Crude Oil

Zero Losses: Trans-Niger Pipeline Achieves Flawless Crude Oil Production in May, Boosting Government Reforms

The Trans-Niger Pipeline (TNP) has achieved an extraordinary feat by reporting flawless crude oil production throughout the entire month of May.

Published

4 months ago

June 14, 2023

Investors King

In a significant victory for the Nigerian government’s ongoing reforms, the Trans-Niger Pipeline (TNP) has achieved an extraordinary feat by reporting flawless crude oil production throughout the entire month of May.

This accomplishment is particularly noteworthy considering the extensive efforts made in April to remove over 400 illegal connections from the pipeline.

Experts are hailing this progress as a testament to the effectiveness of the government’s reforms, which encompass private security engagement, enhanced security measures, and increased collaboration with host communities.

Kelvin Emmanuel, an esteemed energy sector expert and co-founder/CEO at Dairy Hills, commended the success, stating, “The fact that the month of May recorded zero incidences of pipeline transportation on Shell’s 28-inch Trans Niger Pipeline from flow stations in Rivers & parts of Bayelsa State is proof that the Task Force set up by the President to investigate coordinated crude oil theft is working.”

The Trans-Niger Pipeline (TNP) holds a significant position as one of Nigeria’s largest oil pipelines, playing a pivotal role in transporting crude oil within the Niger Delta region, renowned for its vast oil reserves. Operated jointly by the Shell Petroleum Development Company and the Nigerian National Petroleum Company Limited (NNPC), the TNP stretches approximately 180 kilometers (112 miles).

Serving as a critical infrastructure, the TNP facilitates the movement of crude oil from oilfields in the Niger Delta to export terminals, primarily the Bonny Export Terminal. With an impressive capacity to transport over 450,000 barrels of crude oil per day, it contributes significantly to Nigeria’s oil production and export.

Data from the Nigerian Upstream Petroleum Regulatory Commission indicates a remarkable 24% increase in oil production (crude oil and condensate) via the Bonny Terminal, soaring from 3.0 million barrels in April to an impressive 3.72 million barrels in May.

The Trans-Niger Pipeline’s responsibility of transporting approximately 180,000 barrels of crude oil per day to the Bonny export terminal plays a vital role in ensuring the terminal’s seamless operation. As a major onshore crude oil terminal, the Bonny terminal boasts an impressive capacity of 5.7 million barrels.

During an oil and gas conference in April, Osagie Okunbor, the managing director of the Shell Petroleum Development Company of Nigeria (SPDC), revealed that the company had successfully identified and eliminated 460 illegal connections on the Trans-Niger Pipeline (TNP) before resuming operations following a one-year shutdown.

Etulan Adu, an accomplished oil and gas production engineer, attributes the improved output to pipeline intervention works, curbing of bunkering and oil theft activities, increased injection from producing companies, and contributions from third-party injectors to the terminal.

“These factors have a direct relationship and impact on volumes. Being intentional about this would go a long way in maintaining it. The Policy Advisory Council is apt on the nation sending out a strong signal that it’s not business as usual with regards to insecurity,” said Jide Pratt, chief operating officer of Aiona and country manager of Trade Grid.

The Bonny Terminal, with its substantial capacity to handle large volumes of crude oil, has remained a vital component of Nigeria’s oil industry for numerous years. However, it has faced significant challenges in the past, including attacks and disruptions leading to force majeures, substantial losses, and disruptions in oil production.

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Crude Oil

Oil Prices Surge as China’s Holiday Demand and Tight US Supply Drive 2% Weekly Gain

Published

3 days ago

September 29, 2023

Samed Olukoya

Oil prices to close the week with about a 2% gain as robust holiday demand from China and constrained U.S. fundamentals overshadowed concerns about potential supply increases from Saudi Arabia.

Brent crude oil, against which Nigerian oil is priced, gained 5 cents to $95.43 per barrel at about 6:00 a.m. Nigerian time on Friday while the U.S. West Texas Intermediate crude (WTI) rose by 16 cents to $91.87 per barrel.

The market’s resilience became evident as it rebounded from a slight 1% dip in the previous session when profit-taking followed a surge in prices to 10-month highs.

China, the world’s largest oil importer, played a pivotal role in driving prices higher. Strong fuel demand coincided with China’s week-long Golden Week holiday, with increased international and domestic travel significantly boosting Chinese oil consumption.

Analysts at ANZ noted that this holiday season’s surge in travel was underpinned by the fact that the average daily flights booked were a fifth higher than during Golden Week in 2019, pre-dating the COVID-19 pandemic.

Also, improving macroeconomic data from China and the steady growth of its factory activity further supported the bullish sentiment.

The U.S. economy’s robust growth and indications of accelerated activity in the current quarter also bolstered expectations of sustained fuel demand.

