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NPDC Loses N260bn as Production Capacity Falls by 70%

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Heritage Oil
  • NPDC Loses N260bn as Production Capacity Falls by 70%

The production capacity of the Nigerian Petroleum Development Company has significantly fallen due to pipeline sabotage.

The oil production subsidiary of the Nigerian National Petroleum Corporation, the Nigerian Petroleum Development Company, has been recording steady monthly losses arising from its inability to sell substantial volume of crude oil it is producing.

An analysis of the month-by-month financial report of the NPDC showed that the company’s inability to sell crude had steadily reduced its revenue between February 2016 and February 2017 by about N20bn monthly.

Officials of the NNPC confirmed to our correspondent in Abuja that the petroleum development company had lost over N260bn as a result of this, adding that the crude production capability of the NPDC had dropped by 70 per cent.

They noted that the national oil firm could indeed attain lofty heights with the support of Nigerians, especially in areas of security and integrity of infrastructure.

The Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, admitted that the NPDC’s inability to sell crude and the resultant effect on the company’s revenue had been a source of concern to the corporation.

He, however, stated that the management of the NNPC was working out ways to address the issue.

“On the NPDC and pipeline vandalism, the NNPC management is still discussing it,” Ughamadu, who also referred our correspondent to the corporation’s reports on the matter, said.

In one of its financial and operations reports, the corporation stated that “with the restoration of the NPDC production, the NNPC can indeed post more impressive results where substantial portion of crude oil sale for the month of over N20bn could not be realised.”

Similarly, the NNPC in its just released operations reports for February 2017, showed that the NPDC’s contribution to the national crude oil and condensate production in January this year was the lowest at 1.18 million barrels, when compared with the contributions from joint ventures at 16.23 million barrels; production sharing contracts, 28.2 million barrels; alternative funding, 8.57 million barrels; and independent/marginal fields, 2.77 million barrels.

“Of the January 2017 production, JVs and PSCs contributed about 28.5 per cent and 49.52 per cent, respectively. While AF, NPDC and independents/marginal fields accounted for 15.05 per cent, 2.07 per cent and 4.86 per cent, respectively,” the corporation stated.

Officials of the oil firm told our correspondent on Saturday that the compromise of the integrity of the NNPC’s infrastructure by vandals, which led to the declaration of a force majeure by Shell Petroleum Development Company following the vandalism of the 48-inch Forcados export line, resulted in production shut-in of about 300,000 barrels of crude oil per day.

In a presentation to the House of Representatives Committee on Local Content, which was made available to our correspondent in Abuja, the NPDC’s Managing Director, Mr. Yusuf Matashi, explained that the pulverisation of the Forcados trunk line by militants in 2016 also impacted gas production by the company and its JV partners gravely.

He said, “The attack, which primarily led to a loss of about 70 per cent of the NPDC’s crude oil production capability, also had an effect on gas production. Unfortunately, gas production in the region we operate is not non-associated gas but associated with the crude oil we produce.

“So by the time we shut in the oil well, we also shut in most of the gas. That is why we now see the level of gas supply shortage for power generation.”

Matashi noted that some other operators might have other reasons for the shortfall in gas supply in their domain, but stressed that the damage of the Forcados export terminal supply line was the biggest obstacle to the production of gas by the NPDC and its JV partners.

He, however, stated that the company would increase its gas production by as much as 50 per cent whenever the Forcados line comes back on stream.

“The impact of the attack on that line is immeasurable and in the last one year, the NPDC has struggled to mitigate the effects of that act on its production,” Matashi explained.

The Director, Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, expressed worry over the vandalism of pipelines and its impact on oil earnings by the country.

He, however, lauded the efforts of the Federal Government, led by Acting President Yemi Osinbajo, in ensuring peace and stability in the Niger Delta, a development that had also impacted positively on crude oil production in recent times.

Iledare said, “Why should someone or a group of persons rupture the country’s pipelines and plunge the entire nation into dire straits financially? It is uncalled for and should be condemned by all.

“This is particularly painful when you consider the effects of such acts on our national economy, although we’ve recorded some improvements in production volumes in recent times after the series of interventions by the acting President in the Niger Delta region.”

