European Oil Coys Selling Toxic Fuel Across Africa – Report
European oil companies, especially Swiss commodity traders, are exploiting weak African fuel standards by selling toxic diesel and gasoline across the continent, a campaign group said Thursday.
A three-year investigation published by Switzerland-based environmental and economic group Public Eye did not accuse oil companies of breaking any laws.
But it charged several firms with using an “illegitimate strategy” to boost profits, hawking so-called “African quality” fuels that have had devastating health and environmental impacts across many sub-Saharan states.
In a 160-page report based on research in eight African countries, Public Eye found fuels sold at the pump which contained high levels of toxins, notably sulphur.
In Africa, sulphur limits are on average 200 times higher.
“By selling such fuels at the pump in Africa, the traders increase outdoor air pollution, causing respiratory disease and premature death,” said the report from Public Eye, a group previously known as the Bern Declaration and founded in 1968.
Among the key culprits, Public Eye named Swiss traders Vitol and Trafigura as well as the multi-national energy group Oryx, which specialises in the African market.
In a statement sent to AFP, Vitol called the report “inaccurate and misinformed,” stressing that African governments were responsible for setting their own fuel standards.
Oryx made the same case, noting in a statement that it sells fuel products “that strictly comply with the national legislation of each client country.”
– Call to act –
Public Eye tested fuel sold in Angola, Benin, Congo-Brazzaville, Ghana, Ivory Coast, Mali, Senegal and Zambia.
While sub-Saharan Africa includes major oil producers like Angola and Nigeria, limited refining capacity on the continent means that most African oil is sold as crude on the international market.
States then import fuel products refined abroad, often from European traders.
These transactions often involve regional brokers in Africa, who are sometimes responsible for mixing the fuel.
Public eye called on African governments “to set stringent fuel quality standards” in line with European levels, arguing that was the most effective way to crack down on toxic blends.
Fears that banning low-quality blends will raise costs for consumers are misguided, the report said.
It noted that measures in East Africa to limit sulphur continent had “no impact on prices at the pump.”
Importing better fuel would also lower healthcare expenses and reduce vehicle maintenance costs in the long run, Public Eye argued.
With many of the toxic blends produced in Europe and the United States, Public Eye urged Western governments to ban the export of fuel products that do not meet their own domestic standards.
Oil Prices Rise on Unexpected U.S. Crude Stockpile Drop and Halt in Iraqi Exports
Oil prices increased on Thursday due to a surprise decline in U.S. crude stockpiles and a stoppage in exports from the Kurdistan region of Iraq that outweighed a smaller-than-expected cut in Russian supplies.
Brent crude oil, against which Nigerian oil is priced, climbed 0.51% to $78.68 a barrel while West Texas Intermediate crude oil rose 0.71% to $73.49 a barrel.
The Energy Information Administration revealed on Wednesday that U.S. crude oil stockpiles had dropped unexpectedly in the week ended March 24 to a two-year low.
Analysts had predicted a 100,000-barrel increase, but the inventory dropped by 7.5 million barrels.
Also, exports from Iraq’s northern region remained suspended due to oilfield producers shutting down or decreasing production following a stoppage to the northern export pipeline.
The Kurdistan-Iraq premium in oil prices, however, may vanish sooner than anticipated, as analysts from Citi predicted that pipeline flows could grow by around 200,000 barrels per day due to changes in Iraq’s domestic politics, which could lead to a durable political settlement.
Although the lower-than-expected cut to Russian crude oil production caused bearish sentiment, it was offset by the unexpected U.S. crude stockpile drop and halt in Iraqi exports.
The 300,000 barrels per day production decline in the first three weeks of March represented around 5% of Russian output, compared to targeted cuts of 500,000 barrels per day.
UBS stated that they anticipate rising Chinese crude imports and lower Russian production to boost prices over the coming quarters, despite the potential for near-term volatility in oil prices.
Meanwhile, markets will keep an eye on U.S. spending and inflation data scheduled for Friday and their impact on the value of the U.S. dollar.
