Illegal Niger Delta refineries to produce 1,000 barrels of oil daily — NNPC

Posted on April 1, 2017 by Staff Reporter

The group managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has thrown some light on the modular refineries the Federal Government is planning for the Niger Delta.

Mr. Maikanti, at the 53rd International Conference and Exhibition of the Nigerian Mining and Geosciences Society (NMGS) in Abuja, said the government would organise the youth now engaged in illegal refining of crude into consortia.

Each consortium will refine 1000 barrels of crude daily.

Mr. Baru also defended the Federal Government’s plan to transform illegal refineries in the Niger Delta into legal entities for proper integration of the youth in the region.

He argued that getting the youth to form consortia to set up 1000 barrels per day modular refineries would get them off criminality and create jobs.

He said the reform programme being executed by the NNPC is geared towards transforming it from an oil and gas company into an integrated energy outfit with interest in power generation and transmission.

In a paper entitled, “Challenges and Prospects for the Diversification of the Upstream, Downstream and Frontier Basin Exploration in the Oil and Gas Sector”, Mr. Baru said NNPC had identified opportunities in the power sector and was ready to take advantage of them to transform from being a gas supplier to the power sector, into a major player, in the sector.

He said the Corporation was already working on a project to generate four Megawatts (4000MW) of electricity while also exploring the possibility of investing in the transmission segment of the power sector.

The GMD explained that the Corporation’s decision to diversify into the power sector was hinged on the need to bridge the huge energy gap in the Nigerian market.

He said contrary to the impression that the poor power situation was caused by inadequate gas supply, the real problem was inadequate transmission capacity, adding that there was enough gas to generate eight gigawatts (8GW) of electricity but the transmission grid could not support such volume of power without complications.

In the upstream, he said his goal was to accelerate frontier exploration and grow crude oil reserve to 40 billion barrels from the current 37 billion.

He also challenged the geoscientists on the need to deploy more sophisticated technology and drill deeper than the current 13,000 to 15,000 feet in the Niger Delta to produce more oil.

“We have to look deeper with intensive 3D and 4D seismic surveys over the so-called matured Niger Delta. The older, the better,” he declared.

Source: Premium Times

Oil firm returns N62 billion to NNPC after controversial crude swap deal under Jonathan

Posted on March 28, 2017 by Staff Reporter

The Nigerian National Petroleum Corporation, NNPC, said on Monday it had reached a final settlement with AITEO Group over an outstanding $202.4 million (about N62 billion) debt in respect of under-delivery of petroleum products under the crude swap contract between 2012 and 2014.

Under the crude swap deal by the NNPC during the Goodluck Jonathan administration, the NNPC allocated crude oil to trading companies in exchange for processed petroleum products. That deal was criticised by several analysts who argued that the oil firms were, in collusion with top public officials, cheating the Nigerian government. The government had said it embarked on the deal because, among others, the local refineries were not working optimally and so as to reduce cash payment for imported petrol.

On Monday, the NNPC spokesperson, Ndu Ughamadu said following extensive reconciliation of records between their business transactions and subsequent agreement, AITEO Group paid in full all its outstanding indebtedness to all NNPC downstream entities totalling about $202.35 million.

Mr. Ughamadu said the amount included AITEO’s share of the total $184 million indebtedness by three companies on crude swap obligations, which included Televeras Group of Companies and Ontario Oil Gas Ltd.

Although Televeras Group, at the end of negotiations with the NNPC, agreed pay an initial $17.2 million and $10 million subsequently, there was no earlier information on the offer by AITEO, which also agreed to settle its debt.

The NNPC spokesperson said on Monday that AITEO’s agreement to settle the $202.4 million debt following its engagement with the NNPC on the issue was a demonstration of its cooperation and commitment towards a successful recovery process.

AITEO Energy owned by Benedict Peter and Francis Peter was one of the seven major Nigerian fuel importers identified by the Swiss non-governmental advocacy organization, the Berne Declaration, as the worst culprits in schemes employed by Nigerian and foreign fuel importers to swindle the country.

The report, published in November 2013 titled Swiss Traders’ Opaque Deals in Nigeria, described the schemes employed by Nigerian and foreign fuel importers, such as creating offshore subsidiaries referred to as “letterbox companies”, ship-to-ship transfer to create untraceable paperwork, payment of subsidy money to phantom and non-existing importers, and partnering with politically exposed fraudsters to defraud the country over $6.8 billion from 2009 and 2011.

The Lagos-based AITEO Energy, which is a subsidiary of Geneva-based Aiteo Suisse AG, was asked by the then Technical Committee on Payment of Fuel Subsidy to reimburse the Nigerian government over N578 million in subsidy fund it falsely collected.

The company was one of the three oil marketing firms whose offshore processing agreements were terminated on August 26, 2015 after the contract was found to have been ridden with corruption.

Mr. Ughamadu said as part of the debt recovery process, negotiations were still ongoing with the management of Ontario Oil & Gas Limited to make a formal commitment to settle all its outstanding debts under a crude oil swap contract that existed between 2012 and 2014.

Although Mr. Ughamadu told PREMIUM TIMES, Saturday, that the company, which was convicted recently for subsidy fraud, had offered its tank farm at Oghara in Delta state in lieu of the debt, he said the amount arrived at after the valuation of the facility was said to be far below an acceptable figure.

The NNPC spokesperson said the Group Managing Director of the Corporation, Maikanti Baru, has vowed to ensure that the ongoing recovery process was completed and all debts settled.

“The Management of the Corporation under the leadership of Dr. Maikanti Baru is committed to ensuring transparency and adequate public information on the ongoing recovery effort. The Corporation shall continue to provide further update on the recovery process,” he said.

Source: Premium Times

Presidency moves to transform illegal Niger Delta oil refineries into joint ventures.

Posted on March 27, 2017 by Staff Reporter

The presidency is making a move to make some of the illegal refiners and the local communities in the Niger Delta become shareholders in the proposed modular refineries concept of the Federal Government.

A modular refinery is one made up of smaller and mobile parts-(skid-mounted)- that are more easily fabricated and can be more quickly transported to site. They come in different sizes with varying capacities normally lower than conventional refineries with more elaborate and complicated set-up.

A presidency source yesterday said the consideration was in line with the promises made by the government during the presidential interactive engagements in several oil-producing states led by Vice President Yemi Osinbajo, to integrate the illegal refiners, rather than eliminate their operations.

However, specific consideration of how to integrate local “illegal” refiners in the oil-producing communities into the proposed modular refinery concept is now in progress with the Presidency and the Nigeria Sovereign Investment Agency (NSIA), spearheading the efforts.

At a meeting late last week at the Presidential Villa, issues around technical and engineering implications of how to integrate the refiners were discussed with industry experts and practitioners making presentations on how to implement the modular refinery initiative said to have been first proposed by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.

At the meeting, the experts reported that they had worked closely with the Nigeria National Petroleum Corporation (NNPC), oil and gas operators, owners of marginal fields, operators of refineries and various technical services providers “to develop a workable system to drive the initiative, the presidency source disclosed.

Under the plan being considered, the government could supply crude to the local refineries at a reasonably considered price, as an incentive to stop the current practice whereby the illegal refiners vandalise and steal the crude. This concept will also prevent environmental degradation that the spills and damaging the trunk lines have been causing.

Also, marginal field operators can supply crude to the new modular refineries that will have the illegal refiners integrated. Another important component of the plan under consideration is to involve the current illegal refiners and their communities as shareholders while the Niger Delta Development Corporation (NDDC) and the NSIA will also hold substantial holdings/equity sufficient to make the smaller refineries operational as a business and a going concern.

To facilitate effective community engagements, Memorandum of Understanding (MoU) will be established under the plan with the affected communities determining their share, while the government will supervise the implementation, which would be driven largely by industry operators and the communities.

