Bad Times! OPEC oil now $27…$18 may be sooner than later

The Organisation of Petroleum Exporting Countries (OPEC) basket price for oil may be closer to the predicted $18 than thought, with the oil currently trading at $27.85 per barrel. 

According to OPEC secretariat calculations released on Friday, “the price of OPEC basket of thirteen crudes stood at 27.85 dollars a barrel on Thursday, compared with $29.71 the previous day”. 

Brent crude was 45 cents lower at $33.78 a barrel after sliding during European trading to a low of $32.16, a level last seen in April 2004. US West Texas Intermediate (WTI) was initially down by 3.9% to $32.40, its lowest since the 2008 global economic crisis WTI but eventually settled down at $33.27 a barrel. 

The global oversupply has continued to pull oil prices to new lows, leading to approximately 70 percent reduction in value than when the downturn began in June 2014. John Kilduff, founding partner at Again Capital, told CNBC on Monday that oil prices could go as low as $18 per barrel, following the Saudi-Iran tensions which fuelled soaring prices on Monday. “I think you’re going to get as low as $18 and maybe get as high as $48. … It’s going to get really ugly,” he told CNBC. 

“The Iranians doubled down again, if that’s even possible, by saying that they could put 500,000 more barrels on the market within weeks after the sanctions get lifted.” 

With current rate of decline, oil prices may sink to $18 earlier than expected. Global oversupply is currently within 500,000 to 2 million barrels per day, and could reach 3 million if Iran lives up to its word to add up to one million bpd as soon as possible. 

In all of these, Nigeria’s budgetary benchmark for 2016 fiscal year, still stands at overly optimistic $38 per barrel. The new OPEC reference basket of crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Kachikwu: From 2016, refineries will pay directly to federation account

Ibe Kachikwu, the group managing director of the Nigerian National Petroleum Corporation (NNPC), says from 2016, state-owned refineries will make direct payments to the federation account. The refineries are subsidiaries of the NNPC, which is the body expected to make the payments. 

But Kachikwu said the NNPC was adopting a plan that would give the refineries some sort of autonomy, without privatising them. In a statement by Ohi Alegbe, the corporation’s spokesperson, Kachikwu was quoted as saying high level discussions are underway with local and international investors to bridge the perennial JV cash call funding gap. “The new model is that refineries would now buy their own crude oil, refine it and make remittances to the federation account allocation committee (FAAC),” Kachikwu said. 

“They would operate a semi autonomy system that would enable them to run in a profitable manner.” Alegbe expressed the federal government’s readiness to raise funds from international investors and the private sector in 2016 to fund the joint venture cash calls between the NNPC and international oil companies operating in the country. 

Kachikwu said the initiative is geared towards rebottling the government from bearing the burden of funding capital intensive projects in the upstream sector of the oil and gas industry. 

The minister assured that the NNPC over 5000 kilometres of pipelines across the country would be privatized in order to enhance efficient management of the infrastructure, bringing pipeline vandalism to the barest minimum. According to him, in 24 months, Nigerians would see a positive dramatic turn in the refinery model, to meet needs not only in Nigeria but in the West African sub region. 

Speaking on the December deadline for the refineries, Kachikwu said the reports before him posit that, two of the refineries are likely to meet the deadline. Kachikwu disclosed that a “clean Nigeria after oil initiative” would be introduced in 2016 to ensure all the IOCs operating in Nigeria would adopt global best environmental practices that would guarantee the sustenance of the flora and fauna of communities where they operate even after they are long gone from the country. 

“I will engage the IOCs to stand up and get counted in the area of best environmental practices in 2016. “This initiative would help the IOCs to maintain a cordial relationship with the communities where they operate and the communities too would be satisfied with the efforts at the end of the day.”

Kachikwu removed as OPEC president after two days

The Organisation of Petroleum Exporting Countries (OPEC) has removed Ibe Kachikwu as its conference president.

Kachikwu, minister of state for petroleum, became OPEC president only on Wednesday, replacing Diezani Alison-Madueke.

However, a fresh election was made on Friday at the 168th ordinary meeting of the organisation in Vienna, Austria, Kachikwu’s first meeting at the helm.

In a statement by the organisation, registering the resumption of Indonesia as an OPEC member, the oil cartel declared the new holders of other offices.

“In approving Indonesia’s resumption of its full membership in the organization, the conference extended a warm welcome to its delegation, headed by HE Sudirman Said, minister of energy and mineral resources of Indonesia,” OPEC secretariat revealed.

