FG clarified that the Port Harcourt refinery would commence operations before the end of 2023, precisely in December, while Warri refinery which is also undergoing rehabilitation would started refining petroleum products by February.

It maintained that the December 2023 target for the completion of the rehabilitation of the Port Harcourt refinery remained sacrosanct, expressing satisfaction with the level of work done in the facility.

The Minister of State for Petroleum Resources, Oil, Heineken Lokpobiri, spoke during a working visit to the Port Harcourt Refining Company in Eleme, Rivers State, Friday, to inspect the project.

Lokpobiri, who was accompanied on the visit by the Minister of State, Gas Resources, Ekperikpe Ekpo, expressed happiness with the level of work done, adding the rehabilitation work which was approved for $1.5bn when completed by the end of 2023 will refine upto 60,000 barrels of crude per day.

He said the essence of the inspection was to ensure the timely rehabilitation of the Port Harcourt Refinery and completion of other refineries in the country at the scheduled dates.

Lokpobiri said: “The essence of today’s inspection is to come see the extent of work done at the Port Harcourt Refinery and we are happy with the level of work done here.

“From what we have seen here, we believe the project will be completed as scheduled. The Port Harcourt Refinery will come on board fully by the end of this year, 2023. Warri will start operating by the first quarter of next year and then, Kaduna will come on stream towards the end of next year.

“The Port Harcourt Refinery when completed is expected to produce about 54 to 60 barrels per day, while Warri refinery when it comes on stream by February, 2024 will produce 75 barrels of oil per day. If we add that to Dangote refinery we will be able to stop fuel importation and Nigeria can now have the benefits of full deregulation.

“We will be going round all the refineries in the country, from Port Harcourt, we will go to Warri, to Kaduna. We will also go to Dangote refinery to see the level of work there.

“Our objective is to ensure that in the next few years, Nigeria stops fuel importation and that is why we are here to see the extent of work done, and we are satisfied with what we are seeing here.”

“Nigerians should expect better supply of fuel and better economy. But I can assure you that Nigeria will have a better deal in this renewed hope Administration of president Bola Ahmed Tinubu.”

On his part, the Minister of State, Gas Resources, Ekperikpe Ekpo said, the government is very desperate about gas production and generation of power supply in the country.

Ekpo noted that the government is committed to ending gas flaring in the country.

“You know gas is very important and we have it in abundance. so the issue of gathering the gas to generate power supply and other areas that would need gas in the country is very important.

“The government is very desperate about it as it will bring in foreign investors to invest in the gas sector.”

“With the briefing we have received today, there is hope for Nigeria that gas flaring will stop and gas generation will increase, and with that we will have uninterrupted power supply in the country.”

On the government’s policy on Compressed Natural Gas, CNG, implementation for vehicles Ekpo said, “The policy is very simple and we are encouraging investors in that sector so that we have it in abundance, the vehicles will be converted to appreciate the usage of CNG which would be beneficial to all.

“So, there is desperate and dedicated efforts to make sure gas is available which of course will reduce the cost of gas in the vehicle as well as reducing the cost of using fuel.”

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The Central Bank of Nigeria, CBN, in its Monthly Economic Report, MER, for February 2023 released yesterday, indicated that the deficit during the month of February was N513.05 billion, bringing the total deficit for the first two months of 2023 to N931 billion.

The report indicated that the oil sector, which had recorded a growth of 31 per cent to N774.15 billion in January took a 60 per cent plunge to N308.07 billion in February.

The situation was not helped by a similar trend recorded for non-oil revenue, with a 3.7 per cent decline to N730.2 billion during the period.

As a result, revenue accruing to the Federation Account in February declined 32.3 % in February.

The CBN also reported that the expenditure side of the fiscal operations compounded the deficit position with a 5.9 percent increase in expenditure to N991.6 billion during the period.

Federation receipts tumble

The CBN stated: “At N1.038 trillion, federation receipts were below the level in January by 32.3 per cent. Similarly, it was below the budget of N1.580 trillion by 34.3 per cent.

“The decline relative to January was attributed to a fall in collections from Petroleum Profit Tax and Royalties. Oil revenue, at N308.07 billion, was 60.2 per cent below receipts in the preceding month.

