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Agip Records 2,418 Oil Spills

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Agip Oil Company
  • Agip Records 2,418 Oil Spills

The Ministry of Petroleum Resources on Thursday said 2, 418 oil spills were recorded in Nigerian Agip Oil Company’s operations between 2010 and 2016.

The Director, Petroleum Resources in the ministry, Mr Mordecai Ladan, made this known at the public hearing on “Despoliation of the Niger Delta and Activities of Nigeria Agip Oil Company” by the House of Representatives in Abuja.

Giving details of the incidents, Ladan said 10 spills each were recorded in 2010 and 2011; 2012, 575 spills; 2014, 788 spills; 2015, 498 spills and 332 in 2016.

He said, “Most of the spills in 2012 to 2016 are attributed to sabotage due to the agitations in Niger Delta and given that the locations of most NAOC’s operational areas are on land and swamp.”

Ladan, who was represented by Dr Musa Zagi, an Assistant Director, said that the department was researching into the environmental impact of the continued discharges from various terminals.

He added that several aspects of the study had commenced.

He said, “The outcome of the study will determine the magnitude of impact on the Brass canal caused by NAOC’s operations and the appropriate remediation options to adopt.

“The department has also designed a special sanction regime for companies and facilities that persist in the prohibited discharges.

“This Progressive Discharge Deterrent Charge shall be imposed on NAOC with your approval, to serve as a deterrent to further project delays and incentivise the company towards compliance.”

Agip in a document submitted to the committee and signed by General Manager (District), Mr Paolo Carrievale, said that the pipeline where the incidents occurred was vandalised by suspected oil thieves.

He said that the suspected vandals illegally installed a valve on the pipeline for the purpose of stealing oil.

Carrievale further stated that a joint inspection visit conducted by the National Oil Spill Detection and Response Agency and the Bayelsa Ministry of Environment established that the spill on the section of the pipeline was caused by third party interference.

Speaker of the house, Mr. Yakubu Dogara, in his speech, condemned the activities of economic saboteurs in the oil producing communities across the Niger Delta.

He expressed regrets over the death of 14 people in Azuzuama community in Bayelsa as result of the spills.

The speaker, who was represented by Rep. Chukwuma Onyema, Deputy Minority Leader, reiterated Federal Government’s commitment towards promotion of citizens’ participation in law-making process and governance.

According to him, the Joint Task Force was set up by the Federal Government as a stop gap to check breakdown of law and order in the Niger Delta due to militancy.

Dogara said that illegal refineries were spill-over of the activities of militancy in the Niger Delta allegedly due to joblessness, poverty and hunger.

He added that the illegal refineries thrived on illegal oil bunkering, stolen crude oil, and vandalism of oil pipelines and other installations.

He said, “Without a doubt, these illegal oil operations are reprehensible and should not be condoned for a number of reasons.

“Firstly, it is improper for citizens to destroy oil installations in their bid to steal crude oil as feedstock for illegal refineries.

“Secondly, it is most inappropriate for anybody, Nigerians or foreigners, to steal crude oil belonging to the Nigerian State with impunity.

“Thirdly, there are serious environmental issues involved, regardless of whether they dump the residue from the crude oil distillation process into the river or simply incinerate it.”

The Chairman, Ad hoc Committee on Joint Task Force in Niger Delta, Rep. Nasiru Garo, said that as part of the activities of the committee, members conducted on-the-spot assessment of the affected Niger Delta parts between Sept. 25 and Sept. 28, 2015.

He said, “This visit afforded the committee first-hand information on the extent of environmental degradation of the Niger Delta due to activities of illegal refineries operators and oil spillages.

“The committee also visited NAOC facility to assess the integrity of their equipment as mandated.”

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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Nigeria’s Oil Sector Sees $16.6bn Investment Boost, Plans $20bn Expansion

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Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, announced on Monday that approximately $16.6 billion in investments have been committed over the past year.