Mr. Laolu Akande, Senior Special Assistant to the Vice President, Media & Publicity confirmed that a meeting was held last week on the issue, adding that the presidency was actively working to deliver on its promise of a new vision in the Niger Delta.

Source: The Guardian

Oil-rich Nigeria expended 2.4 trillion Naira importing fuels, lubricants in 2016 – NBS

Posted on March 9, 2017 by Staff Reporter

The Federal Government spent N2.4 trillion on the importation of fuels and lubricants in 2016, according to the National Bureau of Statistics (NBS).

The agency in its fourth quarter (Q4) foreign and merchandise trade statistics released at the weekend, disclosed that about 18.4 per cent of the total cost was used for the importation of Premium Motor Spirit (PMS) during the year under review.

On a quarterly basis Nigeria spent N699.2 billion for the importation of fuels and lubricants, which if retained in the country, could build institutions that would provide jobs for graduates.

The bureau said the structure of Nigeria’s export trade is still dominated by crude oil exports, which contributed N2.4 trillion or 81.4 per cent to the value of total domestic export trade in Q4 2016.

The percentage of crude exports to total exports in Q4 thereby decreased to 81.4.0 per cent from 84.3 per cent in Q3, but increased when compared to Q4 2015, accounting for 79.3 per cent of the exports.

It disclosed that Nigeria’s import trade by origin in Q4 showed the country imported goods mostly from China, Belgium, Netherlands, the United States and India. They respectively accounted for N404.1 billion or 17.5 per cent, N356.4 billion or 15.4 per cent, N230.0 billion or 10.0 per cent, N205.6 billion or 8.9 per cent, and N113.9 billion 4.9 per cent of the total value of goods imported during the quarter.

Further analysis of Nigeria’s imports by continent during the period, revealed that it consumed goods largely from Europe with import value of N1, 127.9 billion or 48.9 per cent, adding that it also imported goods valued at N761.9 billion or 33 per cent from Asia and N312.8 billion or 13.6 per cent from the Americas.

The bureau stated: “Import trade from Africa stood at N82.7 billion or 3.6 per cent while imports from the region of ECOWAS amounted to N15.1 billion.

“For full year 2016, Nigeria imported mostly from China with 19.7 per cent of total imports followed by the Netherlands, 11.7 per cent then the USA, eight years.

“With respect to import by continent, Nigeria imported the most from Europe, 46.7 per cent then Asia, 35.8 per cent and the Americas, 12.2 per cent. Nigerian imports from Africa stood at 4.1 per cent of total imports in 2016, with imports from within ECOWAS at 1.2 per cent.”

The total value of Nigeria’s merchandise trade at the end of Q4 was N5, 286.6 billion, or 10.6 per cent above the N4.781 billion recorded in Q3.
“Total export value for fourth quarter of 2016 stood at N2.978 billion, which was 28.3 per cent more than the value of the previous quarter. Total import for fourth quarter of 2016 was N2.308 billion, which represented a decrease of 6.1 per cent with the value of the preceding quarter.

“This development stemmed from a rise of N656.3 billion or 28.3 per cent, in the value of exports combined with a decline of N150.9 billion or 6.1 per cent, in the value of imports against the levels recorded in the preceding quarter,” it added.

Meanwhile, the Executive Secretary, Lubricant Producers Association of Nigeria (LUPAN), Emeka Obidike, said indigenous blenders are constantly being threatened with the shutting down of their plants and seizure of their consignments.

He said they are also persistently faced with the risk of losing their businesses, corrosion of their goodwill and professional integrity, asphyxiating demurrages and transactions and default in the repayment of facilities.

Obidike alleged that the National Agency for Food, Drugs Administration and Control (NAFDAC) had in many occasions confiscated their consignments and also gone ahead to detain the consignments of importers, insisting on being presented with NAFDAC licences and proof of payment of dues.

He explained that LUPAN members are duly licensed by the DPR to import, store and blend base oil in Nigeria.

Source: The Guardian

Oil deal exceeding expectations…countries cutting more than agreed – OPEC

Posted on March 7, 2017 by Staff Reporter

The Organisation of Petroleum Exporting Countries (OPEC) says the historic oil deal sealed in December is yielding more results that expected.

The Vienna-based oil cartel, said some countries party to the deal are cutting production levels below the points agreed at the December accord.

In its first bulletin for 2017, OPEC said 24 countries have joined in turning a new page in the oil history of the world.

Quoting Alexander Novak, minister of energy of the Russian Federation, OPEC said “the results we are observing … are exceeding our expectations. In fact, many countries are going beyond what has been agreed in December in working strongly to the letter in the spirit of the ‘Declaration’.”

Via a commentary on the bulletin, OPEC said the projection of Mohammed Barkindo, its secretary-general — that the world was about to turn a historic page in oil history — is now becoming a reality.

“Just a few days after the landmark ‘Declaration of Cooperation’ was signed in December, a delighted OPEC Secretary General, Mohammad Sanusi Barkindo, said at the Petrotech 2016 Conference in New Delhi, India that the world was on the verge of turning a historic page in global oil.

“Of course, that was before the OPEC/non-OPEC agreement came into force on January 1. Following the positive outcome and confidence expressed at the inaugural meeting of the monitoring committee, the Organization’s chief executive might want to rephrase that statement to ‘has turned’ a historic page.”

Osinbajo defies insecurity, promises to visit all oil producing communities.

Posted on March 6, 2017 by Staff Reporter

Acting President Yemi Osinbajo has promised to visit all oil producing communities in the Niger Delta, ruling out any concern about insecurity.

Osinbajo said this at a townhall meeting in Benin, Edo state capital, on Monday.

Some youth stormed the meeting after receiving reports that the acting president will not visit their communities.

This led to a temporary suspension of activities, but their leaders succeeded in pacifying them.

Addressing the aggrieved persons after normalcy was restored, Osinbajo explained that the closure of the Abuja airport, scheduled for 12 midnight on Wednesday, was behind the rescheduling of the visit.

“Our plan is to ensure that we visit all of the oil producing communities, and just as it was rightly said, we have stationed our helicopters at the airport in order to take us there,” he said.

“There is no issue of insecurity at all, I have been to other oil producing communities. What has happened is that the Abuja airport will be closed from tomorrow, we would not have enough time this time to visit all the communities.

“But the governor and I have agreed that we must pay a visit in order to visit each and every one of the communities, and we will do so.”

Osinabjo told the people that abandoned projects in the region will be reactivated, while defaulters will be prosecuted.

“I have looked at the issues of abandoned projects, and I can tell you precisely, how much has been voted, and how much was spent in several of our oil communities, and there is no sign of development in those areas,” he said.

“I can tell you how many of these projects are supposed to have been completed, and when you look in the books, they say they have been completed, but they have not been completed; they have not been done, many have not even started at all.

“The people must see the benefit of the land. The elite everywhere, have very frequently deprived the people of the opportunity to enjoy the fruit of the land, that is the Nigerian story.

“This is something we must deal with. We cannot continue as if we do not know. The monies that have been spent on paper in this country is enough to develop many countries.”

Source: The Cable

The Observer: How Private jet, armoured cars were bought with Malabu deal ‘bribes’

Posted on March 6, 2017 by Staff Reporter

Tens of millions of dollars was wired to buy a private jet and armoured cars in the US from the controversial $1.3 billion sale of OPL 245, the Sunday Observer of London has reported, quoting court documents.

In the deal struck in 2011, only $210 million of the sum went into government coffers as “signature bonus” — the rest was paid to Malabu Oil and Gas, mainly owned by Dan Etete, who, as petroleum minister in 1998, had awarded the lucrative licence to himself.

