As four of the nation’s crude oil grades remain under force majeure and the schedule for two other grades face delay, the country is losing at least N10.7bn in revenue daily.
Following the declaration of force majeures on the grades, more than 700,000 barrels per day of production have been affected, denying the country a huge revenue, according to a report by Reuters on Thursday.
Nigeria relies heavily on earning from oil exports, and the recent production disruptions caused by militant attacks came as an additional headache for an economy that already suffers from the sharp drop in oil prices since 2014.
According to the government, the plunge is primarily due to the destruction of oil and gas installations in the Niger Delta region, and it has decreased the country’s revenue by over 60 per cent.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed this on Thursday at the headquarters of the Nigerian National Petroleum Corporation in Abuja while explaining how the crash in crude oil prices and the militancy by agitators in the Niger Delta region had adversely affected the nation’s economy.
He said, “We are presently passing through very grave circumstances in Nigeria. Oil that was at a price of about $120 is at about $42 per barrel today. The price has continued to struggle and based on this element alone, the Federal Government has lost over 50 per cent of its income and so do the states.
“As if that wasn’t bad enough, the militancy itself has brought down production from an average of 2.2 million barrels to about 1.4 million barrels today. And if I discount what I’m seeing here today, it probably is about 1.3 million barrels. So, what this means is that when you take the cumulative effect of both pricing and militancy, we are down to more than 60 per cent drop in the income of this country.”
Kachikwu’s statements came as the Group Managing Director, NNPC, Dr. Maikanti Baru, urged the National Association of Petroleum Explorationists to explore the hydrocarbon potential of green frontier basins in order to increase the nation’s reserves, which were fast depleting.
Baru gave this charge when he received the leadership of NAPE led by its National President, Mr. Nosa Omorodion, at the NNPC Towers.
The NNPC GMD described the association as a very important part of the oil and gas industry in promoting policy formulations that had led to the growth of exploration of hydrocarbon resources in Nigeria.
He urged NAPE to play a key role in promoting public private partnership in the exploration of some of the green frontier basins, noting that the Federal Government would be willing to provide the needed incentives for such prospective investors.
Earlier, the National President of NAPE had said the primary objective of the association was to promote excellent ideas in the exploration of hydrocarbon, which had contributed to the passage of landmark legislations such as the Local Content Act.
Omorodion felicitated with the GMD on his appointment, saying that NAPE would confer on him a honourary membership award, which is the highest award from the association, due to his track record in the Nigerian oil and gas industry.
The Energy International Administration, the statistical arm of the United States’ Energy Department, recently said Nigeria’s crude oil production would remain depressed through 2017 as a result of militant attacks.
The EIA said the crude oil production disruptions in Nigeria reached 750,000 bpd in May 2016, the highest level since January 2009.
Since the beginning of 2016, the Niger Delta Avengers have intermittently attacked the oil and natural gas infrastructure concentrated in the Niger Delta region.
For more than three months, three of the grades, Forcados, Qua Iboe and Brass River, have been under force majeure — a legal clause that allows companies to cancel or delay deliveries due to unforeseen circumstances.
Shell Petroleum Development Company of Nigeria Limited declared force majeure on exports of Bonny Light on August 12, just over a month after it lifted the force majeure it declared on the grade on May 10.
The oil major declared force majeure on liftings from the Forcados export terminal on February 21, following the disruption in production caused by the spill on its subsea crude export pipeline.
It remained unclear whether ExxonMobil would be able to use a smaller alternate pipeline to resume some Qua Iboe exports. No programme has emerged for the grade. Schedules for Erha and Bonga were also delayed, according to Reuters.
Sources were quoted to have said line tests had begun about two weeks ago. Repairs to the main subsea line are expected to take at least another month to complete.
Meanwhile, the country lost a total sum of $30bn in oil revenue between 2014 and 2015 as a result of the drop in crude oil prices, the Executive Director/Chief Executive Officer, the Nigerian Export Promotion Council, Mr. Segun Awolowo, has said.