“The conference elected HE Dr Mohammed Bin Saleh Al Sada, minister of energy and industry of Qatar, as president of the conference for one year, with effect from 1st January 2016, and HE Ali I. Naimi, minister of petroleum and mineral resources of the Kingdom of Saudi Arabia, as alternate president, for the same period.

“The conference failed to curb oversupply, as it banked on non-OPEC supply to drop in 2016, when the market is expected to experience a surge in demand.

“The latest numbers see OECD and non-OECD inventories standing well above the five-year average. Having reviewed the oil market outlook for 2015, and the projections for 2016, the Conference observed that global economic growth is currently at 3.1% in 2015 and is forecast to expand by 3.4% next year.

“In terms of supply and demand, it was noted that non-OPEC supply is expected to contract in 2016, while global demand is anticipated to expand again by 1.3 mb/d”, it stated.

The Conference decided that its next ordinary meeting will convene on Thursday, June 2, 2016 in Vienna, Austria.

Crude Oil Swap: NNPC Frustrating Our Investigations – Reps

The House of Representatives ad-hoc committee on Refined Products Exchange Agreement/Crude Oil Swap, yesterday, said the Nigerian National Petroleum Corporation, NNPC; Crude Oil Department and Pipeline and Products Marketing Company, PPMC, were frustrating its investigative enquiry into crude oil swap regime.

Fuel marketers call for release of N413bn subsidy claim

Some accredited oil subsidy marketers on Thursday said the failure of Federal Government to release the approved N413 billion subsidy debt was disrupting their fuel importation schedule.

The marketers made their feelings known in an interview with the News Agency of Nigeria (NAN) in Lagos.

They said that they were concerned that the money had not been released one week after the approval was granted.

The marketers alleged that the delay was affecting loading activities at depots and had led to the shutting down of some filling stations due to non-availability of petroleum products.

“Government, through the Central Bank of Nigeria, has not released any subsidy claims as promised.

“As I am talking to you we have been directed by the CBN to go and meet the Debt Management Office for clarification.

“All our efforts to get the said money have been in vain and to start importing has been a serious problem.

“There is no money to back up the cheques presented to the marketers.

“We do not even know the basis for the clarification of the cheques, but we are aware that there is no money in the account.

“It is like giving the marketers cheques only to discover that there was no money in the account.

“Nothing like importing now because all marketers are angry because of the failed promised,” one of the marketers alleged.

The market said; “If you go outside Lagos you know how much they are selling fuel per litre now, it is the last stock that we are selling now.

“It is unfortunate that the Department of Petroleum (DPR) is saying that we are hoarding the products, which is not the truth.

“We have not collected a single coin from the money.

“If not the fact that some of the marketers are making some money from other products, how do you think we will be able to get anything for now?

“We have been summoned by DPR for a meeting this morning to settle the crisis, we are only managing what we have in stock at present,” he said.

NAN recalls that the Federal Government, had on Nov. 3, approved the sum of N413 billion to petroleum products marketers as the outstanding payment for subsidy claims

NAN

Ibe Kachikwu Pledges To Boost Revenues, Discover More Oil And Gas

The Minister of State for Petroleum Resources, Dr Ibe Kachiwkwu, on Wednesday said the ministry would focus on boosting revenue generation through the discovery of more oil and gas in the country.

Kachikwu announced this while fielding questions from newsmen during his assumption of office in Abuja.

Ongoing reforms in NNPC anchored on NEITI Audit Reports

The Nigeria Extractive Industries Transparency Initiative (NEITI) has described its yearly investigative reports on the activities of operators in Nigeria’s oil and gas industry as the dominant document with which the federal government is restructuring business and operational processes at the Nigerian National Petroleum Corporation (NNPC).

Economic Crisis: Investment In Nigeria’s Oil And Gas Industry Down By 20%

Mr Ali Moshiri, the President of Chevron Africa and Latin America Exploration and Production, has said that the total investment in Nigeria’s oil and gas industry, which stood at 20 billion dollars in 2014, has dropped by 20 per cent in 2015.

Moshiri disclosed this in Lagos at the 33rd annual conference of the Nigerian Association of Petroleum Explorationists (NAPE).

Moshiri that said Nigeria accounted for 20 billion dollars out of the 600 billion dollars investment in the global oil and gas industry in 2014.

In Africa, Moshiri said, Nigeria was the top producer of liquid hydrocarbon and number three in gas production.

He said that the country’s position in gas was because of lack of gas infrastructure and not because of the level of its gas resources.