“The outcome was driven, largely, by the 60.5 per cent decrease in collections from Petroleum Profit Tax and Royalties. Similarly, at N730.21 billion, non-oil revenue, was below the level in the preceding month and the monthly target by 3.7 per cent and 7.4 per cent, respectively.

“The decrease was largely attributed to the 10.5 per cent decline in collections from corporate tax on account of the seasonality associated with its payments

“At N478.57 billion, retained revenue of FGN was below the level in January and the proportionate budget by 7.7 per cent and 42.4 per cent, respectively.

“Provisional aggregate expenditure increased on account of the rise in both recurrent and capital expenditures. Consequently, the provisional aggregate expenditure of FGN at N991.62 billion rose by 5.9 per cent relative to the level in January and was 31.3 per cent below the monthly target.

“A breakdown of the expenditure reveals that recurrent expenditure, capital expenditure, and transfers accounted for 84.7 per cent, 9.5 per cent and 5.8 per cent of total expenditure, respectively.

“At N513.05 billion, the provisional fiscal deficit of the FGN rose by 22.8 per cent relative to the preceding month. However, it was 16.2 per cent below the budget benchmark.”

Commenting, David Adonri, Vice Chairman, Highcap Securities, said: “Full year 2023 appropriation law is a deficit budget. Current administration must obey the law. They can review the budget and send a bill to amend the law.

“However, CBN report covers the period before assumption of office by this new administration. With the removal of fuel subsidy which constitutes a major expenditure item, this administration can cut the deficit if it follows the budget.”

Subsidies, debt service should be dealt with —Prof Uwaleke

President, Association of Capital Market Academics of Nigeria, ACMAN, Prof Uche Uwaleke, said: “Deficit spending is made worse by rising fuel subsidies and huge debt service burden. This is the major justification for an end to fuel subsidy removal and a halt to contracting new loans that are not self-liquidating.

“This budget cannot attain fiscal consolidation until the challenges posed by fuel subsidy and high debt service obligations are dealt with.”

Oil theft, bunkering should be addressed — Kurfi

Commenting also , the Managing Director/CEO, APT Securities & Funds Limited, Mallam Garba Kurfi, said: “It is not a surprise to have deficit as the production of crude oil fall below one million barrel per day.

“The Government should, with immediate effect address the official bunkering of crude oil because from 1.5 million barrel per day, MBPD, reduced to less than one million is a matter that requires urgent attention and need to be given serious attention.

“This will give immediate relief while looking into other leakages of revenue for blocking.”

Leakages should be blocked —Chiazor

Head of Research and Investment at Fidelity Securities Limited, Victor Chiazor, said: “Deficit financing is not really an issue, especially when this financing goes into the production and manufacturing arm of your economy as against deficit financing of consumption.

“We are of the opinion that the deficit position reported by the CBN will significantly drop on the back of the recent subsidy removal by the current administration. The next phase will be to now block other leakages and find smart ways to improve government revenues.

“However, growing government revenues will not be immediate hence we expect this deficit spending to continue in the medium to short term.”

Govt should reduce cost of governance — Oni

The Managing Director, Sofunix Investment and Communications Limited, Sola Oni, said: “The new administration should reduce the huge cost of governance, channel the anticipated gains from fuel subsidy to provide infrastructure and other indices of enabling environment to enhance productivity. Debt reschedule is not new to Nigeria and a lot can be realized from taxation by deploying technology. In 1994, Sweden was nearly bankrupt but by applying spending cut and creative tax generation , the country returned to balanced budget.”

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This is according to the 2021 crude oil and condensate production report released by the Department of Petroleum Resources (DPR). The data showed oil production between January and August.

According to the report, Nigeria’s crude fell from an average 1.36 million barrels per day in January to 1.23 million b/d in August, representing a 9 percent decline.

For month-to-month, production of crude and condensate in August fell 6.7 percent from 1.64 million b/d in July.

By implication, the development would affect the nation’s crude exports and foreign earnings. Brent crude stood at $71 a barrel on Thursday.

Checks showed that difficulties in some oil terminals caused the decline in Nigeria’s oil output.

In August, Shell Petroleum Development Company of Nigeria declared force majeure on Forcados crude oil.