OPL 245 is a huge oil block offshore estimated to contain 9.3bn barrels of crude — enough to power the whole of Africa for seven years.

The sale to Malabu was nullified by President Olusegun Obasanjo in 1999 and it was assigned to Shell without a public bid.

Ownership was suspiciously reverted to Malabu thereafter, leading to legal action by Shell who later resorted to negotiating directly with Etete after President Goodluck Jonathan assumed office in 2010.

A year later, the $1.3bn deal was struck, with Malabu getting $1.1 billion from Shell and Eni to its transfer ownership, while the signature bonus was paid to Nigeria.

Signature bonus is a one-time fee for the assignment and securing of a licence.

Money trail

A joint investigation by the Observer and journalists from Finance Uncovered, a non-profit organisation based in London, has called to question Britain’s commitment to tackling high-end money laundering through the City of London as evident in the Malabu deal.

A $800m bank transfer to Etete, convicted of money laundering in France in 2007, successful went through the system in what the British newspaper calls “proceeds from one of the most corrupt deals in the history of the oil industry”.

Prosecutors in Milan believe two payments of $400m each were wired through JP Morgan in London as the spoils of the deal.

The newspaper reported that “more than half the money was converted into bags of bribe cash via bureaux de change in Nigeria, while tens of millions was wired to buy a private jet and armoured cars in the US, according to documents compiled by the prosecutors”.

The astonishing allegations were made by an Italian prosecutor, Fabio de Pasquale, whose previous scalps include former Italian leader Silvio Berlusconi.

In Nigeria, the Economic and Financial Crimes Commission (EFCC) has filed charges against Shell and Eni, and attorney-general at the time of the deal, Mohammed Adoke.

Malabu: Eni denies involvement in ‘corrupt conduct’, clears CEO.

Posted on March 2, 2017 by Staff Reporter

ENI, also known as the Nigeria Agip Exploration Limited, has said the transactions leading up to the auctioning of $1,616,690,656.78 Malabu oil block were not fraudulent.

The board of directors of the oil firm made this known in a statement on Wednesday.

ENI said that an independent US law firm had conducted forensic investigations into the block and returned a “not guilty verdict”.

It said that neither the company nor its CEO Claudio Descalzi were involved in alleged illicit conduct.

“Eni’s Board of Directors today takes note of the outcome of further forensic investigations into the 2011 transaction between Eni and Shell and the Nigerian Government for the acquisition of the OPL 245 licence in Nigeria,” the statement read.

“The investigations were conducted by an independent US law firm. They were commissioned by Eni’s Board of Statutory Auditors and Watch Structure.

“The investigations examined the new materials and further information filed by the Milan prosecutors as part of the closure of the investigation in December 2016.

“The law firm confirms the conclusions reached by previous investigations in 2015, stating that there is no evidence of corrupt conduct in relation to the transaction. Eni’s Board of Directors confirmed its total confidence that neither the company nor its CEO Claudio Descalzi were involved in alleged illicit conduct under investigation.”

The Economic and Financial Crimes Commission, in response to a court order, had seized the oil block pending the conclusion of investigation of the deal.

The oil firms are Shell Nigeria Ultra Deep Limited, Shell Nigeria Exploration and Production Company Limited (SNEPCO), Nigeria Agip Exploration Limited, and Malabu Oil and Gas Limited.

Source: The Cable

NNPC subsidiary to raise its oil production to 500,000 barrels daily.

Posted on March 1, 2017 by Staff Reporter

The Nigerian National Petroleum Corporation, NNPC, says it is determined to raise the crude oil production capacity of its exploration and production subsidiary, the Nigerian Petroleum Development Company, NPDC, to 500,000 barrels per day by 2020.

Besides, the corporation said it would also grow the company’s gas production capacity to 1,500 million standard cubic feet per day of gas within the same period.

The Group Managing Director of NNPC, Maikanti Baru, who disclosed this on Tuesday at the ongoing Nigeria Oil and Gas Conference and Exhibition in Abuja said everything was being done to achieve the set targets.

Mr. Maikanti, who delivered the keynote address titled: “NNPC’s Commercial Strategy and Priorities”, said the corporation hoped to achieve set reserve growth target as well as increase national crude oil production to three million barrels per day from the current 2.2 million barrels per day.

He also said NNPC would sustain frontier exploration in the country’s inland basins to meet government’s aspiration to achieve crude oil and gas reserves of 40 billion barrels and 200 trillion cubic feet respectively by 2020.

The NNPC GMD put the country’s current oil and gas reserves at 37 billion barrels and 192 trillion cubic feet (TCF) respectively.

Besides, efforts are currently ongoing amongst all concerned to reduce the level of gas flare by converting most of the flared volumes to ensure commerciality of the gas resources, he said.

Speaking further on gas commercialisation, Mr. Baru said efforts were on to raise between $3.6 and $4.5 billion to build the Abuja-Kaduna-Kano pipeline to help generate 3.2 gigawatts (GW) of electricity for the country.

“Beyond growing gas for the power sector, there has been a strategic positioning of the sector to support massive gas-based industrialization.

“We will incubate and midwife a portfolio of critical and mutually dependent investments (Central Processing Facilities, CPFs, Fertilizer, Petrochemical, Free Trade Zone, FTZ, infrastructure and Ports) which will jumpstart the gas revolution agenda.

“NNPC intends to develop or take equity in some of these gas-based industries such as fertilizer and others,” he said.

Another priority for the year, according to the GMD, was the rehabilitation of the refineries, adding that his management has secured the approval of the Board to pursue the rehabilitation with a view to increasing their capacity utilization to above 60 per cent.

He expressed confidence that diligent execution of the initiatives would increase the commerciality and profitability of the corporation in the near future.

At the opening of the 2017 Oil and Gas Conference and Exhibition in Abuja, on Monday, Mr. Baru said Nigerian oil and gas industry was on the path of recovery with the current crude oil price in the international market on the rise, and pipeline vandalism on the decline as a result of drop in restiveness in the Niger Delta.

Mr. Baru, who expressed delight that the NOG Conference, which could not hold last year, had returned, at a time hope was rising for the industry

He stated that there were indicators that things were beginning to shakeup for the industry.

The first indicator, according to him, was that cases of pipeline vandalism have reduced with a positive impact on crude oil production.

“We are having a lot of engagements with people in our core area of operations in the Niger Delta and this is bringing a lot of hope. If we go by the number of pipelines vandalism cases, they have dropped to an average of 20 per cent on a month as against a similar period last year. This is an indicator that calm is returning to the r”, he said.

He listed other indicators to include the rise in the price of crude oil in the international market and the renewed confidence in the industry among the international oil companies as a result of the cash call exit agreements which have guaranteed a steady flow of funds.

Source: Premium Times

OPEC Loses $1 Trillion To Oil Decline In Two Years

Posted on February 28, 2017 by Staff Reporter

The Secretary General of the Organization Of Petroleum Exporting Countries (OPEC), Mr Mohammed Barkindo, says member countries have lost one trillion dollars worth of oil revenue to the fall in global oil prices between 2014 and 2016.

The OPEC scribe, added that these losses were in terms of deferred and outright cancellations of projects across its entire value chain.

Barkindo, who revealed this during a visit to the Minister of State for Petroleum, Doctor Ibe Kachikwu, commended his measures to solve Nigeria’s longstanding challenges with joint venture cash-call obligations.

Source: Channels TV

Malabu Oil: Court Adjourns Ruling On Order Of Forfeiture Till March 13

Posted on February 27, 2017 by Staff Reporter

The Federal High Court in Abuja has reserved ruling until March 13, to decide on two separate applications filed by Shell Oil Exploration Limited and Agip Oil Exploration, seeking to set aside an order of forfeiture granted the EFCC in respect of oil prospecting license (245).

