Connect with us

Crude Oil

NNPC Refineries Records N177.21B Loss Due Unproductivity For 19 Months

Published

on

Nigeria Port-Harcourt refinery

In 19 straight months of not processing any barrel of crude oil, the government-owned refineries in Nigeria recorded a total loss of N177.21bn, the latest data from the Nigerian National Petroleum Corporation have shown.

An analysis of data collated from NNPC’s monthly reports revealed that all the refineries did not refine crude oil from July 2019 to January 2021.

The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.

The country relies largely on importation of refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.

In 2019, Kaduna Refining and Petrochemical Company Limited only processed crude in one month (June); Port Harcourt Refining Company Limited in two months (February and March); and Warri Refining and Petrochemical Company Limited in four months (January, February, March and May).

The Kaduna refinery incurred an operating deficit of N64.84bn from July 2019 to January 2021, according to the NNPC data.

The Port Harcourt refinery lost N57.07bn in the period under review while the Warri refinery lost N55.30bn.

“The declining operational performance is attributable to ongoing revamping of the refineries, which is expected to further enhance capacity utilisation once completed,” the NNPC said in its latest monthly report.

In January 2021, 1.68 billion litres of Premium Motor Spirit (petrol) were supplied into the country through the Direct Purchase Direct Sale arrangement as against the 1.58 billion litres of PMS supplied in the month of December 2020.

Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC.

The Federal Executive Council approved in March the plan by the Ministry of Petroleum Resources to rehabilitate the Port Harcourt refinery with $1.5bn.

Early this month, the NNPC and Maire Tecnimont S.p.A. signed the engineering, procurement and construction contract for the rehabilitation of the refinery.

The Italy-based company said its subsidiary, Tecnimont S.p.A., had been awarded a contract by the Federal Executive Council to carry out rehabilitation works for the PHRC, a subsidiary of NNPC.

The overall contract’s value is about $1.5bn, and the project entails EPC activities for a full rehabilitation of the Port Harcourt refinery complex, aimed at restoring the complex to a minimum of 90 per cent of its nameplate capacity.

Maire Tecnimont said the project would be delivered in phases from 24 and 32 months and the final stage would be completed in 44 months from the award date.

In the first term of the President, Major General Muhammadu Buhari (retd), the NNPC had planned to rehabilitate the refineries to attain a minimum of 90 per cent capacity utilisation.

The plan was to use third-party financiers and the original refinery builders to provide the requisite funding and technical support.

However, after over one and a half years, negotiations with financiers were stalled in December 2018 due to varying positions on key commercial terms.

Continue Reading
Comments

Crude Oil

Oil Slips With Energy Prices in Europe Halts Record Rally

Published

on

Crude Oil - Investors King

Oil dipped toward $72 a barrel in New York after prices of energy commodities in Europe halted a record-breaking run.

West Texas Intermediate futures fell 0.6%, having reached the highest intraday level since early August on Wednesday. A rally in European gas and power prices to unprecedented levels was set to end as industries were starting to curb consumption. The surge in energy rates could temporarily boost diesel demand by as much as 2 million barrels a day as consumers switch fuels, according to Citigroup Inc.

Still, the bullish signals for oil are continuing to increase. U.S. crude inventories dropped by more than 6 million barrels last week to a two-year low, according to government figures, as coronavirus vaccination programs permit economies to reopen. Chevron Corp. Chief Executive Officer Mike Wirth warned that the world is facing high energy prices for the foreseeable future.

The investor optimism is showing up in key oil time spreads widening. Trading of bullish Brent options also surged to a two-month high on Wednesday.

Prices have been pushed higher in recent days “by supply outages combined with expectations of switching from gas to oil in the power sector,” said Helge Andre Martinsen, a senior oil market analyst at DNB Bank ASA. “We still believe in softer prices toward year-end and early next year as curtailed production returns and OPEC+ continues to increase production.”

Strong prices for gas, liquefied natural gas and oil are expected to last “for a while” as producers resist the urge to drill again, Chevron’s Wirth told Bloomberg News. Norway’s Equinor ASA said Thursday it also expects European gas prices to remain high over winter.

Continue Reading

Crude Oil

Nigeria Sets Up N20B Oil Sector Research Fund

Published

on

Petrol - Investors King

The minister of State for Petroleum Resources, Timipre Sylva, has launched a US$50 million Nigerian Content Research and Development (R&D) fund, this is seen as a breath of fresh air in a country where funding for research has been lacking.

The launching of the fund by the Nigerian Content Development and Monitoring Board (NCDMB) was also an occasion for the commissioning of the Board’s Technology Incubation and Innovation Center located within the Board’s Tower in Yenogoa, Bayelsa.

The minister said through a representative said the fund would be used to create research centers of excellence, finance research commercialisation, funding support for basic and applied research and endowment of professorial chairs in universities and research institutions in the country.