Forcados pipeline, which exports an average of 240,000 barrels of crude oil daily, is one of Nigeria’s main crude oil terminals.

Force majeure refers to a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happen.

Shell’s decision to declare a force majeure on the oil terminal is reportedly due to “the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy” — indicating a case of an oil spill.

According to the DPR report, crude oil production at Forcados terminal dropped consecutively since June — slumped from 5.7 million barrels in July to an average of 2 million barrels in August.

With the decline in oil production, Nigeria falls below the production cap under the OPEC+ deal at 1.596 million b/d for the month under review.

On Thursday, Sarki Auwalu, director of the Department of Petroleum Resources (DPR), said optimisation of Nigeria’s oil production processes is crucial in the nation’s economic recovery drive.

Auwalu identified five pillars to its strategy for Maximum Economic Recovery (MER) for the industry, stressing that the objective of the strategy was to maximise the expected net value of economically recoverable petroleum from Nigeria’s acreages.

He listed items in the strategy to include reserves maturation and production optimisation, exploration and resources maturation, and improved oil recovery and enhanced oil recovery (IOR/EOR) implementation in the industry.

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Nigeria, Africa’s largest economy, officially slumped into a recession — the worst in 33 years — following the second consecutive economic contraction for the year.

Nigeria shrank 3.6 percent in three months (July to September), having earlier recorded a 6.1 percent contraction between April and June. An economy is officially declared to be in recession after two consecutive quarters of negative economic growth as measured by a country’s GDP.

The report shows that Nigeria’s average daily oil production in third quarter (Q3) stood at 1.67 million barrels per day (mbpd), from 1.81 mbpd in the previous three months — this is the lowest since the third quarter in 2016. Nigeria cut oil production to meet OPEC+ compliance.

Real growth for the oil sector contracted at 13.89 percent in Q3 — indicating a sharp contraction of 20.38 percent points relative to the rate recorded in the corresponding quarter of 2019.

The oil sector contributed 8.73 percent to total real GDP in Q3, down from 9.77 percent and 8.93 percent, respectively, recorded in the corresponding period of 2019 and the preceding Q2 2020.

The non-oil sector grew by -2.51 percent in real terms during the quarter, which is -4.36 percent points lower than the rate recorded in Q3 2019, but 3.54 percent points higher than in the second quarter of 2020.

Non-oil sector grew by -2.51 percent in real terms during the quarter, which is -4.36 percent points lower than the rate recorded in Q3 2019.

In real terms, the non-oil sector contributed 91.27 percent to the nation’s GDP in the third quarter, higher than its share in the third quarter of 2019 (90.23 percent) and Q2 (91.07 percent).

The non-oil sector was driven mainly by information and communication (telecommunications), with other drivers being agriculture (crop production), construction, financial and insurance (financial institutions), and public administration.

The information and communication sector grew by 14.56 percent in Q3 from 16.52 percent in Q2 2020 and 9.88 percent in Q3 2019, driven by a 17.36 percent growth in telecommunications and information services.

Information and communication sector accounted for 13.47 percent of the total GDP as at Q3 2020, compared to 17.83 percent contribution in the preceding quarter.

The agriculture sector continued on its positive growth at 1.39 percent, a drop from 1.58 percent recorded in the second quarter.

Of the four sub-activities that make up the agriculture sector, three (crop production, livestock, forestry) recorded positive growth, while the fishing sub-sector recorded negative growth.

Crop production remained the major driver of the sector, accounting for 92.93 percent of the overall nominal growth of the sector in the third quarter of 2020.

In terms of contribution, the sector contributed 30.77 percent to overall GDP in real terms in Q3 2020, higher than the contribution in the third quarter of 2019 and the second quarter of 2020 which stood at 29.25 percent and 24.65 percent, respectively.

The manufacturing sector contracted by 1.51 percent in Q3 2020 from 8.78 percent in Q2 2020 and 1.1 percent in Q3 2019. Of the 13 activities that make up the sector, four sub-sectors recorded positive growth. These include cement at 11.96 percent; food, beverage, and tobacco (5.57 percent); chemical and pharmaceutical products (6.60 percent); motor vehicles and assembly (7.03 percent).