Justice John Tsoho was urged by the two oil companies to set aside the order he granted the EFCC on January 26, 2017 on the grounds that the EFCC chairman who is the applicant in the experte motion, was not the proper person to file it.

Counsel to the Shell Petroleum, Professor Kayinshola Ajayi, told the court that the EFCC chairman was wrong in bringing the experte motion that led to the order of forfeiture in his capacity as the chairman.

The counsel submitted that three conditions which ought to have been met by the EFCC before bringing the experte motion, were not met and as such the order of forfeiture granted was null and void.

Specifically, he said the EFCC ought to have in accordance with laid down laws, arrest, trace and then apply for order of attachment before seeking for an order of forfeiture.

He said that the EFCC had abused the court by not following the conditions precedent and that the case of the EFCC is patently hopeless.

He added that section 28 of the EFCC act does not permit the EFCC chairman to bring the experte application in his capacity as chairman .

According to Ajayi, the application, having been brought by an incompetent person, cannot invoke the jurisdiction of the court.

He added that section 115 of the evidence act was violently violated, because the EFCC in its supporting affidavit, claimed that it had completed investigation whereas, the order of attachment can only be applied for pending investigation.

On the claim by the EFCC that the order of attachment was a fall out of the 9 count charge filed against the two oil companies and others, Professor Ajayi said there was nothing to show that the charges have anything to do with the oil prospecting license (245) and as such, the claim did not hold water.

However, opposing the application, the EFCC counsel, Mr Johnson Ojogbane, asked the court to dismiss the two applications, on the ground that there was no proper suit before the court.

He added that the exparte application was brought by the EFCC chairman in line with section 44 of the 1999 constitution and as such, he is a competent person to bring the said application on behalf of the commission.

Mr Ojogbane said that it would be a disservice to the Federal Government and to Nigerians to vacate the temporary order in respect of Licence (245) because of the element of criminality involved.

Source: Channels TV

People in oil-producing areas are prone to cancer – Research Professor

Posted on February 24, 2017 by Staff Reporter

Again, more studies are linking crude oil products to cancer. A study suggests that with the rising cases of oil spills, pipeline destruction and gas production in the Niger Delta and over dependence on petroleum products, Nigerians are in for a massive health catastrophe.

A new study published in a journal, PLOS ONE, found that young people diagnosed with acute lymphocytic leukaemia are more likely to live in areas of high-density oil and gas development compared to others diagnosed with other types of cancer. The researchers at the Colorado School of Public Health at CU Anschutz, United States, however, observed no association between non-Hodgkin’s lymphoma and high-density oil and gas development.

The study is titled “Childhood hematologic cancer and residential proximity to oil and gas development.”

“The findings from our registry-based case control study indicate that young Coloradans diagnosed with one type of childhood leukemia are more likely to live in the densest areas of oil and gas sites.

Besides, studies published in American Journal of Environmental Sciences found that more Nigerians are at a greater risk of developing different types of cancer due to exposure to crude oil pollutants.

The studies, which predict ‘epidemic’ of cancers in oil producing areas of Nigeria by 2025, stated that more than 25 per cent of Nigerians are at an increased risk of developing cancer due to exposure to toxic chemicals from crude oil pollution, Polynuclear Aromatic Hydrocarbons (PAHs). They also suggest that PAHs can be genotoxic; that is, the damage caused can be inherited.

Another study had established that crude oil, even in low quantity, could harm not just human health but that of fish. The study concluded that people of the Niger Delta are at a higher risk of cancer because high concentrations of this toxic chemical were found in the fishes they eat.

FG still owing oil marketers N300bn subsidy arrears – Forte Oil Boss

Posted on February 24, 2017 by Staff Reporter

The federal government is yet to pay over N300 billion subsidy claims of major oil marketers for fuel imports between 2014-2015, says Akin Akinfemiwa, group chief executive officer of Forte Oil Nigeria.

Akinfemiwa made the disclosure on Thursday when he appeared before the house of representatives ad hoc committee investigating debts owed to the Petroleum Pipeline Marketing Company (PPMC) by oil marketers.

According to the oil chief, his company owes N5.9 billion to the PPMC but was also being owed N13.8 billion in subsidy claims.

He informed the Abdullahi Mahmud Gaya-led committee that steps were being taken to settle the subsidy arrears by the federal government.

“So far, the government, led by the Chief of Staff to the President invited us to a meeting with other stakeholders to address two issues. One was to continue petrol supply, and two was for Federal Government to pay its debts. For the debts, a committee was set up to settle them.

“The total stands at over N300 billion. Right now, we cannot even do much, but we do not want a situation where there will be queues in the country,” Akinfemiwa said.

Source: The Cable

Protests in Sango as customs, soldiers break into rice market, seize food stuff.

Posted on February 23, 2017 by Staff Reporter

For several hours, human and vehicular traffic along Lagos-Abeokuta Expressway was yesterday paralysed as rioting youths and rice sellers in Sango-Ota market protested against alleged invasion of the market by customs officials.

The protest, which led to the blockade of the main road before the bridge at Sango-Ota in Ado-Odo/Ota Local Council of Ogun State, was blamed on the customs officials who invaded the market in the early hours of Wednesday, broke into stalls and forcefully carted away bags of rice into their vehicles.

Angry traders and hoodlums barricaded the ever-busy expressway for more than nine hours. The rampage left many motorists and commuters stranded, while some made efforts to ply alternative routes.

The action got the traders angry and they immediately mobilised en masse to barricade the busy Lagos-Abeokuta Expressway, leaving motorists trapped in the ensuing confrontation between policemen and the traders. According to the customs, estimated value of duties payable on the items was N12,445,250.

Eyewitnesses reports claimed about four people were severely injured in the fracas, which saw hundreds of businesses grind to a halt in the area, but the customs insist there was no attack or any casualty recorded during the operation.

The aggrieved traders, who displayed placards containing several abusive inscriptions against the agency, alleged that the officers arrived the market in the early hours of yesterday and forcefully broke into shops and warehouses, carting away about 15 truckloads of rice, including money and personal belongings.

According to an eyewitness, the customs officers came in five Toyota Hilux fully armed and masked soldiers to carry out the operation.

A policeman was injured in the melee that followed the seizure. The unidentified policeman had attempted to remove the barricade in the middle of the road, when the irate youths stoned him repeatedly, resulting in a severe injury.

The injured policeman corked his gun and attempted to shoot at the crowd but he was prevailed upon by a senior police officer. It was gathered that the customs officers, who were accompanied by masked soldiers, shot repeatedly as they broke into over one hundred shops.

Some of the traders accused the customs officers of not only breaking into their shops to cart away bags of rice, but also made away with millions of naira, which were reportedly kept in some of the shops’ safe.

“This is very unfair. The customs came into the market at midnight and broke into our shops. We are not happy, and that is why you see people protesting. We will make sure that we resolve this issue with customs, because the harassment is getting too much,” she said.

Not even the intervention of the Area Commander of Police, Sango Command, Fayoade Adegoke, with heavy presence of policemen, and the pleas of the chairman, Ado Odo/Ota Local Council, Prince Oladele Adeniji, could calm the aggrieved traders, who parked trucks to block the expressway. Commuters were left stranded and forced to trek from Sango to the Tollgate end of the highway before they could get buses to their workplaces.

Spokesperson of the FOU of customs, Jerry Attah, told The Guardian that the officers did not break into the shops, but only packed nearly half of the bags of rice stacked outside in their thousands.

“After physical examination, we counted 1,870 50kg bags of different brands of foreign parboiled rice, and 43 kegs of 25 litres foreign vegetable oil. As at when they left there, there was no crossfire or any casualty. It was a peaceful operation,” he said.

