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Pan Ocean’s Amukpe Pipeline to Boost Nigeria’s Crude Exports by 160,000bpd

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Gas-Pipeline
  • Pan Ocean’s Amukpe Pipeline to Boost Nigeria’s Crude Exports by 160,000bpd

Pan Ocean’s Amukpe-Escravos Pipeline Project (AEPP) in Delta State, which is scheduled to come on stream before the end of the third quarter of 2017, will boost Nigeria’s crude oil exports by 160,000 barrels per day and also serve as an alternative to the much troubled Trans Forcados Pipeline (TFP) for oil companies operating in the western Niger Delta, the company has said.

The Senior Pipeline Engineer and Project Lead of AEPP, Mr. John Okusolubo, said in a statement Wednesday that the objective of the pipeline project was to provide Pan Ocean Joint Venture and other producers such as Seplat Petroleum Development Company Plc, Nigerian Petroleum Development Company (NPDC), Conoil, Sahara, and others an alternative export pipeline route to the existing TFP that had been a casualty of militant attacks.

Okusolubo said: “The primary objective of AEPP is to ensure that there is no disruption to crude oil export like the scenario we experienced on the TFP over the past 16 months where there was a total collapse of crude export.

“Nigeria’s experience and history have shown that it is not wise to be highly dependent on a particular source that is why we have AEPP as an alternative to TFP which has been our major means of exporting crude oil as a joint venture (JV) partner.”

According to him, the construction of the AEPP entails the use of continuous Horizontal Directional Drilling (HDD) method to install the entire pipeline length for the purpose of security from the act of vandalism, which is prevalent in the area.

He stated that the AEPP is going to be a major export line that will give the opportunity for other injectors who may also be stalled by the erratic vandalism of the TFP to join in the transport of crude to Escravos.

“This great achievement means Pan Ocean has an alternative line to export its crude and has also created an opportunity for others who have been using TFP to also export their crude without disruption. This project will help the country to continue to flow their crude and keep the economy alive,” he added.

Attacks on oil and gas facilities by the Niger Delta militants have severely impacted exploration, production, and export of crude oil from the region.

Oil companies operating in the region have either cut back on their production or in some cases stopped production over attacks on their facilities.

The Trans Forcados Pipeline has a daily capacity of 240,000 bpd, with average daily flows ranging between 200,000 bpd and 240,000 bpd.

Amid its shutdown, Nigeria’s crude oil production fell from 2 million bpd to as low as 1.27 million bpd, losing its position as Africa’s number one crude oil producer and falling behind Angola several times over the past year.

Pan Ocean, operator of the NNPC-Pan Ocean Joint Venture had responded to this threat, by awarding a contract for the construction of Amukpe-Escravos Pipelines Project (AEPP) to Fenog Nigeria Limited, an indigenous company in 2011.

The contract, which involved installation of 20-inch pipelines across the 67 kilometres route, will have the capacity to handle 160,000 barrels of oil per day (BOPD) with remote manifolds to accommodate third parties’ crude oil evacuation to the Escravos Tank farm.

FG Agencies Agree on Oil Revenue Management

Meanwhile, key agencies of the federal government have agreed to partner in oil revenue savings and promotion of better attitude to public office.

They are Nigeria Extractive Industries Transparency Initiative (NEITI), Nigeria Sovereign Investment Authority (NSIA) and National Orientation Agency (NOA).

A statement by NEITI’s Director of Communications, Dr. Orji Ogbonnaya Orji, Wednesday said in Abuja that the agencies reached the agreement at separate meetings with NEITI Executive Secretary, Mr. Waziri Adio.

According to Adio, the meetings are focused on exploring areas of inter-agency mutual cooperation.

He explained that while NSIA managed the Sovereign Wealth Fund (SWF) derived from extractive revenues, NOA led the national campaign for attitudinal change and ethical values in the country.

At the meeting with the management of NSIA, the NEITI executive secretary expressed regrets that “the nation’s paltry oil savings defeated the rationale for having such savings in the first place”.

“Nigeria does not have enough oil savings to finance even the fifth of a year’s budget at the federal level, not to talk of having enough for investments or for the future generation,” he lamented.

Adio said the occasional paper recently released by NEITI, largely focused on the “Case for a Robust Oil Saving Fund for Nigeria”.

He added that in the publication, NEITI drew public attention to the fact that Nigeria failed to save enough oil revenues when oil prices were quite high in order to sustain economic activities.

“From the paper also problematic is the level of consumption relative to non-oil exports. Nigeria typically responds to high oil prices with equally high but manifestly unsustainable level of consumption.

“The absence of sufficient savings left Nigeria severely exposed when the price of oil, Nigeria’s main source of government revenues and foreign exchange, started to plunge in 2014,” Adio said.

He said the researched publication largely touched on the work of NSIA and the managers of Nigeria Sovereign Wealth Fund.

He explained that NEITI’s decision to alert the nation on the need to save for the rainy day was informed by the need for the country to prepare adequately for frequent price volatility, “depletion of non-renewable resources and for future generation”.

Earlier, the Managing Director of NSIA, Dr. Uche Orji, commended NEITI for taking the initiative to produce the paper, adding that it helped NSIA to tell its own story in an independent manner.

According to him, “NEITI has a voice that resonates with policy makers and its other stakeholders. We found the publication exceptional and commendable.”

The NSIA boss said the report was produced without the inputs of his agency.

He described the recommendations in the publication as very succinct and apt.

“We are here to ask for closer collaboration between the NSIA and NEITI in the discharge of our individual mandates while working together for the common good of our country,’’ he added.

The NSIA managing director briefed the NEITI management on what his agency had achieved so far, the prospects of on-going projects and unfolding challenges.

He further explained that the NSIA established frameworks for good corporate governance, risk management, transparency, and accountability, adding that the solid governance structure had attracted credible partners, notable investors, and private equity funds.

He disclosed that the Nigeria Governors’ Forum (NGE), which initially opposed its mandate, is one of its greatest supporters at the moment.
“The $250 million we invested in 2016 came from the state governments’ share of the NLNG dividend,” Orji hinted.

Meanwhile, NEITI and NOA are to establish an effective platform for collaboration, especially in information sharing, public education, and enlightenment.

The Director-General, Dr. Garba Abari, announced this when NEITI’s executive secretary visited his office.

Abari announced that 813 offices of NOA would be made available to NEITI as a platform for dissemination of the organisation’s reports to all nooks and crannies of Nigeria.

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

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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