The construction sector grew by 2.84 percent in Q3 2020 from a contraction of 31.77 percent in Q2 2020 and 2.37 percent in Q3 2019.

Financial and insurance sector grew by 3.21 percent in Q3 2020 from 18.49 percent in Q2 2020, driven by the financial services which grew at 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020.

The finance and insurance sector consists of the two subsectors — financial institutions and insurance, which accounted for 88.89 percent and 11.11 percent of the sector in real terms in Q3 2020.

The contribution of finance and insurance to real GDP reached 2.67 percent, higher than the contribution of 2.49 percent recorded in the third quarter of 2019.

On the other hand, the trade sector contracted by 12.12 percent in Q3 2020 from 16.59 percent in Q2 2020 and 1.45 percent in Q3 2019.

Air transport under the transportation and storage sector also contracted by 38.86 percent in Q3 2020 from 57.38 percent in Q2 2020 and 15.23 percent in Q3 2019.

The real estate sector continued in recession contracting by 13.4 percent in Q3 2020 from 21.99 percent in Q2 2020 and 2.31 percent in Q3 2019.

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Trump tweeted news of his positive result, just hours after the White House announced that Hope Hicks, one of his aides, had come down with the virus after travelling with the president several times this week.

Brent crude slipped on the Trump news and was down $1.12, or 2.7 percent, at $39.81 a barrel by 0710 GMT. U.S. oil was also down $1.12, or 2.9%, at $37.60. US and Brent crude are heading for drops of around 5 percent and 6 percent, respectively, this week for a second consecutive week of declines.

Also, US stock futures and Asian shares fell Friday. The future contracts for both the S&P 500 and the Dow industrials dropped nearly 2 percent but were trading 1.2 percent lower several hours later.

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Osagie Okunbor, the Chairman of Shell Companies in Nigeria disclosed the production data in the oil firm’s 2020 briefing notes made available to the News Agency of Nigeria (NAN) on Wednesday in Yenagoa.

According to the publication, SPDC achieved the feat in 2019 when its production rose more than 10 per cent to 514,000 barrels of oil equivalent per day (boe/d) due to enhanced exploration and production activities.

On gas production, the SPDC stated it fed the domestic market and to the export market through the Nigeria Liquified Natural Gas (NLNG) plant, adding that it supplied approximately 50 per cent of the NLNG plant capacity.

The company’s gas feed to the NLNG facility in Bonny Island in Rivers comes largely from the Gbaran-Ubie and Soku plants in Bayelsa and Rivers.

According to the publication, gas production from Soku facility increased from 100 Million standard cubit feet per day (MMscf/d) in 2018 to 350MMScf/d in 2019.

The SPDC also stated that the improved oil output was due to addition of 106 producing wells within its oil blocks in the Niger Delta.

The oil firm said that within the period under review, the Trans Ramos Pipeline which conveyed crude to its Focados oil export terminal was re-opened.

It said that the Gbaran-Ubie gas plant in Yenagoa, achieved peak production with 175,000 barrels of oil equivalent per day.

SPDC said it had the largest oil production asset in the country and operated a leased area of 31,000 square kilometres from which it produced while working to increase capability by investing in exploration and production activities.

“The SPDC JV’s assets include 340 producing oil wells consisting 97 land, 181 west and 62 central assets, 56 producing gas wells (10 land, three west and 43 central assets). A network of approximately 4,000 km of oil and gas pipelines and flow lines.

“The assets include 10 gas plants, two major oil export terminals, Bonny and Focados and an additional export facility a shallow water Floating Production Storage and Offloading Vessel christened `Sea Eagle’ currently stationed off Bayelsa coastline, One power plant,” the publication said.

The post SPDC’s oil production hits 514,000 bpd – Report appeared first on New Mail Nigeria.

Prices fell as much as 31% following the Saudi move to start a price war after Russia balked at making the further steep output cuts proposed by OPEC to stabilize oil markets hit by worries over the global spread of the coronavirus.

Brent crude futures were down $11.31, or 25%, at $33.96 a barrel by 0319 GMT, after earlier dropping to $31.02, their lowest since Feb. 12, 2016. Brent futures are on track for their biggest daily decline since Jan. 17, 1991, at the start of the first Gulf War.