“But when you talk about investment, total industry investment in 2014 was about 600 billion dollars and Nigeria had around 20 billion dollars . After the price crash, there is tremendous reduction in global investment.

Moshiri said Nigeria had tremendous capacity and resources to produce far above the current two million barrels of crude oil per day, but added that much investment would be required.

He said 20 billion dollar investment would be required yearly for the country to replace its current production levels.

Moshiri said many projects were locked up in Nigeria because of cost citing the Bonga South West project as one of the them.

He said the current slump in crude oil price was as a result of `` much inventory in the oil market’’.

Moshiri said between 2014 and 2015, about four million barrels of crude oil per day were unconventionally introduced into the market which led to this development.

In his speech, Gov. Akinwunmi Ambode Nigeria currently maintained an economically unstable energy trade balance, in which the country exports virtually all the crude oil produced and import substantial part of the petroleum products consumed in the country.

Ambode, who was represented by the Commissioner for Energy and Mineral Resources, Mr Olawale Oluwo, also argued that the country had under-utilised other energy sources such as Bitumen, Coal and non-carbon-related energy sources.

“Therefore, the challenge before us is to determine how we as a nation can adapt to these emerging scenerios in global and national oil and gas, so that we take advantage of them and shape them to our advantage,” Ambode added.

Credit: Aitonline.tv

Oil, gas sector facing sharp low revenues – Kachikwu

The Group Managing Director of Nigeria National Petroleum Corporation (NNPC) Dr Ibe Kachikwu on Monday said the industry was facing a sharp lower revenues from the country’s oil assets.

Kachikwu said this at the 33rd Annual International Conference and Exhibition organised by Nigerian Association of Petroleum Explorationists (NAPE) in Lagos.

Economic Melt Down: NNPC loses N120bn in two months

The Nigerian National Petroleum Corporation incurred a total loss of N120.07bn in the months of August and September, the latest NNPC Group financial report has shown. According to the report, the corporation incurred losses of N60.67bn and N59.4bn in August and September, respectively.

NNPC Commence sale of Kerosene for N50 per litre

The management of the Nigeria National Petroleum Corporation, NNPC has commenced the sale of kerosene to residents of Ogun State, Southwest Nigeria at 50 Naira per litre.

NNPC records N38.67bn from sale of petroleum products in September

The Nigeria National Petroleum Corporation (NNPC), says it recorded N38.67billion from the sale of downstream petroleum products in September.

Oando records N179bn loss in 2014

Oando Plc announced a loss after tax of N179 billion for the financial year ended on December 31, 2014. The News Agency of Nigeria reports that this is against the backdrop of a profit after tax of N4.68 billion posted in 2013.

NNPC denies role in $25m failed oil deal

The Nigerian National Petroleum Corporation (NNPC) has denied having a link with the failed bid by an Indian company, Oil and Natural Gas Corp-Mittal Energy Limited (OMEL), to acquire an oil block and the consequent non-refund of the signature bonus it paid for the deal during the 2006/2007 oil bid round.

Oil prices stable after heavy drop

Oil prices steadied Tuesday after heavy losses the previous day, as markets looked ahead to more indications of world crude demand levels amid high supplies. Brent North Sea crude for delivery in December stood at $48.61 a barrel in London midday deals, unchanged from Monday’s close.

Ghana Resolves Dispute With Nigeria Over Unpaid Gas Bill

Ghana's government said it will pay a Nigerian gas consortium $170 million it owes by February, apparently resolving a dispute that led the consortium to threaten to cut its supply.

Nigeria gives Ghana February 2016 deadline to pay off $171.5m gas debt

N-Gas, the main supplier of gas to Ghana’s Volta River Authority through the West African Gas Pipeline, has given VRA up to the ending of Feb­ruary 2016 to clear its outstanding debt of $171.5 million.

NNPC pays $607.8m, N723.82bn to FG in 8 months

The Nigerian National Petroleum Corporation (NNPC) has disclosed it has paid a total of $607.8m (about N119.7bn) so far into the Federation Account Allocation Committee (FAAC), being dollar proceeds from export of oil and gas between January and August 2015.

NNPC denies reduction of pump price of petrol

The Nigerian National Petroleum Corporation, NNPC, has debunked reports in some social media of a purported reduction in current pump price of petrol from N87 per Litre to N57.

NEITI Alleges Loss Of $966m To Crude Oil Swap Deals in four years

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Friday said the Federal Government lost 966 million dollars in revenue from the crude oil swap deal between 2009 and 2012.