- Kachikwu Continues Oil Investment Overtures, Woos ExxonMobil on Local Refining
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has continued his drive to have International Oil Companies (IOCs) operating in Nigeria deepen their investments in the country with a visit to United States oil firm, ExxonMobil.
The minister according to a statement from the ministry yesterday in Abuja, met with top executives of ExxonMobil at its headquarters in Irving Texas, where he requested that they consider investing in refining of petroleum products in Nigeria.
Kachikwu, said ExxonMobil has had an enduring partnership with Nigeria, and should deepen its commitment to develop the country’s oil and gas industry, especially in domestic refining of petroleum products.
He reiterated the commitment of the federal government to reduce importation of refined petroleum products into the country, adding that this would be improved on if major IOCs operating in Nigeria invest in building signature refineries to be run on joint venture basis with the government.
According to him, the government would also provide the necessary incentives to accomplish this.
While reiterating the gains that have been made in the sector through the signing of the repayment agreement for the Joint Venture (JV) cash call in 2016, Kachikwu further clarified that the initial payments to the IOCs would be made by the end of April 2017.
He noted that it would be expedient the IOCs reciprocate the government’s gesture and commitment to paying off the cash call debts by ensuring that they ramp up investments in the country’s oil sector.
Kachikwu, equally encouraged ExxonMobil to invest in more practical deliveries in human capital development and local skills sets required in the oil sector.
The statement noted that ExxonMobil in response, recognised the valued partnership it has with Nigeria, as well as Kachikwu’s efforts to further develop the oil sector.
ExxonMobil also reiterated its commitment to help deliver power to Nigeria and support the country’s gas commercialisation programme.
According to the ministry, the meeting is part of Kachikwu’s ongoing investment drive to get IOCs further commit to developing Nigeria’s oil sector. The first of such was with Italian oil firm, Eni in January 2017, where Eni pledged to work with Nigeria to revamp the Port Harcourt Refinery.
It explained that the minister would also visit Shell, Chevron and Total, and then lead Nigeria’s delegation to the upcoming Offshore Technology Conference (OTC) in Houston, with the intention of persuading more investors to invest in Nigeria’s oil industry.
Also, some media had recently reported that Kachikwu would be at the May OTC to showcase Nigeria’s soon-to-be launched marginal oil fields bid rounds.
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
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.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
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.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
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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