On the stolen monies, Attah said “miscreants always take advantage of such scenario. It is possible that some people might have used the opportunity to break into the shops and steal their money. For us, no shop was broken or invaded.”

Source: The Guardian

Oil prices rise after ‘over 90% compliance’ to OPEC deal

Posted on February 22, 2017 by Staff Reporter

Oil prices rose by more than one dollar a barrel on Tuesday, after the Organisation of Petroleum Exporting Countries (OPEC) announced that over 90% of OPEC countries were conforming to the oil deal.

Members and non members of the organisation agreed to cut production in December 2016.

Brent crude futures, the international benchmark for oil prices, traded at $57.20 per barrel, recording an increase of $1.13 from its last closing price.

In 2016, oil prices traded as low as $27 per barrel and began to rise towards the end of 2016.

While speaking at the 201 International Petroleum (IP) week, Mohammed Barkindo, secretary-general of OPEC, said that over 90% of member states were conforming to the oil deal.

“In OPEC’s most recent monthly oil market report the production data for January shows conformity from participating OPEC nations above 90%,” Barkindo said.

“Moreover, all countries involved remain resolute in the determination to achieve a higher level of conformity. We are also determined to realise the joint conference decision to strengthen and sustain this cooperation between OPEC and non-OPEC.

“We want this to be a lasting and flexible partnership that when necessary can help reduce volatility, provide more confidence to the market, and steer a path towards more sustainable stability.

“All countries involved remain resolute in the determination to achieve a higher level of conformity.”

Source: The Cable

Ogoni Clean Up: FG Conducts Ground Breaking Ceremony.

Posted on February 17, 2017 by Staff Reporter

The out-going Minister of Environment, Amina Mohammed, has said that the people of Ogoni land will see tangible cleanup of their area in the next five years.

The minister said this during the ground breaking ceremony of the building of the centre of excellence, otherwise known as the Integrated Contaminated Soil Management Centre in Bori, Khana local government area of Rivers state.

The event brought together federal and state government officials, traditional rulers, commuinity leaders, as well as members of the board of trustees for the clean-up of Ogoni land.

In June 2016, the Federal Government formerly launched the clean-up of oil spills in the region, as recommended in the United Nations Environment Programme (UNEP) report.

The government had said that it is committed to restoring the ecosystem to what it used to be and as such restore the peoples’ source of livelihood.

It also stated that it is not just committed to implementing the UNEP report but is going beyond that by taking steps to improve security, good governance and economy of the Niger Delta region.

Source: Channels TV

NNPC denies collecting signature bonuses from oil companies.

Posted on February 1, 2017 by Staff Reporter

The Nigerian National Petroleum Corporation, NNPC, has said that it is not involved in the collection of signature bonuses paid by oil companies to the Federal Government upon their successful bid for oil blocks.

Speaking on the role of NNPC in the oil revenue collection process at a hearing of the House of Representatives ad-hoc Committee on Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs), the Group Managing Director of NNPC, Maikanti Baru, said the corporation had no
role in the collection of signature bonus.

A statement by Ndu Ughumadu, NNPC spokesperson, Tuesday, said the GMD who was represented by the Corporation’s Chief Operating Officer, Upstream, Bello Rabiu, noted that it was the Department of Petroleum Resources, DPR, not the NNPC, that was charged with the responsibility of taking receipts of signature bonuses and royalty.

The NNPC boss, according to the statement, explained that the arrangement allowed NNPC to lift the royalty oil from Production Sharing Contracts, PSCs, and remit the proceeds to the DPR, adding
that confirmation and reconciliation of royalty payments to the sister agency were carried out at the monthly meeting between the Office of the Accountant General of the Federation and revenue generating agencies.

“NNPC assured the Ad Hoc House Committee that it would furnish it with all pieces of information on its royalty remittances from the PSCs to the DPR from 1992 till date,” the statement said.

On his part, Chairman of the committee, Gideon Gwani, said the committee decided to invite all the agencies involved in the collection of oil revenues and the Central Bank of Nigeria (CBN) to
resolve the claims and counter-claims regarding the whereabouts of some signature bonuses and other revenues from some OPLs and OMLs.

He explained that the committee was mandated by the House of Representatives to investigate the award of all OPLs and OMLs granted to oil companies by the Federal Government, to, among other things, ascertain whether due process and guidelines for the acquisition of
oil and gas asset were complied with.

Other agencies invited for the hearing included the DPR, CBN, Office of the Accountant General of the Federation and the Petroleum Training Development Fund, PTDF.

Source: Premium Times

Oil prices stabilize as Russia joins OPEC in production cut

Posted on February 1, 2017 by Staff Reporter

Oil steadied on Wednesday as Russia joined OPEC in cutting production to balance the market, although large supply in places such as the United States dragged on prices.

The Organisation of the Petroleum Exporting Countries, OPEC, is an intergovernmental organisation of oil-exporting developing nations that aims to ensure stable oil prices within global oil markets.

Brent crude futures LCOC1, the international benchmark for oil prices, were trading at $55.63 per barrel at 0749 GMT (02:49 a.m. ET), up 5 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 5 cents to $52.86 a barrel.

Prices reversed earlier falls after reports that Russia cut its oil and gas condensate production by around 100,000 barrels per day (bpd) between December and January, down to 11.11 million bpd.

Russia’s cuts are part of an effort led by the OPEC, of which Russia is not a member, to prop up the market and end a global fuel supply glut.

As part of this, OPEC has said it will cut production by around 1.2 million barrels per day (bpd) in the first half of 2017.

Other producers, including Russia, have pledged to cut another 600,000 bpd in output.

A Reuter’s survey published on Tuesday showed that OPEC’s output fell by over 1 million bpd in January to 32.27 million bpd between December and January.

“That’s a good start to cut production to bring the market back toward balance,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

However, Mr. McKenna added that there were still some questions about whether or not OPEC will achieve its goals to cut even deeper and for the full period of the first half of 2017.

Traders said a reported climb in U.S. crude inventories was also preventing oil prices from rising by much.

“The release of the American Petroleum Institute’s (API) crude inventories at a much higher than expected 5.8 million barrels saw both Brent and WTI quickly give back gains,’’ Jeffrey Halley, senior market analyst future brokerage OANDA in Singapore, said.

The API data showed that commercial U.S. crude inventories now stood at 488 million barrels.

Official U.S. storage data from the Energy Information Administration (EIA) is due later on Wednesday.

Source: Reuters

Global oil output falls by 1.07 million bpd in January.

Posted on January 31, 2017 by Staff Reporter

Following the supply cut deal by the Organisation of Petroleum Exporting Countries, OPEC, oil output of member-states is set to fall by more than 1 million barrels per day (bpd) in January.

According to the report of a Reuters survey released Tuesday, the fall points to a strong start by the group in implementing its first supply cut deal in eight years.

The survey is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.

The Organisation of the Petroleum Exporting Countries agreed to cut its output by about 1.2 million bpd from January? 1 to prop up oil prices and reduce a supply glut.

The survey stated that supply from the 11 OPEC members with production targets under the deal has averaged 30.01 million bpd, down from 31.17 million bpd in December, based on shipping data and information from industry sources.

Compared with the levels that the countries agreed to make the reductions from, OPEC members have cut production by 958,000 bpd of the pledged 1.164 million bpd, equating to 82 percent compliance, the survey says.

It stated further that compliance of 80 per cent comfortably exceeds the initial 60 per cent achieved when the previous cuts deal was implemented in 2009, and it adds to indications that adherence to the deal so far has been high.

Reuters reports that oil edged above $55 a barrel on Tuesday. The cuts agreed by OPEC, Russia and other independent producers has helped to lift prices from a 12-year low near $27 a year ago.