This significant influx of capital marks a period of rejuvenation for the oil sector following years of stagnation caused by policy inconsistencies and the delayed passage of the Petroleum Industry Act.

Lokpobiri shared these updates during a briefing in Abuja, where he highlighted the achievements in the oil sector since President Bola Tinubu assumed office on May 29, 2023.

The minister emphasized that the government’s efforts to create a more investment-friendly environment have paid off, attracting substantial foreign and domestic investments.

Rekindling Investor Confidence

“One of our main objectives has been to create an environment where investments can thrive,” Lokpobiri stated. “Today, I am pleased to announce that our efforts have rekindled investor confidence in the sector.”

He pointed to notable investments, including $5 billion and $10 billion commitments in deepwater offshore assets, and a $1.6 billion investment in oil and gas asset acquisition.

The surge in investments is attributed to a series of roadshows in the United States and Europe, which successfully showcased Nigeria’s potential and the government’s commitment to sectoral reforms.

This renewed global interest is also evident in the ongoing bid rounds for new assets.

Production Increase and Strategic Initiatives

A significant achievement since President Tinubu took office is the increase in crude oil production.

“When we took office, production was at approximately 1.1 million barrels per day, including condensates,” Lokpobiri reported. “Today, I am proud to report that we have increased our production to approximately 1.7 million barrels per day, inclusive of condensates.”

To achieve this increase, the government has undertaken several strategic initiatives.

These include revamping redundant oil assets, continuous engagement with international oil companies, and resolving industry disputes.

Efforts to protect critical assets and reduce oil theft have also been intensified, with collaborations between private security firms and government agencies leading to a sharp decline in crude oil theft.

Upcoming $20bn Expansion Deal

In addition to the recent investments, Lokpobiri revealed that the Federal Government is on the verge of finalizing a $20 billion deal aimed at further boosting oil and gas production.

During a meeting with Olivier Le Peuch, CEO of Schlumberger Limited, Lokpobiri disclosed that negotiations with major investors are nearing completion. “Investments of over $20 billion are coming. One company alone will invest $10 billion,” he noted.

This deal, once consummated, will represent one of the largest single investments in Nigeria’s oil sector in recent history, promising to significantly enhance the country’s production capacity and economic growth.

Ongoing and Future Projects

Lokpobiri also highlighted the commencement of production from Oil Mining Leases (OMLs) 13 and 85, managed by Sterling Exploration and First E&P respectively.

These projects are expected to produce an average of 20,000 and 40,000 barrels per day, further bolstering Nigeria’s output.

This period of renewed investment and increased production is a testament to the government’s commitment to optimizing the nation’s oil and gas assets.

President Tinubu’s administration aims to sustain this momentum, ensuring continued growth and stability in the sector.

Government Transparency and Accountability

In line with President Tinubu’s directive for transparency, all ministers have been tasked with presenting their performance reports to the public.

The Minister of Information and National Orientation, Mohammed Idris, announced that the first-anniversary celebrations will include sectoral media briefings by the 47 federal ministers, starting on Thursday.

These briefings are designed to keep Nigerians informed about the government’s achievements and ongoing initiatives.

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Oil Prices Stable Amid Federal Reserve’s Talk of Interest Rate Tightening

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In a landscape where global oil markets often sway with the slightest economic shifts, stability can be a rare commodity.

However, amidst discussions from the U.S. Federal Reserve regarding potential interest rate adjustments, oil prices have remained surprisingly steady.

Brent crude oil, against which Nigerian oil is priced, gained 10 cents, or 0.1% rise to $82.00 a barrel, while U.S. West Texas Intermediate (WTI) crude oil edged up 7 cents to $77.64 a barrel.

The Federal Reserve’s release of minutes from its recent policy meeting unveiled deliberations on the possibility of raising interest rates to combat persistent inflationary pressures.

