Markets

NPA: 25 Years Ports Devt Master Plan Underway

Published

8 years ago

November 7, 2016

NPA: 25 Years Ports Devt Master Plan Underway

In a bid to ensure a healthy competition among existing ports and the ongoing Lekki Deep Sea Port and Badagry Deep Sea Ports, the Nigerian Ports Authority (NPA) is developing a ports master plan to be unveiled in the next six months.

Managing Director of NPA, Ms. Hadiza Bala Usman disclosed this in her speech at the World Maritime Day Celebration held in Lagos.

Bala Usman noted that the existing model where port development was not well thought out will see the ports compete each other out of business; a situation she said would be bad for the industry.

She said: “One of the important things that I have felt the need to institute is the port development master plan, a 25 years master plan, which will guide the development of ports I the country. We have commenced that activity at the NPA. I met on ground a development master plan for individual port in the NPA but I felt the need to have a holistic master plan which guides all such port development. That way we will not have over laps and have ports that will be competing with each other and compete each other out of business.

She added: “We need to have a clear plan and structure with which port development plan s are approved. We have the Lekki Deep Sea Port approval currently going on in Lagos state, we have the Badagry Deep Sea Port and we have Tincan and Apapa ports. We need to have the respective scope with which these ports will operate to ensure that capacity utilisation in terms of capacity is addressed as we approve such port development. So having a master plan, a clear vision of port development is critical and the NPA is leading that. Within the next six months we will come out with a port development master plan which we will unveil to stakeholders before we get the necessary approval.”

On port capacity utilisation and its current capacity, she said: “I think what we need to understand is that as we approve and as we present respective port development, we need to understand and assess what we have now on capacity utilisation. Has it been utilised fully? We need to look at clusters of port development to determine the competition as we approve them. We have to determine if indeed what we have would be able to accommodate the need for expansion and traffic to come into the country.

“We have noted the period were the deployment has been made and we have identified need to build on the existing infrastructure. Right now we have commissioned our staff to go around all of our ports to determine the level of decay of our infrastructure. Primarily, I have given the clear directive that all our budgetary provisions will be tied to infrastructure that will add revenue to the Nigerian Ports Authority. Indeed our focus is to see that our degenerated infrastructure is built upon and expanded to take on need for the Nigerian port to have expansive capacity to take on additional traffic.”

Speaking on the plan to review port concession agreement, she said as someone who worked at the Bureau of Public Enterprise (BPE), she understands the need for private sector to lead in the investment and development of the ports in the country.

“I met on ground concessions that have been 10 years in operation and I believe that it is time for us to have a review. The concessionnaires themselves believe that it is time to look at some of its terms. The economic situation in which some of the concession agreements were entered into are not the same today. There are clear assumptions that were made within those initial concessions that are different now. There are also respective obligation across both parties that have not been met within the 10 years has not been met. I think it’s time for both parties to seat around the tale and review those terms to determine what obtains today.

“We have noted the operators have development plans that they have not adhere to during the concession period, we have noted that the authority itself has not committed to some of the obligations that were stipulated in the concession. As we go through the review of the concession, both parties need to confirm and commit to their part of the agreements. We will ensure sanctions and penalties for not compliance across the board, both the authorities and the operators, going forward we will ensure that there is a level playing field for all operators.

“Within the concession agreement, everyone can confirm that there was need for a review within two years but we have waited 10 years for a holistic review of the concession agreement. We have also noted the few review in view of tenor elongations without a commensurate review of the financing model, which are tied to each other. Whatever timelines you have for the revision period is tied to the financing model and a tariff regime which is contained within the concession agreement, “he said.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

Published

3 days ago

May 16, 2024

Samed Olukoya

The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

Crude Oil

Oil Prices Hold Steady as U.S. Demand Signals Strengthening

Published

3 days ago

May 16, 2024

Samed Olukoya

Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

Crude Oil

Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

Published

3 days ago

May 16, 2024

Samed Olukoya

Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.