U.S. West Texas Intermediate (WTI) crude fell by $10.73, or 26%, to $30.55 a barrel, after touching $30, its lowest since Feb. 22, 2016. The U.S. benchmark is also heading for its biggest falling since January 1991.

“I think all forecasts are out the window,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney. “It seems like a race to the bottom to secure order(s).”

The disintegration of the grouping called OPEC+ – made up of OPEC plus other producers including Russia – ends more than three years of cooperation on supporting the market, most recently to stabilize prices under threat from the economic impact of the coronavirus outbreak.

Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April after the current deal to curb production expires at the end of March, two sources told Reuters on Sunday.

The world’s biggest oil exporter is attempting to punish Russia, the world’s second-largest producer, for not supporting the production cuts proposed last week by the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Arabia, Russia and other major producers last battled for market share like this between 2014 and 2016 to try to squeeze out production from the United States, which has grown to become the world’s biggest oil producer as flows from shale oil fields doubled its output over the last decade.

“Saudi Arabia and Russia are entering into an oil price war that is likely to be limited and tactical,” Eurasia Group said in a note.

“The most likely outcome of this crisis is entrenchment into a painful process that lasts several weeks or months, until prices are low enough to change fundamental views in Moscow and Riyadh back (to) some form of compromise on resumed OPEC+ production restraint,” Eurasia said.

Saudi Arabia opened the war by cutting its official selling prices for April for all crude grades to all destinations by between $6 and $8 a barrel.

Meanwhile, China’s efforts to curtail the coronavirus outbreak has disrupted the world’s second-largest economy and curtailed shipments to the biggest oil importer.

And the spread of the virus to other major economies such as Italy and South Korea and the growing number of cases in the United States have increased concerns that oil demand will slump this year.

Major banks such as Morgan Stanley and Goldman Sachs have cut their demand growth forecasts, with Morgan Stanley predicting China will have zero demand growth in 2020. Goldman sees a contraction of 150,000 bpd in global demand.

Goldman Sachs cut its forecast for Brent to $30 for the second and third quarters of 2020.

In other markets, the dollar was down sharply against the yen, Asian stock markets were set for big falls, and gold rose to its highest since 2013 as investors fled to safe havens.

The post Oil plunges 25% after Saudi Arabia slashes prices, says will open taps appeared first on New Mail Nigeria.

She therefore called for utilization of new trends and ideas in hydrocarbon exploration and proper adjustment of hydrocarbon exploration strategies to discover more oil-gas fields to guarantee energy security in Nigeria.

She stated this while delivering the 101st inaugural lecture of the University titled: Innovation and technology in Petroleum Geophysics: A paradigm shift to the new exploration frontiers.

She urged the industry and the academia to improve on technical integration and concepts that originate along the boundaries of different technical disciplines. To achieve this, she recommended an adaptation of curricula to attain more significant skills, a change of teaching methods to reorient education towards becoming more practical, and development of skills and competencies in the downstream sector.

Admonishing the oil and gas industry, Olowokere said exploration companies must accept new technology at a faster pace to enhance accelerated technology development. Reviewing the performance of Oil Gas industry, she said the 21st century Oil and Gas industry is driven by innovation and technology. This has dramatically altered the manner in which oil and gas resources are identified, developed and produced.

She however assured that emerging technologies in robotics and automation have the potential to improve operations in the industry by reducing costs and increasing safety, efficiency and speed in obtaining products from the challenging conventional and non-traditional sources.

Professor Olowokere further listed the impact of innovation and technology in the petroleum industry to include cost reduction and time saving, efficiency gains and sustainable growth. She also said that emerging technologies in petroleum exploration and production will reduce hazard and increase company’s revenues.

“Most of the oil and gas activities in the past have traditionally relied on manual, expensive and risky methods. Carrying out most of the operations require expensive, bulky and slow technologies in addition to specialized skills and equipment. Some of these expose the workers to several safety hazards such as toxic gases, falling, fire, accidents and others. The oil and gas specialists must be highly trained, insured and accommodated whenever they go out in the field. The older methods increase the operational costs, hence reducing the company’s revenue” she added

Professor Olowokere, a member of several professional bodies (Iocal and international) who has attracted several donations to the department of Geophysics from local and foreign organizations also called for greater government support for academic institution. She said such support will ensure availability of highly trained researchers and staff who will guide the country to develop technologically.

