pulling out of crude projects in Africa, engendering caution about foreign direct investment (FDI) on the continent.
• On the other hand, gas production across the continent could double by the mid-2030s, according to energy consultancy Wood Mackenzie.
• Proponents say LNG could also help solve Africa’s cost of living crisis, because its by-products can be used for large-scale fertilizer production.

Unnerved by regional insecurity, crude oil theft and sitting on fast-maturing assets, oil majors have been pulling out of crude projects in Africa, engendering caution about foreign direct investment (FDI) on the continent.

Africa’s share of global oil production has fallen steadily over the years, going from 12.3% in 2010 to 8.1% in 2021, according to data from the BP Statistical Review of World Energy.

From ExxonMobil leaving Equatorial Guinea, the Organization of the Petroleum Exporting Countries’ (OPEC’s) smallest member, to Chevron and Shell retreating from Nigeria, the exodus of foreign oil majors gathered pace in 2022. On top of this, African producers again fell short of their OPEC quotas for a second successive year, with international oil corporations turning to alternatives in the Americas.

Also Read: AfCFTA Presents Collaborative Local Content Strategy For Africa – NCDMB Boss

All is not lost, however. Experts say oil divestment could be good news for Africa’s gas-rich nations, who might be in for an investment windfall this year. If they set in motion the right mix of reforms, gas production across the continent could double by the mid-2030s, according to energy consultancy Wood Mackenzie.

Divestment wave
Last year saw crude oil projects in West Africa particularly fall one after the other. ExxonMobil announced plans to wind down oil production in Equatorial Guinea and depart altogether in 2026 after its license expires.

The US company had already cut its output in the tiny West African nation to fewer than 15,000 barrels per day (bpd) in late 2022. The country produced 93,000bpd in 2021, according to OPEC, down from 300,000bpd in 2012.

Oil giants Chevron, Shell and Exxon exited Nigeria, Africa’s biggest producer, due to rampant oil theft by the Niger Delta gangs that for years have crippled production in the region. They all sold their assets to independents with lower costs who can run more nimble operations.
In July, Shell’s Nigeria director said rising levels of theft in the Niger Delta pose an existential threat to the country’s oil industry, while a recent investigation by Nigeria’s senate found that the country had lost more than $2billion to oil theft in the first eight months of 2022.
Nigeria’s output fell below one million bpd in late 2022 — a 32-year low and well below its OPEC quota of 1.8 million bpd. Even Angola has not been spared, despite its oil sector enjoying a renaissance under President João Lourenço.

TotalEnergies quit the country last year amid plans to focus on low-emission projects elsewhere. Only Algeria and Libya, which produce oil at a lower cost, are likely to keep attracting serious investment, according to a recent study by the consultancy McKinsey, as long as they commit to carbon emissions reduction.

Gail Anderson, research director for sub-Saharan Africa at Wood Mackenzie, says the divestment decisions — some of which were likely made several years ago before the pandemic — were based on maturing assets, environmental targets and insecurity, rather than a conscious shift away from oil.

Also Read: NNPC Estimates Energy Demand In Africa To Increase By 35% In 20yrs

“The oil companies will still continue to pursue oil projects, but it’s got to be the right project,” she says. “They are being a lot more choosey.”

For now, investment is shifting to the Americas, chiefly the US, Canada, Guyana and Brazil. With investment falling short, Ms Anderson says: “The [African] OPEC producers have really struggled to meet their quotas and that’s likely to continue into 2023.” Experts say African governments are partly culpable. “African countries themselves have not done a good job at creating an enabling environment,” says NJ Ayuk, head of the African Energy Chamber, with resource nationalism and slow permit issuance proving perennial challenges.

Carole Nakhle, CEO of Crystol Energy, adds: “In many African countries, the Achilles heel has been unattractive government terms and unstable policy, including fiscal policy, and an overall weak institutional framework which increase the cost of doing business for investors.”
The African divestments came, paradoxically, against a backdrop of high oil prices and rising demand in European markets thirsty for alternatives to Russian oil and gas, not to mention sky-high demand in Africa, where 600 million people still lack access to electricity.
Harbinger of the boom

Yet analysts say crude sell-offs could herald a boom for liquefied natural gas (LNG), a less polluting hydrocarbon that is a growing component of Europe’s energy mix. So strong is the business case for African LNG that stalled or abandoned gas projects are expected to proceed in 2023, boosting FDI flows. Proponents say LNG could also help solve Africa’s cost of living crisis, because its by-products can be used for large-scale fertiliser production.