The January drop in OPEC output has been offset slightly by higher supply from Libya and Nigeria, which are both exempted from the OPEC agreement because of output losses caused by conflict.

Saudi Arabia has reduced output to less than 10 million bpd in January, industry sources told Reuters, implementing a bigger cut than it had agreed to set a good example on compliance.

Iran, which was allowed to raise output under the OPEC deal because sanctions had crippled past supply, pumped an additional 20,000 bpd.

OPEC announced a production target of 32.5 million bpd at its November 30 meeting, which was based on low figures for Libya and Nigeria and included Indonesia, which has since left the group.

Combined output in January from all members is about 520,000 bpd above the target, adjusted to remove Indonesia, the survey showed.

“No plans to leave Nigeria”, says Total Oil.

Posted on January 26, 2017 by Staff Reporter

Total Nigeria has denied rumours that it is planning to leave the country any time soon.

Jean Philippe Torres, managing director of the organisation, made this known at the customer service day that held at Onigbagbo Total service station in Ikeja, Lagos.

Total recently indicated plans to spin off its downstream asset in Nigeria, feeding rumours that an exit could be in the works.

Torres used the programme as an opportunity to assure Nigerians of the continued presence of Total in the country.

“This event is to remind our customers of how significant they are to us. We at Total are keen to delivering good and satisfactory customer service,” he said.

“We want to make Nigerians understand that we are part of the communities. Once again, the main issue for us in Total is to tie the link with our esteemed customers and tell them that they are king at Total and that is the case.

“There were rumours that we wanted to leave the country, that is not the case. Total wants to stay in Nigeria.

“At Total, we have very strict control mechanism in order to make sure that our dispensers are really dispensing the right quantity.”

Commenting on alleged under-dispensing of petroleum products at the company’s filling stations, he said: “This is the responsibility of the full staff of our stations, dealers to make sure that we deliver to customers the quantity they pay for.

“We have system in place to control the stock level, deliveries to ensure that we really deliver the products needed and paid by the customers.”

Source: The Cable

Bad news for oil-producing countries as scientists near end to reliance on fossil fuels

Posted on January 26, 2017 by Staff Reporter

More bad news for Premium Motor Spirit (PMS) and other crude oil products as the quest to end the world’s reliance on fossil fuels advances: a fusion power firm has raised $500 million (£405 million) to develop commercial fusion power.

According to a detailed report in Science, Tri Alpha Energy has already developed a machine that can hold hot plasma steady at 18 million°F (10 million°C) for 11.5 milliseconds.

The firm will use the funds to extend this time further and at even higher temperatures, and believes that it could have the world’s first commercial fusion reactor by 2027.

Fusion involves placing hydrogen atoms under high heat and pressure until they fuse into helium atoms. When deuterium and tritium nuclei – which can be found in hydrogen – fuse, they form a helium nucleus, a neutron and a lot of energy. This is down by heating the fuel to temperatures hotter than the surface of the sun.

Strong magnetic fields are used to keep the plasma away from the walls so that it doesn’t cool down and lost it energy potential. These are produced by superconducting coils surrounding the vessel, and by an electrical current driven through the plasma. For energy production. plasma has to be confined for a sufficiently long period for fusion to occur.

The particular type of fusion power Tri Alpha is working on is based on heating hydrogen atoms to temperatures of 5.4 billion°F (3 billion°C) – which is hotter than the surface of the sun. The heat creates plasma that has a mixture of electrons and ions. When ions in a plasma collide, they fuse together to form new atoms and release huge amounts of energy. It is a relatively simple concept, but the trick is in heating the gas to such a high temperature. Currently no known material can hold this heat.

Over the years, scientists have come up with two main methods to overcome this; cause an implosion that occurs rapidly, or use a magnetic field.

Tri Alpha Energy is using the latter option, but says it has made its breakthrough with an unusual reactor design – a long, tube that collides pairs of plasma donuts to produce heat.

According to a detailed report in Science, the team has placed magnets around a cigar shaped configuration that allows for firing angled plasma beams at one another.

The plasma that forms from its hydrogen and boron sample is then stabilised with beams of high-energy particles.

Tri Alpha is keeping many details about its project under wraps.

But Science has confirmed that the company now plans to create a fusion tube that boasts even more power and can reach hotter temperatures for longer periods of time.

Using this approach, the scientists were able to reportedly heat the gas up to 10 million °C for 11.5 milliseconds, at which point the machine ran out of fuel.

This, however, is still short of the 5.4 billion °F (3 billion °C) temperature needed to achieve a fusion reaction.

The team now plans to use the $500 million (£405 million) funding to improve its machine, dubbed C-2U, to achieve a ten-fold increase in temperature needed to create a fusion reactor design.

Equatorial Guinea to join OPEC, agrees to production cuts

Posted on January 23, 2017 by Staff Reporter

The Ministry of Mines and Hydrocarbons of Equatorial Guinea says it has submitted its interest to join the Organization of Petroleum Exporting Countries (OPEC) in 2017.

Gabriel Mbaga Obiang, Minister of Mines and Hydrocarbons, travelled to Vienna on January 20 to meet with OPEC officials and present the Government of Equatorial Guinea’s offer to become the 14th member of the cartel.

With 32.5 million barrels per day of output projected this year, OPEC is the world’s largest organization of oil producers. The minister’s trip to Vienna followed the Fourth Africa-Arab Summit, which hosted, last November, several OPEC members in Malabo, the capital of Equatorial Guinea.

“For decades, Equatorial Guinea has achieved a sterling track record as a dependable supplier of petroleum to consumers in all corners of the world. We firmly believe that Equatorial Guinea’s interests are fully aligned with those of OPEC in serving the best interests of the industry, Africa and the global economy,” the minister said.

On December 10, 2016, Equatorial Guinea agreed to join 10 other non-OPEC countries to reduce 558,000 barrels per day of total oil production in 2017. Equatorial Guinea’s share of the cut is 12,000 barrels per day. Even through a two-year sustained slump in oil prices, Equatorial Guinea has maintained liquid output levels at a competitive level.

“There is a consensus amongst producers that an oversupply of oil has been dragging down the price of the barrel,” the Minister said. “Equatorial Guinea is doing its part to ensure stability in the market and that the industry continues to invest in exploring and developing our resources.”

Equatorial Guinea is the third largest oil and gas producer in sub-Saharan Africa. Its $10.6 billion of annual oil and gas exports account for 95 percent of the country’s total exports, with shipments sold every day to China, India, Japan, Korea and many other countries.

The country is investing in the entire energy supply chain through projects such as the Bioko Oil Terminal, the Fortuna Floating Liquefied Natural Gas project, the Riaba Fertilizers plant, compressed natural gas and LNG.

Equatorial Guinea is currently hosting its latest oil and gas licensing round, EG Ronda, putting on offer all of open acreage not currently operated or under direct negotiation.

The country has made 114 oil and gas discoveries to date with a drilling success rate of 42 percent.

SOURCE: Ministry of Mines, Industry and Energy Equatorial Guinea

A day after VP Osinbajo’s visit, militants ‘blow up’ pipeline in Delta.

Posted on January 18, 2017 by Staff Reporter

A militant group has blown up a crude oil trunkline in Ughelli, Delta state, a day after Yemi Osinbajo, vice-president, paid a visit to the Niger Delta region.

Punch reports that the attack was carried out by an “unidentified militant group”.

No militant group has claimed responsibility for this latest attack on an oil installation.

Osinbajo had on Monday led a federal government delegation to the region to kick-start the process of peace and stability.

During the trip, the vice president had met with traditional rulers and key stakeholders.

Speaking in Gbaramatu kingdom, Delta state, Osinbajo put out a clarion call, urging members of the region to embrace peace and “prepare for the future”.

