‘Amukpe-Escravos pipeline provides the most secured crude oil export route in Nigeria now’

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FELIX AMIEYEOFORI is the executive consultant, operations, Pan Ocean Oil Corporation Nigeria Limited. In this interview with FRANK UZUEGBUNAM, Amieyeofori talks about Pan Ocean’s triple mega energy infrastructure projects slated for unveiling in June, amongst other issues. Excerpts:

Can you give us the update on Pan Ocean triple mega infrastructure projects ready for unveiling?      

As you said, these are mega projects that will change the landscape of the oil, gas and energy space in the country and even at international platforms.

First, the Amukpe-Escravos pipeline, a 160,000 bpd, 67-km 20-inch horizontal directional drilling (HDD) export line, is first of its kind in Nigeria and Africa.  With a burial depth of 45 -150ft, this is the most secured export route in the country.

Second, the 200 MMscfd gas processing plant with LPG/Propane modules, is a game changer also in the energy space as we are positioned to provide gas to power Nigerian homes, offices and industries, while also supplying LPG to bridge the short fall in LPG market in Nigeria.

Finally, the production of oil and gas from OML-147 at Owa Aladima is quite significant as it is the first to be on production amongst the 2007 bid rounds.

All the three projects which will be ready for unveiling at the technical start up taking place on June 10, 2019, will contribute significantly to Nigerian industrialisation and economic growth, on the one part and empowerment of the host and impacted communities.

Non-passage of the PIB stalled a lot of investment decisions in the sector. What gave Pan Ocean the impetus to go ahead with these mega projects?

Pan Ocean has been in this business for about 46 years, since 1973, with first oil production in 1976. We are also the first Nigerian company to sign … Read More...

Oil heads for worst close of the year

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Brent crude, the international oil benchmark, was on track for its biggest loss of the year so far on Thursday, as traders weighed the risks from a US-China trade war and rising inventories in the US.

Brent was down 4.6 per cent in mid-afternoon trading in London to $67.75 a barrel, having dropped through the $70 a barrel mark earlier in the day. US marker West Texas Intermediate lost 5.2 per cent to trade at $58.22 a barrel.

The sell-off weighed on oil companies traded in London, with BP and Royal Dutch Shell both losing 3 per cent, while midsized oil and gas explorers were some of the biggest fallers on the FTSE All-Share index.

The index tracking oil and gas companies on the FTSE 350 was down 3 per cent. Premier Oil fell more than 12 per cent, Genel Energy lost 8.5 per cent, while Tullow was down 7.5 per cent.

Oil’s slide comes despite mounting geopolitical tensions in the Middle East, with traders instead preoccupied with the fallout from the US-China trade war and its potential impact on oil demand growth.

Physical supplies of crude are seen as relatively tight due to US sanctions on Iran and Venezuela, and Opec-led production cuts, but stockpiles have been rising in the US, the world’s largest oil consumer and the heart of the shale boom.

Crude inventories in the US hit the highest level in two years last week, the US Energy Information Administration said on Wednesday.

The perceived risk of holding the debt of junk-rated issuers in the US energy industry picked up on Wednesday, according to data from Intercontinental Exchange and Bank of America Merrill Lynch. The gap in yield between a basket of bonds tracking companies in the sector and highly rated government … Read More...

Middle East tension gives Nigeria’s budget challenge helping hand

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Nigeria’s 2019 budget benchmark is predicated on $60 per barrel, though as of the time the budget was been prepared, crude oil price hovered around $50. It drew criticism and was considered unrealistic.
“Notwithstanding the recent softening in international oil prices, the considered view of most reputable analysts is that the downward trend in oil prices in recent months is not necessarily reflective of the outlook for 2019,” President Buhari had stated in his budget address while justifying the crude oil budget benchmark.
The country’s 2019 budget tilt more on crude oil revenue projected at N3.73tn. With the non-oil revenue estimated at N1.39tn, this leaves the economy vulnerable to oil price volatility and poses a major budget risk.
Another major shortcoming of the budget is the plan to borrow N1.649tn for the purpose of financing the budget deficit. Thus, with the recurrent spending estimated at N4.72tn, (inclusive of the provision made for the implementation of the new minimum wage), the economy could run into a major hitch should the sudden collapse of oil price in 2014 re-occur.
However, the rising Middle East tension which has boosted crude prices and kept prices above $70 level, at a time escalating trade war between the US and China is keeping oil prices subdued, is lending a helping hand to Nigeria’s budget challenges.
“Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region,” Swiss bank UBS said.
The attacks took place against a backdrop of US-Iranian tension over Iranian nuclear capabilities, its missile program and its support for proxies in Yemen, Iraq, Syria and Lebanon.
Asian shippers and refiners have put ships heading to … Read More...

Oil sector’s first quarter 2019 contraction points to turbulent economic times ahead

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The contraction in Nigeria’s oil and gas sector in the first quarter of 2019 is evidence of lack of new investments and capital inflows to the sector, according to industry experts. This points to turbulent economic times ahead as it challenges some assumptions underlying the country’s 2019 budget. Real GDP growth in the oil sector…

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NNPC confirms remitting N1.26tn to Federation Account in 2018

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The Nigerian National Petroleum Corporation (NNPC) said it met its financial obligations to the Federation Account in 2018 by remitting N1.26 trillion as against the N1.22 trillion projected in the 2018 budget, recording a surplus ofN41billion.

Managing Director of NNPC Capital, Godwin Okonkwo, made this submission when he represented the Group Managing Director, Maikanti Baru during a presentation to the House of Representatives Ad Hoc Committee on the Investigation of the Non-Remittances of Funds to the Federation Account by the corporation between July 2017 and December 2018 at the National Assembly Complex in Abuja.

Ndu Ughammadu,the  Group General Manager, Group Public Affairs Division,  quoted the GMD as saying that though 2.3million barrels per day (mbpd) was proposed in the 2018 budget, national daily production for the period under review oscillated between 1.9mbpd to 1.89mbpd.

Baru listed the two sources of inflows into the Federation Account from the NNPC to include equity crude oil sales less cost of recovery from the Joint Venture cash call arrears and domestic crude less cost recovery, adding that the JV cash call arrears were being efficiently managed now to ensure steady inflows to the Federation Account.

“The current management of NNPC ensures that it contributes to the cost of the production of crude oil and gas in the upstream sector to avoid a repeat of the mistakes of the past. If we had made cash call payments in the past, the arrears that we are liquidating now would not have arisen. The current situation creates a win-win scenario for the country. The NNPC is strategically saving for the rainy day to make a better future for all of us by liquidating the arrears”,  Okonkwo posited.

He noted that the corporation on a regular and sustained basis … Read More...