The minutes stated, “Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”

Such discussions surrounding interest rates can have a profound impact on oil demand. Higher interest rates typically result in increased borrowing costs, potentially constraining funds that could otherwise stimulate economic growth and, consequently, oil consumption—particularly in the United States, the world’s largest oil-consuming nation.

Additionally, the Energy Information Administration’s report indicating a 1.8 million barrel rise in U.S. crude stocks last week, as opposed to an anticipated draw of 2.5 million barrels, added a layer of complexity to the market dynamics.

This unexpected increase in inventory weighed on market sentiment, despite ongoing efforts to balance supply and demand.

Furthermore, global physical crude markets have been grappling with subdued refinery demand and abundant supply, exacerbating the pressure on oil prices.

Analysts from Citi highlighted recent market softness, attributing it to weaker data encompassing rising oil inventories, tepid demand, and refinery margin weakness, compounded by the looming risk of production cuts.

Russia’s announcement that it surpassed its OPEC+ production quota in April due to “technical reasons” added another dimension to the market narrative.

The Russian Energy Ministry revealed plans to present a compensation strategy to the Organization of the Petroleum Exporting Countries (OPEC) Secretariat shortly.

Against this backdrop, anticipation mounts ahead of the OPEC+ meeting scheduled for June 1, where crucial decisions regarding production cut levels will be deliberated.

Despite uncertainties surrounding the meeting’s outcome, industry experts foresee challenges in significantly tightening the market in the near term, potentially leading to a rollover of existing voluntary cuts.

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Electricity Subsidy Surges to N628.61bn in 2023, Discos Earn N1.08tn

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Amidst ongoing debates regarding Nigeria’s power sector and the financial dynamics surrounding it, the latest data from the Nigerian Electricity Regulatory Commission (NERC) has revealed significant figures concerning electricity subsidy and the earnings of power distribution companies (Discos).

According to the data obtained from NERC, the Federal Government’s expenditure on electricity subsidy soared to a staggering N628.61 billion in 2023.

This substantial subsidy expenditure indicates the government’s continued financial support to ensure electricity affordability for consumers across the nation.

Simultaneously, power distribution companies amassed a total revenue of N1.08 trillion during the same period.

This substantial revenue underscores the financial capacity of the Discos despite ongoing challenges within the power sector, including issues related to infrastructure, metering, and service delivery.

Analysis of the figures provided by NERC reveals a consistent increase in electricity subsidies throughout 2023.

In the first, second, third, and fourth quarters of the year, subsidies on power amounted to N36.02 billion, N135.23 billion, N204.6 billion, and N252.76 billion, respectively.

This steady rise in subsidy expenditure reflects the government’s commitment to bridging the gap between the cost-reflective tariff and the allowed tariff.

Conversely, power distribution companies witnessed notable revenue growth over the same period.

Despite concerns raised by consumers regarding service quality and reliability, Discos reported earnings of N247.09 billion, N267.86 billion, N267.61 billion, and N294.95 billion in the first, second, third, and fourth quarters of 2023, respectively.

This substantial revenue generation highlights the financial viability of the Discos within the current regulatory framework.

The surge in revenue by Discos has prompted calls from various stakeholders for improved service delivery and accountability within the power sector.

Consumers have expressed dissatisfaction with the quality of service provided by Discos, emphasizing the need for enhanced operational efficiency and infrastructure investment to address prevailing challenges.

In the absence of cost-reflective tariffs, the Federal Government continues to bear the burden of electricity subsidies to ensure affordability for consumers.

These subsidies primarily target power generation costs payable by Discos to the Nigerian Bulk Electricity Trading company, thereby supporting electricity generation and supply across the country.

Commenting on the subsidy expenditure for the fourth quarter of 2023, NERC highlighted the government’s policy to harmonize exchange rates and maintain end-user customer tariffs at approved rates.

This policy direction contributed to the increase in subsidy obligations, reflecting the government’s efforts to stabilize electricity prices amidst economic uncertainties.

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