- NNPC Vows to Fully Recover $103m, N11bn from Ontario, Aiteo and Televaras
The Nigerian National Petroleum Corporation, NNPC, has vowed to achieve full recovery of the outstanding crude swap under-deliveries from three companies, Aiteo Energy Resources, Televaras Group of Companies and Ontario Oil and Gas Limited.
Addressing newsmen in Abuja, Group Managing Director of the NNPC, Mr. Maikanti Baru, said so far, the Corporation has recovered $208 million from Aiteo and Televaras.
Baru, who was represented by Mr. Saidu Mohammed, Chief Operating Officer, Gas and Power, NNPC, said the Corporation is currently working hard to recover $103 million from Ontario.
Baru further stated that the NNPC has taken far-reaching? measures to recover N14 billion, being 130 million litres of missing Premium Motor Spirit, PMS, stored in the facilities of some depot owners.
Serious Threat to Economy
According to Baru, one of these operators has fully complied by returning the expropriated volumes of oil products, adding that it is working with security agencies to recover about N11 billion from the second operator.
He also appealed to vandals to desist from the destruction of its facilities, stating that the act poses serious threat to economy of the country, among others.
He stated: “On security challenges, we are setting up an all-advisory security council involving critical stakeholders which include security agencies, Niger Delta youths and leaders, international oil companies, among others, to complement the Federal Government’s efforts towards addressing host communities agitations as well as ensuring lasting peace in the region.
“For the umpteenth time, we want to passionately appeal to those behind indiscriminate acts of infrastructure vandalism to put an end forthwith to these despicable acts which are a great threat to the economy, eco-system and energy security.
Baru commended the media for its role in combating crude oil theft and vandalisation, while he called for further support from the media in its quest to work with relevant stakeholders towards safeguarding the nation’s oil and gas facilities.
Meanwhile, in another development, the NNPC said it is diversifying into the health sector and plans to commercialise its 52 clinics and hospitals spread across the country.
According to a statement by the NNPC in Abuja, this diversification initiative is part of its strategy to stay afloat as a commercially viable entity.
To drive this initiative, the statement noted that the Group Managing Director of the Corporation, Mr. Maikanti Baru, inaugurated the Boards of the NNPC Medical Services Limited, NMSL and the NNPC Health Maintenance Organisation (HMO) Limited.
The NNPC stated that following its recent restructuring, its Group Medical Services was realigned as a new venture non-core business entity, charged with the responsibility of creating new medical businesses that will generate revenue for the Corporation.
It explained that as at today, the NNPC Medical Services Division boasts of 52 clinics and hospitals spread across the Corporation’s various locations across the country, providing services to staff and their family members.
Speaking at the inauguration ceremony, Baru said the aim of the NNPC now, was to open up these medical facilities to other oil and gas organisations as well as other interested third party consumers for profitability.
He said, “My vision is to make NNPC a renowned Health Medical Services (HMS) provider globally.
In the nearby future, we are committed to making our medical facilities a reference point for the provision of world-class health medical services in Africa and beyond.”
Baru charged the Board members to provide the necessary direction to medical service delivery in NNPC in line with global best standards.
“It is going to be a new terrain for all of you. You must take advantage of the latest and most efficient technological advancement in healthcare service delivery,” he told the Board members.
While urging the two boards to carve a niche for the NNPC Medical Services as a specialized medical service provider such as “Burns and Trauma Centre”, he also called on them to collaborate with the best partners as it is very critical towards service delivery.
He further charged the two boards to work with synergy, without compromising their respective independence, stressing that their job comes with a lot of responsibility and they must prove themselves on this critical assignment.
Also speaking, the Chief Operating Officer, NNPC Ventures, who is also the Board Chairman of the two organisations, Mr. Babatunde Adeniran, said that with this development, the NNPC was taking advantage of the new opportunities in the nation’s health sector.
“With this development, the existing NNPC Hospitals will compete for clients with other top class hospitals in locations where they operate hence quality of service would be improved,” Adeniran stated.
Aside Dr. Adeniran who chairs the Boards of the NNPC Medical Services and the NNPC Health Maintenance Organisation, there are also seven members for each of the boards, which are expected to commence work immediately.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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