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Opportunities in Oil Sector’ll be Over Soon — Osinbajo

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Vice President Yemi Osinbajo
  • Opportunities in Oil Sector’ll be Over Soon

Vice President Yemi Osinbajo on Monday stated that opportunities in the petroleum industry were narrowing and might be over sooner than expected as a result of the increasing breakthroughs in renewable energy use as well as the expansion in the patronage of electric vehicles globally.

According to him, although Nigeria needs oil as it works towards diversifying its economy, the party may soon be over in the petroleum industry.

Speaking as a special guest at the presentation of three books written by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja, the vice president explained that it was becoming increasingly important for the country to diversify its economy.

Osinbajo said, “As we move to diversify our economy, we are particularly aware that we need oil to get out of oil, yet our window of opportunity to benefit maximally from the petroleum industry is narrowing.

“The development of shale oil, which the author spent considerable time on, the increasing breakthroughs in renewable energy use, the speed of expansion in the use of electric vehicles –Japan now has more electric charging stations than gas stations – all point to the fact that the party may be over sooner than we expected.”

He stated that the minister had delivered what could be described as probably the most significant contributions to help understand the country’s petroleum sector.

Osinbajo said, “You will not find the insights that Kachikwu offers in the chapters on marketing and transportation of petroleum products, divestment, negative trend in the Nigerian petroleum industry and ministerial discretion in any textbook or policy manual on the subject.

“Kachikwu clearly took full advantage of the mere convergence of scholarship, contemporary experience and policy wisdom to deliver what are probably today the most significant contributions to our understanding of the major issues of the Nigerian petroleum industry.”

The three books unveiled at the event were ‘Compendium of Oil and Gas Cases in Nigeria’, ‘Legal Issues in the Nigerian Petroleum Industry’, and ‘The Petroleum Industry Bill: Getting to the Yes’.

Kachikwu told journalists that although the contents of the books were his professional and privileged thoughts, it would be helpful if the federal and state governments, the National Assembly and stakeholders in the industry took the issues raised into consideration.

He said, “Obviously, we looked at the historical issues of the PIB as well as the current ones. A lot of what have been done were captured, and also a lot of those things that they’ve not done in the fiscal areas were captured too, because the fiscal area is key. But there is a lot of room for thoughts and the objective of getting to yes with the PIB is to get to yes.

“The book on the PIB looked at what are the challenging issues that have stopped the bill from being passed, what is the politics in it, and also stepping away from the politics, it looked at the core critical areas that are essential if we want to succeed in it. So, there’s going to be a lot of room for dialogue with the National Assembly.

“What I’ve provided are my thoughts and are guiding thoughts, which I think can help in moving the industry forward. I wrote as a Nigerian privileged to have some of the information and access to data that I have and I think that a lot of the things I say, if taken into consideration by the government, will help solve a lot of problems.”

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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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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