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Bristow Records Over 50% Drop in Operations

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  • Bristow Records Over 50% Drop in Operations

Leading helicopter service provider in the oil and gas sector, Bristow Helicopters Nigeria Limited, has hinted on over 50 per cent drop in operations due to the current economic downturn.

The development, though not unique to Bristow, has, however, warranted some drastic measures including the release of some workers and withdrawal of some aircraft from the Nigerian market.

Meanwhile, Bristow has acquired four brand new Sikorsky76D helicopters as part of its diversification and commitment to the Nigerian market.

Recall that the global oil and gas market has been in decline since the second half of 2014, with enormous effects on activities in the Nigerian oil and gas market. Helicopter operators, like Bristow, have been affected.

With reduced activities in the oil and gas sector, Bristow, like its competitors, has had to reduce its staff strength. In 2015, Bristow released 89 expatriate engineers and pilots, coupled with 26 support staff. As activity levels further dropped in 2016, the company released 29 expatriate engineers and pilots and 16 support staffs, coupled with 21 national pilots and engineers.

Managing Director of Bristow Helicopters in Nigeria, Capt. Akin Oni, told reporters that the lay-off was not unconnected with 50 per cent cut in fleet size, compared to what it operated in 2014/15.

Oni said: “In terms of flight activities, we are now about 45 per cent of what it was in 2014/15. That is the level of impact on us.”

He added that they had in the last one year shipped 13 aircraft out of Nigeria to other countries where their services are more required, given the impact of recession on helicopter services.

“Whilst the release of a staff is never an easy decision, the release of any national pilot or engineer is even more difficult. Most of our national engineers and pilots were recruited as cadets and received funding from the company for training.

“We very much view these national pilots and engineers as long term employees and future leaders of the company. It is, therefore, always a difficult decision to release our national staff,” he said.

On average, Bristow spends about $250,000 (cadet pilots) and $80,000 (cadet engineers) per annum on training its cadets until qualification as pilots or engineers.

The downturn in the sector and reduced activities notwithstanding, Oni said Bristow remains committed to operations in Nigeria, tapping into the bright side of fixed wing operations.

His words: “We have been operating in our present form since 1969 and intend to continue to operate in Nigeria. Our focus remains on providing a safe and efficient service throughout Nigeria.

“We are committed to developing new opportunities to serve the Nigerian market. Last year, we introduced a fixed wing business charter service operating the Lagos – Port Harcourt route for the benefit of our clients and other business corporations. This service is operated by two Embraer 135 aircraft.

“Last week, we expanded the service to include a Lagos–Abuja route, currently operating three days a week, as demanded by our clients. This service is an example of how we are able to diversify and provide a service outside our core oil and gas sector.”

In the oil and gas sector, Bristow has also introduced a search and rescue service, the first of its kind in Nigeria.

The MD explained that the service would be provided by a Leonardo AW139 with capabilities for both day and night rescue operations. The search and rescue service lends from the expertise and experience held by an affiliate UK company, Bristow Helicopters Limited, which provides a similar service to the United Kingdom.

Senior Legal Director at Bristow, Tolu Olubajo, noted that effective from April 1, 2016, parity in remuneration was established between their national and expatriate aircraft type-licensed pilots and aircraft maintenance engineers. This was sequel to an agreement reached with the National Association of Aircraft Pilots and Engineers (NAAPE) on the remuneration of their members.

Olubajo said that Bristow would continue to engage with NAAPE on compensation payable to the released national engineers and pilots, and remain open to an amicable dialogue to reach agreement on the matter.

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

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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.

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

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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.

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

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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.

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