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NEMBE SPILL: AITEO Mobilizes To Clean Up SBAR SPILL, Collaborates With Renowned ‘BOOTS & COOTS, CNA

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• CEO, Benny Peters Assures Affected Communities of Speed, Ecosystem Protection.

Two weeks after a non-producing wellhead in the NembeLocal Government Area of Bayelsa State leaked and is still spewing its contents, the operators of the NNPC/Aiteo Joint Venture of Oil Mining Lease (OML) 29, Aiteo Eastern Exploration and Production Co. (AEEPCo), have announced several proactive measures to combat and contain the spill.

The wellhead, located in the Santa Barbara Southwest field in Nembe LGA, was, according to AITEO, predominantly dormant. The leak started on November 5. According to Ndiana Mathew, spokesperson for AITEO, said that upon noticing the leak, “Aiteo notified all relevant regulatory agencies and, thereafter, mobilised containment resources to limit the impact on the environment. As required, Aiteo promptly called for a Joint Inspection Visit (JIV). Due to the high-pressure effusion, the JIV team could not reach the location and that inspection was aborted.”

“Since then, Aiteo has activated an elaborate and extensive spillage containment response in the internationally prescribed manner. Though spills of this nature are not uncommon to the oil and gas industry, their resolution requires expert skill and equipment that is not routinely or readily available. The typical process is to first kill the well and stop the leak and then focus on the clean-up.”

Mathew said further that aside from the urgent possible technical responses to contain the leak, Aiteo has sought, become involved with and is now in active collaboration with Clean Nigeria Associates (CNA) which has since mobilised to site in addition to Aiteo internal resources to reinforce containment and recovery efforts. CNA is the oil and gas industry non-profit umbrella body with expertise and resources to contain spills of this nature. Because it was causing growing anxiety among the local communities that rely on the surrounding land and waterways, the area has been cordoned off and the CNA is mobilising additional resources to strengthen the containment effort.

It was gathered that a well-killing assessment site visit has been carried out to evaluate the assets and earmark the resources required to bring the effusion under control. The required apparatus including heavy-duty and specialist equipment are presently being mobilized, locally and internationally, on a fast-track basis, to bring the well under control. For this purpose, “Aiteo has on-boarded the involvement of the renowned Boots & Coots, arguably the leading well control company in the world, working with a local resource. Upon this intervention and conclusion, it is expected that the persistence of the leak alongside its functional consequences will be abated and significantly diminished,” Mathew stated.

Also, senior personnel of AITEO have visited the affected communities and made available, for the use of the communities, relief materials aimed at ameliorating the direct consequences of the incident. At Opu-Nembe Kingdom where the Aiteo delegation was received by the traditional ruler, His Royal Majesty, Dr Biobelemoye Josiah Ogbodo VIII, his council of chiefs and foremost indigenes and government officials, the King said, “We are happy that Aiteo has initiated this visit to support the community at this time and urge it to continue to work with us as partners in progress on its corporate goals in the community.”

Similarly, the Aiteo Group CEO, Mr Benedict Peters, has extended his assurances to the affected communities affirming, “We are doing everything in our power to contain this spill and ameliorate the situation as rapidly, safely and responsibly as possible. We have mobilized best-in-class resources and expertise to put this mishap behind us. Be rest assured of our resolve to limit the escape of oil and protect the ecosystem from its effects.”

In the statement signed by Mathew, the company averred that it remains committed to ensuring immediately that the circumstances are brought under better control and ascertaining the immediate and remote causes of the leak.

Furthermore, “It is important that we affirm our preliminary view based on our assessment of the proximate circumstances that it will be difficult to exclude deliberate tampering of the well by oil thieves attempting to siphon crude directly from the wellhead. In our view, sabotage remains the most imminent cause of this incident,” the company stated.

“Oil theft and asset vandalism continue to present the biggest challenge we face in the operations of oil and gas production in the Niger Delta area. It has continued to damage the production profile of oil producers in so many ways.

As we commend the relevant security agencies with whom we interface to combat this menace, we believe the need and capacity to provide significantly more remain overwhelmingly critical especially because there is so much more to be done to realign the architecture of the delivery infrastructure of oil and gas production in Nigeria in line with the current industry structure of multiple producers operating assets that were previously built and managed by one producer.”

The company reiterated that it feels deeply concerned about the incident and that the circumstances and fortunes of the immediate community remain its most anxious consideration, which it stated had assumed the highest priority alongside making safe the well and its immediate environs.

“It is our fervent desire that in the attainment of this intensely challenging objective, the interests of the proximate community continue to be safeguarded in every material respect by the collective efforts of our company and all the industry professionals whose involvement Aiteo has convoked,” the statement concluded.

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Oil Prices Gain Amid U.S. Production Woes and Rate Cut Expectations

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Crude gained on Tuesday following Hurricane Francine disruption in the U.S. and the possibility of an interest rate cut in the U.S.

These two factors have boosted traders’ sentiment in the oil market despite concerns about global demand and slowing growth in China.

Brent crude oil, against which Nigerian oil is priced, rose by 36 cents, or 0.5% to $73.11 per barrel while the U.S. crude oil gained 53 cents, or 0.8% to settle $70.62 per barrel.

Both closed higher in the previous trading session as the market reacted to the impact of Hurricane Francine on U.S. Gulf Coast production.

More than 12% of crude oil production and 16% of natural gas output in the Gulf of Mexico remained offline as of Monday, according to the U.S.

According to the Bureau of Safety and Environmental Enforcement (BSEE), the disruption has raised concerns over short-term supply shortages and contribution to the upward momentum in prices.

