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India Wants to Lift More Oil From Nigeria

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  • India Wants to Lift More Oil From Nigeria

Indian state-run refiners are pressing for an increase in crude oil allocations from Nigeria as demand from the South Asian country climbs, an official from the Nigerian National Petroleum Corporation has said.

The request comes just before Nigeria’s crude oil term lifting contracts for 2017 are finalised, which will be decided by mid-December.

India as the largest buyer of Nigerian crude has always said it should have a longer-term arrangement with the NNPC to ensure security of supply.

“Three Indian companies said that they were looking for a combined total of 11 million metric tonnes [in 2017] from nine million mt [this year],” the Group Executive Director, Refineries, NNPC, Anibor Kragha, told S&P Global Platts in an interview on the sidelines of the Petrotech conference in New Delhi on Monday.

“Now what they will get is a balance between term contracts and [spot] sales contracts,” he added.

At least seven barrels of crude make one metric tonne.

The Nigerian crude oil term contracts involve the export of around 1.17 million bpd of Nigerian crude, out of the 2.2 million bpd the country can theoretically produce. They are then sold by contract holders to end-users, refiners and other buyers.

But with Nigerian oil output sharply down due to renewed militancy, the term volumes could be much lower for 2017 if output does not rebound.

Nigerian oil output had recovered sharply after it fell to a 30-year low in early summer but renewed attacks on oil infrastructure in the Niger Delta have shut in production of popular export grade Forcados in the past month.

Total oil/condensate production was around 1.9 million bpd, including 300,000 bpd of condensates, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said last week.

He said output could reach 2.2 million bpd if the militancy issues were resolved by early next year.

Kragha said that negotiations were ongoing and that he was not sure if the deal would materialise but added that once the Nigerian output recovers, it would “increasingly look towards India” as the major buyer of its crude.

“Indian demand is very positive for us. A vibrant Indian economy is good for us,” he said.

The two countries have been working on a Memorandum of Understanding in the past month to enable the participation of Indian companies in Nigeria’s upstream and downstream oil and gas sector.

The deal being negotiated by Nigeria will also have the Indian government make an upfront payment for the purchase of Nigeria’s crude on a long-term basis as well as Indian public sector companies investing in Nigerian refineries.

Kachikwu recently said the country had negotiated a $15bn investment with India, where the Indian government would make an upfront payment to Nigeria for crude oil purchases.

Indian state-owned refiners tend to buy most of their crude on term contracts while their remaining requirements are sought via tenders.

“We just came out of a meeting with key Indian oil companies and they are pushing to get incremental allocations for the term contracts. We explained to them that there needs to be a balance,” said Kragha.

India is a significant buyer of Nigerian crude, which is largely light and sweet, rich in petrol and diesel and low in sulphur, and meets the needs of Indian refiners.

State-owned refiners such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited are major regular buyers of Nigerian crude types like Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami.

A source from an Indian refiner told Platts that Nigerian crude had become a must for most of its refineries, especially the older ones, which had been designed to run light sweet crudes.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude; but we want them to supply us with more,” he said.

India, which is currently among the world’s fastest growing economies, has seen its petrol and diesel demand climb sharply over the past few years. This has encouraged Indian refineries to buy more Nigerian crudes.

In 2015-2016, India imported nearly 23.7 million mt of Nigerian crude, nearly 12 per cent of India’s overall oil imports, according to official Indian data.

The South Asian country also imports some two million mt/year of liquefied natural gas from Nigeria.

Every month, almost 20-25 per cent of total Nigerian crude exports travel to India, particularly to the IOC, which is the main recipient of Nigerian crude.

Indian refiners such as the IOC, HPCL and BPCL are currently on crude oil term lifting contracts for 2016 with the NNPC.

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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Portland Paints, Chemical and Allied Products Plc Agreed to Merge

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Portland Paints, Chemical and Allied Products Plc Agreed to Merge

Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.

In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).

Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.

“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.

“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”

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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.

The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.

It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.

The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.

A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.

In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.

“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.

Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.

“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.

“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”

Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.

Also, read Transcorp Plc Acquires FGN’s 100% Equity in Afam Power for N105 Billion

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Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

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Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.

Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.

Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.

He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.

“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.

According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.

After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.

The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.

Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.

Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.

“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”

He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.

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