On oil production volumes, the latest operations report of the NNPC stated that a total of 56.95 million barrels of crude oil and condensate was produced in January 2017, representing an average daily production of 1.84 million barrels.

This represents an increase of 16.51 per cent compared to December 2016 performance.

It stated that the NPDC’s cumulative production from all fields (January 2016 to January 2017) amounted to 18,196,613 barrels of crude oil, which translated to an average daily production of 45,835 barrels.

Comparing the NPDC performance to national production, the report stated that the company’s production share amounted to 2.53 per cent.

It said, “The NPDC production continued to be hampered by the incessant pipeline vandalism in the Niger Delta. The NPDC is projected to ramp up production level to 250,000 barrels per day after the completion of the ongoing the NPDC re-kitting project and repairs of vandalised facilities.

“Production from the NPDC wholly operated assets amounted to 9,781,195 barrels (or 53.75 per cent of the total NPDC production) with Okono Okpoho (OML 119) alone producing 91.90 per cent of the NPDC wholly owned operated assets or 49.4 per cent of the total NPDC production.”

On the NPDC operated JV assets, in which the firm owns 55 per cent controlling interest, crude oil production amounted to 4,850,475 barrels or 26.66 per cent of the company’s total production.

The report also noted that for the non-operated assets, production level stood at 3,564,943 barrels or 19.59 per cent of the company’s production.

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.

Economy

The Kenya Private Sector Alliance (KEPSA) and The Canada-Africa Chamber of Business Announce Major Memorandum of Understanding (MoU)

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The Kenya Private Sector Alliance and The Canada-Africa Chamber of Business are proud to announce collaboration to promote, support and facilitate bilateral trade and investment opportunities from Canada into Kenya.

The first engagement will be a virtual trade mission to Kenya from Canada in May.

The 3-year agreement MoU was signed today during the Second Session of the Binational Commission meeting between the Governments of Kenya and Canada – and is subject to ongoing renewal.

“This MoU will solidify the existing trade relations between Kenya and Canada and establish strong bonds between the two countries that will go a long way to boost private sector trade and investment. The MOU will also enable us to exchange business information with CACB which is critical especially to our members who wish to expand their coverage to international market,” explained Ms. Carole Kariuki Karuga, KEPSA CEO.

The Kenya Private Sector Alliance is the apex body of private sector in Kenya.

The Canada-Africa Chamber of Business is a 27-years old organization committed to accelerating trade, business and investment between Canada and Africa.

‘Nairobi is a vital gateway not just to Kenya and the region, but the continent’s economies of the future in Africa,’ noted Garreth Bloor, President of The Canada-Africa Chamber of Business.

‘KEPSA is world leader in the private sector, showcasing excellence on the global stage. This MoU is a great honour for The Canada-Africa Chamber of Business, our leadership, and all our members across Canada,’ says Deepak Dave, the organization’s long-standing representative in Nairobi and Chief Risk Officer at the African Trade Insurance Agency.

‘The joint intended results of the co-operation agreement between CACB and KEPSA seeks to increase two-way trade and investment between Canada and Kenya in all sectors – while laying the foundations to explore trade missions to Kenya by The Canada-Africa Chamber of Business and to Canada by KEPSA,’ said Sebastian Spio-Garbrah, Chair of The Canada-Africa Chamber of Business.

Guided by this MOU, CACB and KEPSA will work together towards on a case-by-case basis exploring events together, exchange of business information and reciprocity members of the Kenya Private Sector Alliance to enjoy the privileges of membership afforded to CACB members, and to ensure KEPSA members are well-positioned in the Canadian market for investment and trade in all sectors and that CACB members are well-positioned in the Kenyan market for investment and trade in all sectors.

“As KEPSA, we remain committed to establishing progressive business and trade partnerships with Canada and other similar minded parties for a mutual benefit of our members as well as those of our CACB counterparts,” said Ms. Carole Kariuki Karuga, KEPSA CEO.

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Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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Institute of Chartered Shipbrokers

India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).

The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.

However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.

It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Economy

Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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