NNPCL Intensifies Oil Exploration, Targets 50 Billion Barrels Reserves
The Nigerian National Petroleum Company Limited, NNPCL has intensified efforts to boost the nation’s crude oil reserves to 50 billion barrels.
Investors King gathered that the NNPCL has drawn out plans to move from the 37 billion barrels of oil reserves to 50 billion barrels through its recent projects.
This is as the national oil company launched officially the spud-in (drilling) for crude oil in the Ebenyi-A Well in Obi Local Government Area of Nasarawa State.
Speaking at the event on Tuesday, the Group Chief Executive Officer, NNPCL, Mele Kyari stated that the new drilling rig at the Ebenyi-A Well site will increase Nigeria’s oil output to about three million barrels per day.
In November 2022, the national oil company inaugurated the Kolmani oil well located between Bauchi and Gombe states to also improve the nation’s oil reserves, Investors King recalls.
Kyari noted that the Ebenyi-A Well will greatly aid the NNPCL in attaining its 50 million barrels oil reserves target.
He spoke on the collaboration between NNPC Limited and Nigeria Upstream Petroleum Regulatory Commission (NURPC) for better oil exploration activities through the use of technology for the nation’s frontier basins which cuts across the Chad Basin, Upper and Lower Benue troughs, Bida Basin, the Sokoto Basin, Dahomey, Anambra platform, Calabar embankment and the Ultra deep water Niger Delta.
Kyari disclosed that the directive of President Muhammadu Buhari on the mobilisation for re-entry into the Chad Basin had been enacted and the entry had begun.
Buhari, who addressed the attendees virtually said the Ebenyi-A Well of the Middle Benue Trough will further aid the exploration of crude and gas in the frontier basins across Nigeria.
He commended the efforts of the NNPCL and support of the government and people of Nasarawa State towards the success of the oil exploration
His words, “Today’s occasion marks the official commencement of exploration drilling activities in the Middle Benue Trough. This is consistent with the commercial discoveries of hydrocarbons in the Kolmani Area of the Upper Benue Trough.
“I am pleased to note that activities are currently ongoing to develop the Kolmani petroleum discoveries to commercial production to add to the nation’s considerable hydrocarbon assets.
“The consequent positive outcomes of these drilling campaigns will lead to greater prosperity for our people and especially enhance overall energy security for our country.”
Oil Prices Rise Amid Supply Disruption and Optimism in Banking Sector
Crude oil prices continued their upward trend on Tuesday following significant gains recorded the previous day.
The increase was driven by concerns over supply disruption in Iraqi Kurdistan, as well as hopes that turmoil in the banking sector is being contained.
Brent crude oil, against which Nigerian oil is priced, rose by 0.4% to $78.44 a barrel while the West Texas Intermediate U.S. crude oil was up 0.4% to $73.07 per barrel.
These gains were recorded after prices surged more than $3 on Monday, largely because of the reports that Iraq halted exports of about 450,000 barrels per day from its northern Kurdistan region through Turkey.
According to Barclays, the Iraqis issue could last unit the end of the year. The bank, therefore, revised upward its prediction by $3 to $92 a barrel for Brent for 2023.
The announcement that First Citizens BancShares Inc will acquire deposits and loans of Silicon Valley Bank also contributed to the positive sentiment, sending European bank shares higher.
However, PVM Oil analyst Tamas Varga warned that concerns about financial stability could still trigger a flight out of risk, saying, “At the moment, concerns about the risk to financial stability have been relegated to the back of investors’ minds, but another bank run could trigger a flight out of risk again.”
China’s crude oil imports are expected to rise by 6.2% in 2023 to 540 million tonnes, according to a forecast by a research unit of China National Petroleum Corp. This is expected to further support oil prices, as is Russia’s focus on boosting energy exports to friendly countries.
Meanwhile, U.S. crude oil stockpiles were seen rising by about 200,000 barrels last week, according to a preliminary Reuters poll. The American Petroleum Institute will publish its inventory data later on Tuesday, followed by the U.S. Energy Information Administration on Wednesday.
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