Olowokere, a research consultant to Nigerian Content Development and Monitoring Board and external examiner for post graduate in Geophysics programme to many Nigerian Universities called for a change in teaching methods to become more practical through application of experimental learning approaches and skill development. She also advocated a geophysics solution to global warming being experienced worldwide. Professor Olowokere said the Digital Images of our planet, inside and out come from the digital processing methods originated in geophysics.

Introducing the lecturer, the Vice-Chancellor, Professor Joseph Fuwape who chaired the event described her as a thorough bred and brilliant academic who has added value to her field. He acknowledged her immense contributions to the development of the university by attracting several donations to the institution.

The lecture attracted top notch from the academic, oil and gas and traditional institutions.

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The disruptions add to supply worries around the world. Venezuela’s production has collapsed due to a lack of investment and Iranian exports have suffered due to U.S sanctions. OPEC has little capacity to fill the gap as demand for oil quickens.

Benchmark Brent oil futures LCOc1 rose by 96 cents, or 1.2 percent, to $79.03 per barrel by 1058 GMT. They earlier hit an intraday high of $79.29. Brent gained 1.2 percent on Monday.

U.S. light crude futures CLc1 were up 38 cents, or 0.5 percent, at $74.23.

Mounting supply concerns could push Brent above $85 per barrel, MUFG Bank said in a note.

“Renewed geopolitical supply-side disruptions stemming from Canada, Iran, Libya, Venezuela and the U.S. raise the likelihood of oil trade interruptions and with it upside risks to oil prices in the near term,” MUFG said.

Hundreds of workers on Norwegian offshore oil and gas rigs went on strike on Tuesday after rejecting a proposed wage deal, leading to the shutdown of one Shell-operated oilfield.

That potentially adds to disruptions in other oil producers amid tensions in the Middle East.

Libya’s national oil production fell to 527,000 barrels per day from a high of 1.28 million bpd in February following recent oil port closures, National Oil Corp said on Monday.

The United States says it wants to reduce oil exports from Iran, the world’s fifth-biggest producer, to zero by November, which would oblige other big producers to pump more.

Saudi Arabia, fellow members of the Organization of the Petroleum Exporting Countries and allies including Russia agreed last month to increase output to dampen price gains and offset global production losses.

The market has grown concerned that if the Saudis offset the losses from Iran, that will use up global spare capacity and leave markets more vulnerable to further or unexpected production declines.

“The bottom line becomes the available spare capacity within OPEC … and the markets have started to focus on that,” said Victor Shum, vice-president for energy at IHS markets in Singapore.

Money managers raised their bullish bets on U.S. crude in the week to July 3, the U.S. Commodity Futures Trading Commission said on Monday.

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Brent crude futures, the international benchmark for oil prices, were at 58.27 dollars at 0131 GMT, up 39 cents, or 0.7 per cent from their last close – and a third above mid-year levels.

U.S. West Texas Intermediate (WTI) crude futures were at 52.08 dollars per barrel, up 20 cents, or 0.4 per cent and almost a quarter above mid-June levels.

Traders said that prices were pushed up by a drop in U.S. crude inventories as well as concerns that fighting in Iraq and mounting tensions between the United States and Iran could affect supplies.

U.S. crude inventories fell by 7.1 million barrels in the week to Oct. 13 to 461.4 million barrels, the American Petroleum Institute (API) said late on Tuesday.

Official U.S. fuel inventory data is due to be published later on Wednesday by the Energy Information Administration.

Adding to a tightening U.S. market, tensions in the Middle East meant that a risk premium was being priced into oil markets.

Iraqi government forces captured the major Kurdish-held oil city of Kirkuk earlier this week, responding to a Kurdish independence referendum, and there are concerns that fighting could disrupt supplies.

The Iraq crisis adds to a looming dispute between the United States and Iran.

Last Friday U.S. President Donald Trump refused to certify Iran’s compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.

During the previous round of sanctions against Iran, some 1 million bpd of oil was cut from global markets.

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