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Vandalism: Oil Firms to Install Electronic Monitoring Devices

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Oil
  • Vandalism: Oil Firms to Install Electronic Monitoring Devices

Foreign and indigenous firms operating in the Nigerian oil and gas industry will have to install electronic surveillance gadgets on their facilities in a bid to curb the vandalism of oil installations across the country.

This was one of the highlights of conclusions at a two-day stakeholders’ consultation on the draft National Gas Policy and National Oil Policy, which ended in Abuja on Tuesday.

Giving an overview of the NOP, the Senior Technical Adviser on Upstream and Gas to the Minister of State for Petroleum Resources, Mr. Gbite Adeniji, stated that it was important for companies to start putting in place oil field security systems.

Adeniji, while explaining the difference between the draft NOP and the bill before the National Assembly, stated that the vandalism of pipelines had severely impacted the sector negatively.

The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikanti Baru, recently stated that the country had witnessed about 1,000 cases of pipeline vandalism since the beginning of this year, a development that he noted had dragged down crude oil.

The NNPC, in its latest financial and operations report, also stated that in July and August this year, the country recorded 311 and 221 cases of vandalism of oil pipelines, respectively.

Speaking on oil field security as contained in the draft NOP, Adeniji said, “Oil companies are to be charged with electronic surveillance. The time is overdue for Nigeria to build a digital oil field.”

He noted that in a few days’ time, the final policy document would be ready and when approved, the NOP would be binding on all players in the oil and gas sector.

He added that the NGP and NOP would be transparent and ensure that things were done properly.

Adeniji stated that the policy would also ensure that Nigeria gets a proper metering system that would eradicate oil theft in the industry.

He said the restructuring of the NNPC, as contained in the draft document, would guarantee the clarity required for the disbursements that must be made into the Federation Account, adding that it would avoid subsidies being constrained financially and stop overlapping roles with regulatory agencies.

Chairing the panel discussion, Tim Okon, an industry expert, stated that Nigeria should be moving away from crude oil production and export to production and processing.

Another panellist, Mr. Isa Baba, said the policy should support the deregulation of pipelines, stressing that the vandalism of oil installations was becoming alarming despite the ongoing negotiations between the government and agitators in the Niger Delta.

He said, “It is sad that vandalism is this much in Nigeria today. We should deregulate the pipelines and either make the security of the facilities the responsibility of host communities or some particular security outfits,” he said.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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