“Our future is the future of progress and development. Unfortunately, there is no time because the future is already here.

“I have come with a message for the people of Gbaramatu Kingdom and the people of the Niger Delta as whole. It is a short message and I quote ‘we must prepare for the future’,” Osinbajo had said.

Ex-Militants Offer To Help Military Uncover Oil Pipeline Bombers.

Posted on January 16, 2017 by Staff Reporter

Leaders of the Presidential Amnesty Programme in Edo state say they are willing to work with the military to fish out those who are involved in the bombing of oil pipelines in the Niger Delta region.

Mr Reuben Wilson spoke on behalf of the ex-militants under the aegis of Leadership, Peace and Cultural Development Initiative during a press briefing in Benin City the Edo state capital.

He said that the approval of the 2017 budget for the amnesty programme by President Muhammadu Buhari was a sign of his commitment to restore total peace to the Niger Delta region.

“We were there before embracing amnesty and we know every in and out of that area. That is why I said it here that we will work hand to hand with the security agencies.

“That place is not strange for us, it is (a place) where we have operated in those days before accepting amnesty.

“So we will go down and work hand in hand with security agencies if we are accepted. That is one thing. If the security agencies want us to work hand in hand with them, we will work and we know total peace will come back,” he said.

The Coordinator of the Presidential Amnesty Programme, Brigadier General Paul Boroh said the ex-militants have embraced the agriculture programme of the Federal Government.

He said: “Like the Peremabiri Rice Farm, am making arrangement with the Minister of Water Resources. That farm is not under the Ministry of Agriculture, it is under the Ministry of Water Resources.

“I met with the Minister and he is very happy and we are planning to go together even though I have the knowledge of the place so that we can use it as part of the training ground to train the ex-agitators so that they can have first-hand information about how rice is being farmed.”

NNPC to set up oil and gas museum in Oloibiri

Posted on January 13, 2017 by Staff Reporter

The Nigerian National Petroleum Corporation (NNPC) on Thursday unveiled plans to set up an oil and gas museum in Oloibiri, the historic town where oil was first drilled in Nigeria.

This was disclosed by Bello Rabiu, NNPC chief operating officer, Upstream, who said it was part of plans to increase government revenue.

NNPC presented the Act to establish the National Oil and Gas Museum and Research Centre in Oloibiri, and recommended the construction of the museum with clear budgetary allocation from the federal government under the control and management of the National Commission for Museum and Monuments.

“It is better to refine and upgrade the capacity of the Petroleum Training Institute, in Warri and the National College of Petroleum Studies, Kaduna, in order to avoid duplication of functions and more importantly ensure optimal utilization of funds,’’ NNPC said.

Oloibiri had been the centre stage for Nigeria’s oil revolution after it moved away from agriculture.

Oil was first drilled in Oloibiri in 1956 before the nation’s independence.

8 months after, Nigeria reclaims spot as Africa’s largest oil producer.

Posted on January 12, 2017 by Staff Reporter

After eight months, Nigeria has reclaimed its spot as Africa’s largest oil producer, edging out Angola by a few thousand barrels per day.

In March 2016, Angola overtook Nigeria as Africa’s largest producer, with a production level of 1.782 million barrels per day, as Nigeria produced on 1.677 million bpd that month.

According to the Organisation of Petroleum Exporting Countries (OPEC) monthly oil report for December 2016, Nigeria pumped 1.782 million barrels per day while Angola produced 1.688 million barrels per day.

Ibe Kachikwu, minister of state for petroleum resources, had initially said Nigeria had hit 1.9 million barrels of oil in December 2016.

Nigeria however exported less crude to the Unites States than Angola did in the month under review.

“US imports of Angolan and Nigerian crude increased to 307,000 b/d and 303,000 b/d, respectively, by mid-November,” the report read.

Quoting a Stanbic IBTC report, OPEC said Nigeria’s private sector purchasing managers index (PMI) — an indicator of the economic health of the manufacturing sector — eased in November, 2016

“Following two consecutive quarters of contraction, the economy of Nigeria shrank by 2.3% y-o-y in 3Q16, according to the country’s National Bureau of Statistics. The Stanbic IBTC Bank Nigeria PMI highlighted that contraction in the private sector eased somewhat in November on renewed growth of new orders received.”

With the recent OPEC oil output deal, which does not require a cut from Nigeria, shows that the country could ramp up production in 2017 to about 2 million barrels per day.

The limits of 2017 optimism – By Chinaza Onuzo

Posted on January 12, 2017 by Staff Reporter

While the shakeup at the Financial Reporting Council is the biggest surprise of 2017 so far, I must admit that the wave of optimism that seems to be everywhere is a close second. Considering the doom and gloom with which we ended 2016, I did not expect us to be on the sunny side of life this quickly. Those must have been some amazing crossover services that Nigerians went to. Who knows maybe all we need for 2017 to be better than 2016 is a rush of animal spirits. However, just in case more than that is required, let’s take a look at the things that need to go right for 2017 to be the year of restoration and be significantly better than 2016.

Everybody and their gateman know the first requirement for a better 2017. Oil prices need to remain above $55 per barrel for most of the year. Is it right that we are so dependent on the price of oil – probably not – but it is what it is. With the oil price currently hovering around $55, it is possible that this most fervent of wishes could be granted. However with the need for the OPEC cuts to hold, and shale to not be too disruptive, and robust global economic growth – it looks like a lot of things have to go right for the $55 to be sustained but we will continue to hope because we have no choice.

However it will not be good for all our prayers to work and then we will then fall our own hands. So we must ensure that we meet our budget target of 2.2 million barrels of oil daily average production. Since we’re currently at around 1.8 million barrels per day, we better hope that the work being done to engage the Niger Delta Avengers and the other militant groups will actually succeed.

Can you imagine us finally solving the Joint Venture funding issue, having the right oil price and finally being tripped up by inadequate production volumes? We will need to avoid such in 2017 if we are to meet our objectives.

In the event that both the oil price and our production volumes hold up the government revenues will increase and our state governments will be able to pay salaries again and the civil service which remains the engine of growth in a lot of the smaller states can help in restarting those economies. If those economies restart then some of the unrest that has plagued our country for the last twelve months may start to subside. And who knows maybe the Nigerian military can reduce the number of states they are active in from pretty much all of them to a more manageable number.

The optimists are even expecting that these increased revenues could mean that the federal government and the CBN may even be willing to do something the issues affecting the naira dollar exchange rate. In theory, the increased revenue will give the federal government and the CBN the ability to loosen the restraints on the naira. However given our historically pegging it is highly likely that doing so will lead to slight additional devaluation say to about N330 to N350. Given the focus on 2019 and the need to not rock the boat it’s safe to say that won’t happen. The optimists in this case are hoping that the revenue will increase enough for the CBN to unban the 41 items and be able to settle demand. Otherwise our optimism will wane and it will be very hard for the economy to return to robust levels of growth.

Another key limiting factor is power. After all it is hard to see the optimists being right if we do not have power. Well the Minister of Power has recently announced that the transmission grid can wheel 7,500MW. For our economy to be truly jumpstarted we need to see significant progress in transmission as a whole. For the last few years we have struggled to generate, transmit and distribute 4,000MW. We have even had moments when we’ve dropped below 1,000MW. What that means is that the system has been teetering for a while. The inability of the transmission company to increase the capacity of the grid has been one of the largest limiting factors. If the Minister’s proclamation holds, then it is possible the power sector companies may actually be in a better position in 2017.

It the power companies get more power, they are probably better able to pay their debts. If they are better able to pay their debts, the banking system is less under threat of bad loans. If the banking sector is less under threat of bad loans we are likely to escape an AMCON 2. If there is no AMCON 2 that means that no bank is in danger of failing and we are better off as a nation.