TotalEnergies and ExxonMobile are awaiting the green light on two huge LNG facilities in Mozambique, while — in a major milestone — Eni shipped its first cargo from the country’s Coral South floating LNG project in November.

Shell and Equinor plan to build a $30bn LNG export terminal in Tanzania. Investment, including from BP, is pouring into Senegal and Mauritania, where huge gas discoveries could transform the regional economy. Gas fields are also being eyed in Nigeria, Angola, Congo and the Democratic Republic of Congo.

Also Read: African Countries Should Embrace Renewable Energy – Experts

Meanwhile, gigantic reserves of oil and gas have been discovered in Namibia, where drilling will pick up this year. “Namibia could be, and I say this carefully, another Guyana,” says Ms Anderson. The South American nation recorded the past decade’s biggest oil find, with more than 11 billion of barrels discovered since 2015 (see page 32).

As a result, “upstream capital investment in sub-Saharan Africa is expected to increase to over $22bn in 2023, compared to around $18bn in 2022,” says Ms Anderson. “That’s an increase of over 20%.”

While Africa’s potential is clear, Mozambique has been a cautionary tale. For years, Islamist militants have carried out a campaign of looting and violence in the gas-rich Cabo Delgado region, impeding gas development. As a result, analysts expect FDI to focus on floating LNG projects, which are less affected by insecurity and can be brought on-stream quicker than traditional greenfield projects, pleasing energy companies that want quick payouts due to uncertainty over future demand.

Research by Wood Mackenzie suggests African LNG has the potential to grow from 40 million to 50 million tonnes per annum today to nearly 100 million tonnes by the mid-2030s, but notes the high level of risk. In Algeria and Egypt, where projects are more secure, strong domestic demand has constrained gas exports. “We don’t think that Africa can be relied upon to fill any gaps in Europe,” says Ms Anderson.
Mr Ayuk is more bullish. “Non-traditional players are going to be the sources of Africa’s oil and gas growth in the next two to three years,” he says, pointing to Senegal, Mauritania, Uganda and Namibia. “The only thing that holds Africa back from closing the gap with Russian gas is the investment.”

Also Read: Nigeria Could Become Africa’s Biggest Oil Refiner By 2025 – Report

Between 2010 and 2020, Africa accounted for 40% of natural gas discovered worldwide. But the continent has struggled to exploit more than a small fraction. As European countries cast around for alternatives to Russian energy, that could be about to change.
“China and India will [invest in African LNG] if the Europeans don’t,” says Mr. Ayuk. “The crazy thing about it is that the Asian countries will end up selling African gas to Europe.”

Charlie Mitchell [FDi Intelligence]

PENGASSAN Calls For Revocation Of DisCos’ Licences

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The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has expressed the displeasure of the association over the disappointing performance of Electricity Distribution Companies (DisCos),in the country.

He, however, recommended that a security summit that would look into lasting solution to insecurity should be among those national topical issues the next administration should prioritize.

Comrade Festus Osifo, President of PENGASSAN in chats with Daily Independent, urged the incoming Federal Government to, without delay, revoke the licenses of DisCos over poor performance.

Also Read: Mainstream Energy Solutions Wins Selected Bidder for Zungeru Hydropower Plant

Comrade Osifo, while citing the inability of the investors to bring the expected turnaround maintenance and development in the electricity sector, he called for cancelling the entire privatization exercises

“We are worried that since the investors have been performing below expectation, government should withdraw their licenses”, he said.
He cited the power targets set by the outgoing administration despite the availability of human and natural resources had been disappointing as reason for his call of withdrawal of the licenses.

The PENGASSAN President, also expressed concern on why Nigeria could not explore other alternatives to improve power supply and use such to grow the economy since economic growth is largely dependent on the availability of steady power supply, reiterated that “oil workers urged the government to complete the power and energy sector deregulation process by opening up the transmission segment of power value chains to competent private participation and investments.

