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Oil Marketers Want Preferential FX Rate

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Oil
  • Oil Marketers Want Preferential FX Rate

Despite the preferential foreign exchange rate given to oil marketing firms by the international oil companies (IOCs), aimed at sustaining the importation of petrol into the country, the Major Oil Marketers Association of Nigeria (MOMAN) has decried the non-allocation of the same preferential FX rate for the importation of aviation fuel.

MOMAN has equally condemned the multiple levies, taxes, fees and charges on imported products by agencies of the same or different tiers of government, and urged the federal government to summon the courage to halt the annual fuel crisis during the yuletide season by empowering marketers and importers with the required FX to stockpile products ahead of the Christmas and New Year festivities.

In a communiqué issued yesterday by the committee of chief executives of Forte Oil Plc, Mobil Oil Nigeria Plc, Total Nigeria Plc, Oando Plc, Conoil Plc and MRS, the marketers stated that the cost of petrol at the international market had soared to $548 per tonne and called on the federal government to ensure that the dollar/naira parity should stay at a level that would sustain the sale of petrol at the open market price band of N135-N145 per litre.

Owing to the scarcity of FX, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, a few months ago, negotiated a deal with the IOCs that prioritised oil marketers and allows the oil multinationals to sell FX directly to their downstream counterparts at a preferential rate in order to maintain the peg on the price of petrol at N145 per litre.

In the communiqué, the major oil marketing companies yesterday acknowledged what they described as the serenity in the supply of petrol in the country and extended their appreciation to the Ministry of Petroleum Resources, the NNPC and all other stakeholders.

“We note that there are some few glitches here and there and we call on the regulatory agencies to face these challenges with a view to nipping all nefarious activities associated with supply and distribution in the bud.

“Unknown to the general public, the private sector has depended on foreign exchange supplied into the system by the IOCs (international oil companies) through the intervention of the Hon. Minister of State Petroleum Resources.

“In order for the private sector to continue to play its role in the importation of PMS (petrol), the dollar/naira parity should stay at a level that will ensure that the open market price band of N135-N145 is maintained. This is especially so because the CIF price of petrol is rising in the international market. Today it is approximately $548 per tonne,” the CEOs explained.

They applauded the effort of the petroleum minister, but drew the attention of government to the product situation during the winter months, which coincide with reduced output of petrol in refineries abroad and increased activities of motorists in Nigeria as a result of the dry season and festive period.

In this regard, the oil marketers urged the government to summon the required courage to halt the annual ritual of product outages during the yuletide season.

According to MOMAN, the federal government should empower marketers and importers with the required FX to stock pile products in the country well ahead of the Christmas and New Year festivities.

The association also blamed the intermittent tightness in the supply of aviation fuel to the airlines, to the non-allocation of FX for the importation of jet fuel.

This situation has defeated the government’s intention of making Nigeria the aviation hub of the sub-region, they said.

On the issue of multiple taxes, the marketers noted that the government has the right to apply legitimate taxes, levies, fees and charges on goods and services.

The companies, however, condemned a situation where two agencies of the same state government apply the same law to charge different taxes or the states and federal governments are charging the same taxes on the same goods and services, and described the multiple taxes and levies as a disincentive to business.

The communiqué, which was signed by the Executive Secretary of MOMAN, Mr. Obafemi Olawore, also urged all tiers of government to review their tax policies and apply a single tax regime for the same service provided.

The committee of CEOs also lamented the deplorable condition of roads and charged the government to quickly fix the roads which have become traps leading to the loss of lives and property.

“We wish to draw the attention of stakeholders and regulators to safety regulations especially in the gross tonnage of tankers and the ability of the road to absorb the weight of loaded tankers.

“We also wish to appeal to the government to reduce the import duty on these haulage trucks to enable transporters meet the new replenishment policy which forbids the engagement of old or used trucks.

“The safety implications of not replenishing an aging truck fleet cannot be over-emphasised,” said the oil firms.

The oil marketing firms also called on the relevant agencies of government to review, monitor and enforce set standards in line with international best practices in the standardisation of trucks, retail outlets and products specifications.

Egina to Add 200,000bpd by 2018

In a related development, NNPC yesterday projected that Nigeria’s crude oil production was expected to increase by 200,000 barrels per day (bpd) by the first quarter of 2018.