He gave the figure on Thursday in Abuja while speaking at the graduation ceremony of the third batch of the NEPC zero-to-export capacity-building programme.
The NEPC boss said while the country earned about $70bn in crude oil in 2014, the amount earned dropped by $30bn in 2015 to $40bn.
He said as a result of the volatile nature of the oil market, the country could no longer depend on such commodity, hence, the need to groom a new crop of non-oil exporters that would assist in diversifying the economy.
He said, “The Federal Government fiscal strategy framework for the next three years is based on non-oil. So, you could not have chosen a better time to equip yourselves with the skills to effectively participate in non-oil export sector.
“Recent developments on global commodities market have triggered a wake-up call on the need for us to accelerate the diversification of our economy, moving away from an over-dependence on oil as our main source of revenue.
“Since peaking in June 2014, the price of crude oil has fallen roughly by 60 per cent. Nigeria lost $30b in oil revenue between 2014 and 2015.”
Awolowo said in a bid to encourage the new set of exporters, NEPC, in collaboration with Providus Bank Plc, had secured a N100m financing facility for the graduands.
The Executive Director, Providus Bank Plc, Mr. Kingsley Aigbokhaevbo, said the bank would continue to support the diversification strategy of the Federal Government.
He said the N100m facility would be made available to the new exporters, adding that this would enable them to achieve their objective of making their first exports in October this year.
The zero-to-export initiative is one on the programmes of NEPC that focuses on creating new generation of Nigerian exporters through practical and theoretical training of business executives, bankers, civil servants ad unemployed graduates among others in the export business.
So far, the programme has trained and graduated over 100 participants from Lagos and Abuja.
Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17
Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.
The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.
It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.
The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.
A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.
In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.
“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.
Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.
“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”
Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.
Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods
Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.
Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.
Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.
He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.
“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.”
According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.
After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.
The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.
Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.
Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.
“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”
He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.”
Ardova Plc in Talks to Acquire Enyo Retail and Supply Limited
Ardova Plc, Nigeria’s leading integrated energy company, has commenced discussions to acquire Enyo Retail and Supply Limited.
According to the statement issued and signed by Oladehinde Nelson-Cole, Ag. Company Secretary/General Counsel, Ardova Plc, Enyo is one of the newest and fastest-growing retail and supply companies in the downstream sector.
It stated, “This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.”
“This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.”
Speaking on the yet to be completed deal, Mr. Olumide Adeosun, CEO, Ardova Plc, said upon completion, Ardova will retain the Enyo branded stations which will operate side by side with the Ardova brand while simultaneously leveraging on the strengths of Ardova and its group companies.
He added that the two companies are determined to conclude the deal by the end of Q1 2021.
Enyo presently operates over 90 stations across the nation and attends to over 100,000 retail customers on a daily basis.
Ardova Plc and Enyo Retail & Supply Limited promised to furnish stakeholders with more information on the progress of the deal.
Finance4 weeks ago
Central Bank Closes 42 Microfinance Banks
Finance4 weeks ago
Zenith Bank Invests Over N12 Billion in Targeted Interventions, Posts N178 Billion PAT
Cryptocurrency4 weeks ago
US Securities and Exchange Commission Goes After Ripple(XRP)
Crude Oil4 weeks ago
Brent Crude Oil Dropped 1.9 Percent Amid Fast-spreading New Coronavirus
News2 weeks ago
Heartbroken American Mistress Displays Dangote’s Buttocks in a Viral Video
News4 weeks ago
Nigeria Prefers NIN Linked SIM Cards to Health as Crowd Gathers at NIMC Enrolment Centres
Crude Oil4 weeks ago
Seplat, Waltersmith Signed Crude Oil Purchase Agreement
News3 weeks ago
FCMB Group MD Links to Death of Tunde Thomas, Husband of Married Staff He Fathered Her Kids