Also Read: Optimization Of National Grid Critical To Energy Sustainability

“In pursuing this, the union advocated managerial experience, technical expertise and financial capabilities to be considered for willing and prospective investors.”

Independent 

Oil Demand To Soar, Up To $100, Top Energy Trader Says

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The chief executive officer of globally reputed trading company, Vitol, Russel Hardy has said global demand for crude oil could hit record highs this year – potentially driving prices back up to $100 a barrel

In an interview with Bloomberg yesterday, Russel said demand is expected to hit record levels in the second half of the year. “The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility,” Mr. Hardy said

The view factors in a jump in demand due to the reopening of China’s economy, as well as an expected drop in inventories over the coming months. Hardy said demand for most oil products is surpassing pre-pandemic levels, while gasoline is “fairly flat” and jet fuel lingers “in catch-up mode” as travel gradually picks up.

Also Read: ‘If Market Changes, OPEC+ Would Adjust Output Policy’

Brent crude, the international benchmark, has had a choppy start to the year, declining by about 5% so far in 2023 as high inflation, rising interest rates and recession fears all weighed on demand.

Yesterday, Brent crude fell 1.4% to trade around $81.75 a barrel. The last time it traded within the $90-$100 range was in November.
Incidentally, Hardy’s forecast has been echoed by other oil experts, including Saxo Bank’s head of commodity strategy, Ole Hansen. “We do not claim to be smarter than one of the world’s biggest shippers and with the OPEC and IEA pointing toward the same trajectory – anything but a deepening economic slowdown or a peace deal in Ukraine would in our view support higher prices later in the year,” Hansen told Insider.

“Not least supported by OPEC+ being in no hurry to add barrels into higher prices and Russia increasingly being challenged to maintain current production levels,” he continued, and echoed Hardy’s call that crude prices could reach $100 later this year.

Also Read: Natural Gas Futures Contracts Suggest Europe’s Energy Crisis Isn’t Over

OPEC+, or the Organization of the Petroleum Exporting Countries and its allies — including Russia, began cutting oil output last year in a bid to shore up declining prices.

Last December, the group said it would stick to its production cut target set last October, which is to slash output by 2 million barrels a day till the end of 2023.

Ghana: Russia’s Lukoil To Sell 38% Stake In Deepwater Oil And Gas Field

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FILE PHOTO: The logo of Lukoil is on display at a petrol station in Saint Petersburg, Russia May 25, 2022. REUTERS/Anton Vaganov

Russian oil firm, Lukoil is hoping to seal a deal requiring the sale of 38% of its deepwater oil and gas field offshore Ghana
Reuters said in a report that the potential sale could unblock the suspension of the field development plan, which the operator of the Pecan field, Norway’s Aker Energy, hasn’t submitted yet. 

Lukoil owns 38%, Fueltrade has 2%, and Ghana National Petroleum Corporation holds the remaining 10%. Seven successful exploration wells and eight appraisal wells on the block have proved a significant resource base as well as offering a high upside, Aker Energy says.
Aker Energy holds a 50% participating interest in the Deepwater Tano Cape Three Points block in Ghana, including the Pecan development project.

Also Read: Price Cap Against Russia Oil Is Working – U.S.

However, the company has been wary of the involvement of Lukoil as a partner in the block due to the Western sanctions on Russia and has said it would wait to see the issue resolved until it files a field development plan.
Aker Energy has completed FEED and prepared a revised Plan of Development for the Deepwater Tano/Cape Three Points block, Aker said in August 2022.

Earlier this month the Q4 earnings release, Aker said that the filing of the development plant “has been delayed due to the uncertainties and risks caused by the war in Ukraine and Lukoil Overseas Ghana Tano Ltd.’s 38% interest in the license, as well as supply chain disruptions and inflation.”

Also Read: Russia: U.S. Offers Additional $2bn Security Assistance To Ukraine

The current deadline for submitting the plan has been extended to April 2023. Lukoil is directly talking with Indian companies about potentially selling its stake in the Pecan field development because banks do not want to get involved due to the sanctions against Russia, according to the agency’s sources.