This, according to the state-run oil firm, would be made possible with the commissioning of the Umbilical Flow-lines and Risers (UFR) for the Egina Deep Offshore Project.

Speaking during the load-out ceremony of the UFR for the Egina project by Saipem Contracting Nigeria Limited in Port Harcourt, Rivers State, the Group Managing Director of the NNPC, Mr. Maikanti Baru, also restated the commitment of the corporation to the development of local content in the oil and gas industry.

A statement by NNPC said Baru disclosed that the module would guarantee the drilling of the first oil from the 200,000bpd Egina field by the first quarter of 2018.

He commended Saipem for the successful completion of the Egina UFR project, including the engineering, procurement, construction, installation and pre-commissioning of 52 kilometres (km) of oil production and water injection flow-lines; 12 flexible jumpers; 2km of an oil export line; 20km of gas export pipelines alongside the installation; and commissioning of 80 kilometres of steel tube umbilical and mooring of the FPSO and offshore loading terminal. (OLT).

He said: “What is being celebrated is the efficacy of the Nigerian Content Act and the NNPC is strongly committed to the successful implementation of all provisions of the Act.”

Also speaking, the Managing Director of Total, Nicholar Terahz, said the Egina project was the largest contributor to the development of the Nigerian content in the oil industry, being the largest offshore project currently going on in the country.

He noted that the employment opportunities and technology transfer the project generated contributed significantly to the nation’s economy.
In his remarks, the Managing Director of Saipem, Guido D’Aloisio, said the performance of Nigerian engineers on the project was commendable, adding that the country would be proud of it.

The Executive Secretary, Nigerian Content Development and Monitoring Board, Simbi Wabote, who was represented by the board’s Director, Planning, Research & Statistics, Daziba Patrick Obah, said that the quality of jobs done on the project by Nigerians and the gains thereof would further deepen Nigerian content in the oil industry.

Discovered in 2003, the Egina field is located at some 20km from the Akpo field within Oil Mining Lease (OML) 130 and is situated in a water depth of 1,750m.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Goldman Sachs Revised Down Brent Oil Forecast for Q3 2021

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Brent crude oil - Investors King

Goldman Sachs Group, an American multinational investment bank and financial services company, has revised down its Brent oil price projection for the third quarter (Q3) of 2021 by $5 from $80 per barrel previously predicted to $75 a barrel following the surge in Delta variant COVID-19.

The investment bank predicted that the surge in Delta variant COVID-19 cases will weigh on Brent oil price in Q3 2021 even with the expected increase in demand.

However, the bank projected a stronger second half of 2021, saying OPEC+ adopted slower production ramp-up will offset 1 million barrel per day demand hit from Delta.

Goldman said, “Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up.”

The leading investment banks now projected a deficit of 1.5 million barrels per day in the third quarter, down from 1.9 million barrels per day previously predicted.

Therefore, Brent crude oil is expected to average $80 per barrel in the fourth quarter, a $5 increase from the $75 initially predicted and the bank sees 1.7 million barrels per day in the fourth quarter.

The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.

Goldman added that even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices.

Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.

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Crude Oil

Oil Extends Gains on Thursday on Expectations of Tighter Supplies

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Crude Oil - Investors King

Oil prices rose about $1.50 a barrel on Thursday, extending gains made in the previous three sessions on expectations of tighter supplies through 2021 as economies recover from the coronavirus crisis.

Brent crude settled at $73.79 a barrel, up $1.56, or 2.2%, while U.S. West Texas Intermediate (WTI) settled at $71.91 a barrel, rising $1.61, or 2.3%.

“The death of demand was greatly exaggerated,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Demand is not going away, so we’re back looking at a very tight market.”

Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed this week on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.

But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021.

“In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive,” it said.

Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.

Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed.

Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week.

“Supplies fell further by 1.3 million barrels to the lowest level since early last year, theoretically offering support to the WTI curve,” said Jim Ritterbusch of Ritterbusch and Associates.

Gasoline and diesel demand, according to EIA figures, also jumped last week.

Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.

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Energy

RES4Africa, Enel Green Power and the European Investment Bank Encourage African Youth to Find Green Energy Solutions to Community Challenges

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European Investment Bank - Investors King

The second Micro-Grid Academy Young Talent of the Year Award today acknowledged energy innovation from across Africa that can accelerate the green transition and improve economic opportunities.