Also, tight supplies in the U.S., evidenced by dwindling storage levels at Cushing, Oklahoma, provided additional support to oil prices. As rig counts fell, U.S. oil production was expected to slow down, potentially pushing the market into a deficit of more than 2 million barrels per day in the last quarter.

Investors are now eagerly awaiting the upcoming meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+), scheduled for October 4th.

The meeting will be a crucial indicator of whether Saudi Arabia will consider stepping up its supply in response to the nearly 30% surge in oil prices this quarter.

Analysts, however, caution that the market may be entering overbought territory, leading to possible hesitancy among participants and concerns that OPEC+ could ease production cuts earlier than planned if prices continue to rise.

The outcome of next week’s OPEC meeting will undoubtedly hold significant implications for the oil market’s future trajectory.

Crude Oil

Oil Prices Soar to a Year High as Crude Reserves Plummet

Crude stocks at a pivotal storage hub in Cushing, Oklahoma, hit their lowest levels since July last year, sparking concerns about future supply stability.

Published

4 days ago

September 28, 2023

Investors King

Oil prices surged to their highest level in over a year during Asian trading hours, following a significant drop in crude stocks at a key storage hub.

Crude inventories in Cushing, Oklahoma, plummeted to a mere 22 million barrels in the fourth week of September, close to operational minimums, according to data from the U.S. Energy Information Administration (EIA).

This translates to 943,000 barrels compared to the prior week.

The U.S. West Texas Intermediate (WTI) rose to $95.03 per barrel during Asian trading hours, a peak not seen since August 2022 before settling at $94.61 per barrel.

Meanwhile, Brent crude oil, the international benchmark for Nigerian oil, rose by 1.05% to $97.56 per barrel.

Experts have attributed this rapid price escalation to the precarious situation in Cushing, with Bart Melek, Managing Director of TD Securities, stating, “Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022.”

Melek expressed concerns about the challenges of getting crude oil into the market if inventories continue to dip below these critical levels.

Predicting the future trajectory of oil prices, Melek suggested that prices could remain at elevated levels for the remainder of the year, especially if the global oil cartel, OPEC+, continues to enforce supply restrictions.

He noted that the global oil market is facing a “pretty robust deficit” on top of an already significant shortfall for this quarter due to OPEC’s production cuts.

Saudi Arabia, a key player in OPEC+, has extended its voluntary crude oil production cut of 1 million barrels per day until the year’s end, bringing its crude output to nearly 9 million barrels per day.

Russia has also pledged to continue its 300,000 barrels per day export reduction until December.

However, Melek added that, “We do think that prices could keep up near these levels for quite some time. But I don’t think it’s too permanent. And we might have seen the end of this rally.”

Crude Oil

Nigerian Pump Prices May Increase as Crude Oil Hits $93.55 Per Barrel

Published

6 days ago

September 26, 2023

Investors King

Amidst growing concerns over the surging price of crude oil on the international market, Nigerian citizens are bracing themselves for a possible increase in pump prices.

Crude oil, the lifeblood of Nigeria’s economy rose to $92.42 per barrel on Monday, casting a shadow of uncertainty over the already volatile fuel market.

This surge in crude oil prices comes in tandem with the persistent depreciation of the Naira in foreign exchange markets, where it traded at N980 to $1 on the parallel market. For many Nigerians, these simultaneous developments trigger memories of the recent fuel price hikes that followed the removal of fuel subsidies earlier this year.

In June, the government removed the subsidy, leading to a sharp 210% increase in the pump price from N175 per liter to N546.83 per liter. In a further blow to consumers, less than a month later, the price surged again, reaching N617 per liter.

However, since then, there have been no additional fuel increments, despite fluctuations in the Naira’s exchange rate. President Bola Ahmed Tinubu, along with key government officials and industry leaders, has reiterated their commitment to stabilizing petrol prices in the country.

According to Ajuri Ngelale, Special Adviser to the President on Media and Publicity, “The President affirms that there will be no increase in the price of petroleum motor spirit.”

Mele Kyari, Group Chief Executive of the Nigerian National Petroleum Corporation Limited (NNPC), echoed this sentiment, emphasizing that NNPC is the sole supplier of petrol nationwide and has not proposed any price hikes.

Industry experts like Chinedu Okonkwo, President of the Independent Marketers Association of Nigeria (IPMAN), have urged the government to expedite efforts in implementing Compressed Natural Gas (CNG) as a viable alternative to traditional fuels, providing a long-term solution to the country’s energy needs.

While the global crude oil price surge is a cause for concern, Nigerians are holding onto the government’s commitment to price stability and the potential for CNG to provide a sustainable energy alternative in the future.

In a market with unique dynamics, where NNPC remains the sole supplier and importer of fuel, the hope is that prices will remain stable for the benefit of all Nigerians.