During an Indian energy event earlier this month, Lukoil representatives and Indian firms, including ONGC Videsh, the foreign investment arm of Oil and Natural Gas Corporation (ONGC), discussed a potential deal, the sources said.

Oil Prices Dip As Market Await Chinese Demand To Rebound

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Reports yesterday said oil prices began the week’s trade with a slight loss before bullish and bearish factors struck what seemed like a balance.

Brent crude was trading at $82.66 per barrel at the time of writing, and West Texas Intermediate was at $75.94 per barrel, both down by less than a percentage point from Friday’s close.

Last week, Russia was reported to have plans to reduce crude oil exports from its western ports by as much as 25% next month. This prompted expectations of tighter global supply, especially since the report came soon after an official statement that the country’s oil production would be reduced by half a million barrels per day in March.

Also Read: China Signs Its First-Ever LNG Deal With Oman

However, the U.S. Energy Information Administration continued to report sizeable weekly builds in crude oil inventories, which have now returned to levels above the five-year average after slipping below it last year.

As well as inventory builds, the Federal Reserve looks to be committed to more interest rate hikes as it seeks to put a lid on inflation. Rate hikes tend to push the dollar higher, depressing oil prices as the expensive dollar affects demand adversely.

“Oil looks like it wants to stay in a trading range until we have a clearer outlook with China’s COVID reopening and on how bad of a recession the Fed will induce for the U.S. economy,” OANDA senior analyst Edward Moya told Reuters earlier yesterday

Also Read: Russia: U.S. Offers Additional $2bn Security Assistance To Ukraine

Signs of recovery are coming from China, with consumption on the rise after the relaxation of zero-Covid rules. However, industrial activity is not rebounding in step with consumption, Bloomberg reported earlier today.

Analysts and traders will now be watching the next China PMI release, due out on Wednesday. If it confirms a rebound, oil prices will almost certainly move higher, in line with most forecasts.

By Bosco Agba with agency report

S/Arabia Advances $400m Aid Package to Ukraine

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OPEC+ leader, Saudi Arabia, has advanced $400 million in aid to Ukraine. The aid comes one year after the latter was bulldozed by the Russian war machine.

The aid package includes financing of $300 million worth of oil derivatives as a grant from Saudi Arabia through the Saudi Fund for Development (SFD) in favor of Ukraine, the Saudi Press Agency said. The remaining $100 million will be humanitarian assistance to Ukraine from Saudi Arabia.

An agreement and memorandum of understanding for the sum was signed yesterday during a surprise visit of Saudi Arabia’s foreign minister to Kyiv to Ukraine.

Saudi Arabia, which leads the OPEC+ oil production alliance with Russia, sent its foreign minister, Prince Faisal bin Farhan bin Abdullah to Kyiv this weekend for talks with top Ukrainian officials including President Volodymyr Zelenskyy.

Also Read: Russia: U.S. Offers Additional $2bn Security Assistance To Ukraine

The visit was the first from such a high-ranking Saudi official to Ukraine in 30 years.  “As part of the visit, two documents were signed in the president’s office formalizing the providing of a $400 million aid package to Ukraine.

“Grateful to Prince @FaisalbinFarhan for constructive dialogue and mutual understanding,” said Andriy Yermak, head of the office of the president of Ukraine.

“The minister of foreign affairs renewed the Kingdom’s keenness and support for all international efforts to resolve the Ukrainian-Russian crisis politically,” the Saudi agency reported.

The two countries agreed to deepen cooperation in the investment and energy sectors, Yermak said at a news conference – as carried by Ukrainian news outlet Ukrinform.

Saudi Arabia has refrained from publicly criticizing Russia for the invasion of Ukraine since the start of the war a year ago. The Kingdom, as the de facto leader and the largest oil producer of OPEC, is leading the OPEC+ group whose key non-OPEC member is Russia.

Also Read: Ukraine: US Will Today Announce ‘Sweeping’ Sanctions Against Russia

However, Saudi Arabia was one of 141 countries that voted last week in favor of a non-binding United Nations General Assembly resolution calling on Russia to end hostilities and withdraw its forces from Ukraine.

By Ken Okoye