Backed by the RES4Africa Foundation, Enel Green Power and the European Investment Bank the yearly competition encourages young energy entrepreneurs from across the continent to develop projects that expand enegy access, enable greater use of renewable eneryg and accelerate sustainability.

Young finalists from across West, East and Southern Africa presented their innovative ideas to expert judges from the RES4Africa Foundation, Enel Green Power and the European Investment Bank.

The 2021 edition of the Micro-Grid Academy Young Talent of the Year Award has arrived to its final steps. Today, the eight young African innovators selected as finalists out of nearly 50 applicants presented to the international public their disruptive projects for the first time. The presentation took place during the event Public Competition for the MGA Young Talent of the Year 2021 finalists, and represents a preparatory step for the announcement of the three winners, that will be held the 28th of September in the framework of the Precop26.

The three entities strongly believe that renewables and innovation will be the response to the climate changes and energy deficit that Africa faces. In this deeply needed path towards its just energy transition, the continent can and must rely on one of its most precious resources : its youth. With this joint initiative, RES4Africa, Enel Green Power and the European Investment Bank put together their efforts to support those young people from all Africa countries who are committed and motivate to create a real change in their communities.

These are the finalists identified by the selection committee, who publicly presented their project ideas and among which there are the three future winners:

• Adekoyejo Ifeoluwapo Kuye, 26 years old from Nigeria, introduced a project focused on a sustainable cold chain for food;

• Alex Makalliwa, 31 from Kenya, presented his initiative of electrical tricycles for heavy loads in Nairobi;

• Benson Kibiti, 34 also from Kenya, performed an overview on an PV-powered trolley for heating up food and providing power;

• Lucas Filipe Tamele Junior, 24 from Mozambique, focused on waste management, biofertilizers and biogas;

• Matjaka Ketsi from Lesotho is 28, and presented an initiative aiming at building solar-powered Learning Centres for rural communities;

• Shedrack Charles Mkwepu is instead 26 and comes from Tanzania: he designed a system that allows farmers to control irrigation and other soil parametres from a mobile phone;

• Carol Ofafa, 32 from Kenya, proposed the installation of a PV system for health facilities;

• Kumbuso Joshua Nyoni, 34 from Zambia, envision an integrated Water-Food-Energy model for PV power and a water pumping system.

The webinar benefitted from the presence of Salvatore Bernabei, President of RES4Africa and Head of Enel Global Power Generation, as well as of Maria Shaw Barragan, Director of Lending in Africa, Caribbean, Pacific, Asia and Latin America, European Investment Bank. They introduced the objectives of the MGA Young Talent of the Year Award, while reflecting upon youth’s impact on the just energy transition.

Moreover, after the finalists’ presentation, a final feedback was provided, with closing remarks, by Roberto Vigotti, Secretary General at RES4Africa Foundation, Carmelo Cocuzza, Head of Corporates Unit, European Investment Bank, and Silvia Piana, Head of Regulatory Affairs Africa, Asia and Australia Area at Enel Green Power.

“The ability to generate innovation will be a fundamental driver to pave the way for a transformation that goes well beyond the dynamic of the Energy sector” commented Salvatore Bernabei “We are here give voice and visibility to young talents, innovators, entrepreneurs promoting the best innovative ideas to stimulate socio-economic progress from within and free the creativity of the younger generations in designing the Africa of tomorrow”.

Increasing energy access and enabling more sustainable energy use is crucial to unlock opportunities for communities across Africa. The finalists in this year’s Micro-Grid Academy Young Talent Awards all demonstrate inspirational and innovative thinking that combined world-class energy expertise with unparalleled understanding of local energy needs and all deserve to win. The European Investment Bank is pleased to join RES4Africa and Enel Green Power to support talented young innovators and encourage them to become green energy leaders of the future.” said Maria Shaw-Barragan, European Investment Bank Director for Global Partners.

RES4Africa Foundation (Renewable Energy Solutions for Africa) envisions the sustainable transformation of Africa’s electricity systems to ensure reliable and affordable electricity access for all, enabling the continent to achieve its full, resilient, inclusive and sustainable development. The Foundation’s mission is to create favourable conditions for scaling up investments in clean energy technologies to accelerate the continent’s just energy transition and transformation.

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