There you have it. The things that need to go right for 2017 to be significantly better than 2016. They don’t seem like a lot – oil price, oil production, security, foreign exchange, power. However the first is outside our general control, and the others require strong decisions from our federal and state governments. This is not to say that these things can’t happen, but it seems like a very thin reed to base all our 2017 hopes on.

I find that there’s an assumption that 2016 was a difficult year and therefore 2017 must be better by fire or by force.

Unfortunately, there is no guarantee of this. The experiences of Venezuela and Zimbabwe tell us that things can continue to get worse if the right decisions are not taken. So, by all means be optimistic about 2017, however just remember that there needs to be action to turn the hopes for 2017 into reality.

Happy New Year!

Ijaw Youth Council urges FG to stop investigation into Malabu Oil deal

Posted on January 11, 2017 by Staff Reporter

Former President Goodluck Jonathan has denied media reports that he received gratification before approving the controversial Malabu Oil deal.

A statement by his spokesperson, Ikechukwu Eze, in Abuja yesterday said Jonathan did not send a businessman, Abubakar Aliyu, or any other person to receive a bribe on his behalf during or after the negotiation.

The statement reads: “Our attention has been drawn to news reports published mostly by online media which insinuated, rather than presenting factual evidence, that Jonathan received kickbacks in the $1.3bn OPL 245 oil block involving oil giants ENI and Royal Dutch Shell.

“We wish to state that the negotiations and transactions for the oil block predated the Jonathan’s presidency, which began on May 6, 2010 and ended on May 29, 2015. It may interest those promoting this false narrative to also know that the documents relating to the transactions are in the office of the Attorney General of the Federation and Minister of Justice.”

The spokesman further stated that Jonathan did not hold any secret meeting with the parties in the transaction, nether did anybody work for him.

“As President of Nigeria, Jonathan met with the executives of all the oil majors operating in the country to solicit support in the oil industry,” the statement added.

He urged the media to use the Freedom of Information Act, which Jonathan signed into law, to investigate stories before publication.

Meanwhile, the Ijaw Youth Council (IYC) has urged the Federal Government to stop an investigation into the Malabu oil deal.

The group’s President, Udengs Eradiri said in an interview that it was designed to witch-hunt the Niger Delta region, because an Ijaw man was involved.

According to him, it was worrisome that other oil blocks that were awarded through the same process were exempted from a similar probe.

Kachikwu: We’ll allocate oil blocks, pass PIB in 2017

Posted on January 11, 2017 by Staff Reporter

Ibe Kachikwu, minister of state for petroleum resources, says the federal government will be allocating oil blocks and passing the petroleum industry bill in 2017.

Unveiling his goals, and that of the ministry of petroleum resources, for 2017, Kachikwu said Nigeria would exploit the relationship built by President Muhammadu Buhari in taking a road show to the UK and US.

“We are going to accelerate federal government revenues, look into areas where we could have made more money, so as to support the 2017 financing,” Kachikwu said.

“We are going to be seeking to attract investments and complete all the MOUs; the one in China, the one in India… we are looking to do a roadshow to the UK, we are looking to do a roadshow to the US with President Donald Trump coming in.

“We are looking quite frankly to draw on the relationship that the president has built over time. We are going to be conducting oil blocks allocations and marginal flow awards to try and raise money for the government.”

Kachikwu, who also spoke on the petroleum industry bill, said Nigeria’s refineries would be revamped to produced at a utilisation capacity of 60 percent.

“We need to start the revamping of the refineries. The president has given us a matching order on that. We still remain committed on our goal of 2018: reduce importation by 60 per cent and 2019, try and exit the importation of petroleum products substantially.

“Now, are going to continue to focus on downstream issues. Although we have liberalised, there are still some challenges. We are going to see how we work within the liberalisation infrastructure such that we are able to take away the low-hanging difficulties.

“We are also going to focus on the Niger delta. It’s been too long a lingering issue. We are going to be working with every aspect of the presidency to try and find solution to this.

“We are going to run at a rocket pace. We have so much to do. First, we are going to firm up our policies, be able to gazette all our oil and gas policies and then pass the Petroleum Industrial Bill, PIB.”

Kachikwu praised Nigeria’s “influential role” in stabilising oil prices, saying he expects oil to trade in the $60s for the better part of 2017.

How Goodluck Jonathan benefited from Malabu oil deal kickback – AFP

Posted on January 10, 2017 by Staff Reporter

Italian prosecutors have alleged that Nigeria’s former president Goodluck Jonathan and his oil minister received kickbacks as part of a $1.3 billion deal involving oil giants ENI and Shell.

Court documents filed late last month in the city of Milan and seen by AFP outline a case against 11 people, including senior executives from the two oil majors and the companies themselves.

Jonathan, who left office in May 2015, and Diezani Alison-Madueke, his long-time petroleum minister who was also the first woman president of OPEC, do not feature on the list.

But they are alleged to have played a central role in the deal, which saw ENI and Shell make a $1.3 billion payment in 2011 for an offshore oil block in Nigeria.

No formal charges have been brought and the parties usually have 20 days to respond to the conclusion of the preliminary investigation report before any formal prosecution.

ENI chief executive Claudio Descalzi and his predecessor Paolo Scaroni met Jonathan “in person” to thrash out the deal, which also involved former British intelligence agents working as advisors for Shell, it was alleged.

Prosecutors allege ENI and Shell executives worked with Nigerian businessman Dan Etete, who was oil minister under the military ruler Sani Abacha from 1995 to 1998.

Etete’s company Malabu was the “fraudulent holder” of the OPL 245 block, according to the court documents.

After talks in Milan and Abuja, the block was bought illegally by the oil majors in contravention of domestic laws, “without competitive tendering” and with “full, unconditional exemption from all national taxes”, prosecutors said.

A total of $801.5 million was allegedly transferred to Etete’s Malabu accounts, of which $466 million was converted into cash in Nigeria and used for remunerating government officials, including Jonathan and Alison-Madueke, prosecutors said.

A further $54 million was withdrawn by Abubakar Aliyu, whom prosecutors describe as an “agent” of Jonathan.

The beneficiaries of the money went on a shopping spree buying “property, aeroplanes, armoured cars,” prosecutors added.

– ‘No basis’ for prosecution –

ENI and Royal Dutch Shell have both denied wrongdoing.

Shell said in an email: “We are aware of the investigation and we hope to show the prosecutor that there is no basis to prosecute Shell.

“Shell takes this matter seriously and is co-operating with the authorities.”

Nigeria’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC), has also recently pressed charges in connection with the same oil block deal.

Charges were “filed towards the end of last year”, EFCC spokesman Wilson Uwujaren told AFP, without elaborating.

Anti-corruption campaigners view the case as a classic example of graft in Nigeria but also an indication of the difficulty in tackling the problem when it crosses international borders.

Alison-Madueke is facing a flurry of graft allegations in Nigeria and was arrested by Britain’s National Crime Agency on suspicion of bribery and money laundering in 2015.

She has denied the allegations.

Last week, the Federal High Court in Lagos ordered Alison-Madueke to temporary forfeit $153 million that was allegedly syphoned from state coffers.

For his part, Jonathan has denied that his government was corrupt and contested his successor Muhammadu Buhari’s claim that he inherited a “virtually empty” treasury.

Buhari secured a historic first win for an opposition leader in Nigeria’s history when he defeated Jonathan in presidential elections in March 2015.

He campaigned on a platform to target endemic corruption and has said “mind-boggling” sums of money have been stolen from the public purse.

His government has arrested a series of high-ranking officials from Jonathan’s administration on corruption charges but few have been convicted.

Malabu Oil Deal: Jonathan, Diezani Recieved Part Of The $466m Kickbacks – Italian Prosecutor