Nigeria spends only about 0.2 percent of its Gross Domestic Product on research and development annually as against developed and some developing countries that spend between 2.5 to 4 percent and between 0.7 and to 1.2 percent of their annual GDP respectively on research and development.

Sylva said that the continued underfunding of research and development in Nigeria has continued to reflect on the country’s overdependence on foreign goods and services.

”This is unsustainable if we are serious about building a national technological capability that will drive economic growth,” he said.

The minister, therefore, urged oil and gas operating and service companies and other members of the private sector to embrace investment in R&D as a key component of their business model in order to complement the NCDMB effort.

While commissioning the Technology Incubation and Innovation Center, Sylva said that the center will provide a formidable platform for the generation, incubation and acceleration of innovative ideas to the world marketplace.

He said innovations start from the creation of ecosystems where ideas can connect and challenged various industry stakeholders and youths to utilize the Center to solidify adaptation of existing solutions and also create new solutions that address major industry challenges in the country.

Sylva reconstituted the Nigerian Content Research and Development Council, NCRDC. The council consists of delegates from three key groups including the Government, Industry and Academia.

The council offers policies that shape the direction of NCDMB’s research interventions with a membership that includes representatives of the Petroleum Technology Association of Nigeria, PETAN, Oil Producers Trade Section, OPTS and the Petroleum Contractors Trade Section, PCTS.

Other statutory members include the National Universities Commission, NUC, the National Board for Technology Incubation, NBTI and the National Office for Technology Acquisition and Promotion, NOTAP.

Speaking earlier during his presentation, Simbi Kesiye Wabote, the Executive Secretary of NCDMB, noted that research and development are integral to the growth and development of any nation as it plays an important role in opening new chapters of modern life.

Wabote however regretted that African nations accounted for less than 1 percent of what is spent on R&D globally, adding that the continent’s aggregate GDP is only 3 percent of the global GDP.

“There is a nexus between what is spent on research and development and economic prosperity. It is time to start nurturing the growth of our home-grown technology rather than just being a wholesome consumer of other people’s innovation,” he said.

According to Wabote, another reason NCDMB is channeling its efforts on research and development is that it is one of the six parameters which are essential for sustainable local content practice.

Other five parameters for sustainable local content development according to him include an enabling regulatory framework, periodic gap analysis, structured capacity building and fiscal and monetary incentives to attract new investments and keep existing businesses afloat as well as create access to the market to enhance patronage of goods and services generated from established capacities.

He further explained that another reason the Board is promoting research and development in the oil and gas industry is that it is in line with the provisions of the Nigerian Oil and Gas Industry Content Development, NOGICD, Act of 2010.

“The authors of the Nigerian Oil and Gas Industry Content Development Act of 2010 recognized the importance of Research and Development and included key provisions in the Act. Specifically, Sections 36, 37, 38, and 39, of the NOGICD Act are dedicated to promoting Research and Development,” Wabote said.

He also noted that research and development is a major feature of the Board’s 10-Year Strategic roadmap that seeks to increase the level of Nigerian content in the oil and gas industry to 70 percent by the year 2027.

He said, “The 10-Year Roadmap consists of five pillars and four enablers. The pillar on Technical Capability Development contains initiatives to further drive the delivery of Research and Development in the oil and gas industry.

The enabler on research and statistics cover the initiatives required to conduct research in key areas to generate new evidence to address industry knowledge gaps and operational challenges.”

Wabote said the Board would soon embark on a roadshow to showcase its research and development initiatives to the various stakeholder groups in the country, including universities that represent a key constituency; saying that the Board was set to move fully into the implementation phase of its initiatives to derive better results from the intellect of Nigerians in the academia, research institutions, and technology hubs.

Continue Reading

Crude Oil

Oil Rises on Supply Concerns as Hurricane Ida Disrupts Global Oil Market

Published

on

U.S. Crude Oil - Investors King

Crude oil gained on Monday amid concerns output from the United States, the world’s largest oil producer may remain below usual level given damages done by Hurricane Ida three weeks ago.

Brent crude oil, against which Nigerian crude oil is priced, gained 62 cents or 0.9 percent to $73.54 a barrel at 11:56 am Nigerian time while the U.S West Texas Intermediate (WTI) crude oil appreciated by 64 cents or 0.9 percent to $70.36 per barrel.

Brent crude oil has remained in range, trading between $70 and $74 per barrel in the last three weeks, a position expected by most oil experts to be maintained in the near-term.

“Oil prices may not have much room to rise in the near term, but at the same time are not expected to crash soon,” said Stephen Brennock of broker PVM.

Last week, in a report released by th U.S. Energy Information Administration (EIA), the administration said it expects Brent crude oil to remain around current levels for the rest of 2021, averaging $71 a barrel in the fourth quarter of the year.

“Markets still need clarity on the virus impacts beyond the very near term and until we get that, it seems like most assets, including oil, may continue to drift sideways,” Howie Lee, an economist at Singapore’s OCBC bank.

Continue Reading




Advertisement
Advertisement
Advertisement

Trending