Yeap Jun Rong, a market strategist at IG said “while the market is seeing near-term stabilization, the fragile state of China’s economy and anticipation of the U.S. Federal Reserve’s interest rate decision could limit further gains.”

The Federal Open Market Committee (FOMC) is expected to announce a rate cut later this week, with futures markets pricing in a 69% chance of a 50-basis-point reduction.

Lower interest rates are favourable for oil prices as they reduce borrowing costs and encourage economic growth.

“Growing expectations of an aggressive rate cut are lifting sentiment across the commodities sector”, stated ANZ analysts.

The market, however, remains cautious due to lower-than-expected demand from China, the world’s largest importer of the commodity.

Chinese data released over the weekend showed that China’s oil refinery output dropped for the fifth consecutive month in August. This signals weaker domestic demand and declining export margins.

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New Petrol Prices to Range Between N857 and N865 Following NNPC-Dangote Deal

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Hopes for cheaper Premium Motor Spirit (PM), otherwise known as petrol, rose, last night, as indications emerged that the product may sell for between N857 and N865 per litre after the Nigerian National Petroleum Corporation Limited (NNPCL) starts lifting the product from Dangote Refinery today.

It was learnt that the NNPCL, as the sole off-taker of petrol from the refinery, is projected to lift the product at N960/N980 per litre and sell to marketers at N840/N850 to enable Nigerians to get it at between N857 and N865 at the pump at filling stations.

However, whether uniform product prices would apply at filling stations nationwide was unclear.

As of yesterday, petrol sold at N855 per litre at NNPCL retail stations in Lagos and it was the cheapest anyone could buy the product while major marketers sold around N920.

At independent marketers’ outlets, the price was over N1,000. Elsewhere across the country, PMS sold for more than N1,200 per litre.

Sources said the new arrangement from the NNPCL and Dangote Refinery negotiations, spanning more than one week, would allow Nigerians to get petrol at between N857 and N865 per litre and represents an average under-recovery of about N130 to NNPCL.

President Bola Tinubu, Sunday Vanguard was made to understand by a Presidency source, made it clear to the negotiating parties that “the price at which petrol would be sold to Nigerians should not be such that would place heavy financial burden on them while dealing with the new reality of the prevailing price”.

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has, meanwhile, expressed optimism that the deal would reduce the pressure on foreign exchange (FX) demands and shore up the value of the Naira – presently, between 30% and 40% of FX demands go into the importation of PMS.

Chief Corporate Communications Officer, NNPC Ltd., Olufemi Soneye, who confirmed the readiness of the company to start lifting petrol today, told Sunday Vanguard, yesterday: “NNPC Ltd has started deploying our trucks and vessels to the Dangote Refinery to lift PMS in preparation for the scheduled lifting date of September 15th, as set by the refinery.

“Our trucks and personnel are already on-site, ready to begin lifting. We expect more trucks, and the deployment will continue throughout the weekend so we can start loading as soon as the refinery begins operations on September 15, 2024.”

Soneye hinted that at least 100 trucks had already arrived at the refinery for the petrol lifting, adding that the number of trucks could increase to 300 by Saturday evening.

On his part, Executive Secretary, of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, said: “We have been lifting diesel (AGO) and aviation fuel (jet fuel) and we look forward to lifting petrol (PMS).”

On pricing, he said: “We await clarity in respect of the pricing mode, and once that is clarified, we’ll do the needful towards meeting the energy needs of Nigerians.”

Yesterday, Edun, the Minister of Finance and Coordinating Minister of the Economy said the structuring of the NNPCL, Dangote Refinery deal in Naira would assist in reducing pressure on the local currency.

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Oil Prices Surge as Hurricane Francine Disrupts U.S. Gulf Production, Brent and WTI See Gains

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Oil prices rose on Friday, extending a rally sparked by output disruptions in the U.S. Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.

Brent crude oil, against which Nigerian crude oil is priced, rose by 34 cents, or 0.5%, to $72.31 per barrel while U.S. West Texas Intermediate crude futures rose by 38 cents, or 0.6%, to $69.35 a barrel.

If those gains hold, both benchmarks will break a streak of weekly declines, despite a rough start that saw Brent crude dip below $70 a barrel on Tuesday for the first time since late 2021. At current levels, Brent is set for a weekly increase of about 1.7%, and WTI is set to gain over 2%.

Oil producers assessed damages and conducted safety checks on Thursday as they prepared to resume operations in the U.S. Gulf of Mexico, as estimates emerged of the loss of supply from Francine.

UBS analysts forecast output in the region in September will fall by 50,000 barrels-per-day (bpd) month-over-month, while FGE analysts estimated a 60,000 bpd drop to 1.69 million bpd.

The supply shock helped oil prices recover from a sharp selloff earlier in the week, with demand concerns dragging benchmarks to multi-year lows.

Both the Organization of Petroleum Exporting Countries and the International Energy Agency this week lowered their demand growth forecasts, citing economic struggles in China, the world’s largest oil importer.

A shift towards lower-carbon fuels is also weighing on China’s oil demand, speakers at the APPEC conference said this week.

Official data showed nearly 42% of the region’s oil output was shut-in as of Thursday.

China’s crude oil imports averaged 3.1% lower this year from January through August compared to the same period last year, customs data showed on Tuesday.

“Flagging domestic oil demand in China has become a hot topic and was further underlined by disappointing August trade data,” FGE analysts said in a note to clients.

Demand concerns have grown in the United States as well. U.S. gasoline and distillate futures traded at multi-year lows this week, as analysts highlighted weaker-than-expected demand in the top petroleum consuming country.

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