- Indigenous Firms’ Oil Output Drops by 43%
Indigenous oil companies have been worse hit than their foreign counterparts in recent times as they posted steep decline in production last year, according to an analysis of data obtained by our correspondent.
Total oil production from the local firms fell to 46.01 million barrels last year from 80.17 million barrels in 2015, bringing their share of national production down to 6.4 per cent from 10.3 per cent.
Industry experts attribute the drop in output to the disruptions caused by militant attacks in the Niger Delta and the inability of some of the companies to access funds to develop their assets.
Independent and marginal fields companies saw their output drop to 28.99 million barrels last year from 44.06 million barrels in 2015, as monthly average production fell from 3.7 million barrels to 2.4 million barrels.
Production by the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation in charge of exploration and production, declined by 52.9 per cent last year to 17.02 million barrels.
The company’s contribution to national production stood at 2.53 per cent last year, down from 4.65 per cent in 2015, data from the corporation showed.
“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 NPDC re-kitting project and repairs of vandalised facilities,” the NNPC said.
International oil companies saw output from Production Sharing Contracts increased to 325.34 million barrels last year from 323.14 million barrels in 2015, according to the NNPC data.
Prior to the shutdown of the Forcados terminal in February 2016 after the Trans Forcados Pipeline was attacked by militants, the indigenous firms had been hard hit by the persistent low oil prices as their revenues tumbled.
The Forcados shutdown, which lasted for more than a year, piled more pressure on the firms as it impaired their ability to earn revenue.
For instance, Neconde Energy Limited had to resort to the use of barges to export its crude oil after six months of no production, and was only able to produce about 15,000bpd, down from about 52,000 bpd previously.
Seplat Petroleum Development Company Plc said the shut-in and declaration of force majeure at the Forcados terminal by the operator, Shell, saw its average daily production fall from 52,000 barrels of oil equivalent per day as of mid-February 2016 to 25,877 boepd by year end.
The force majeure, a legal declaration that means the operator cannot fulfil a contract due to circumstances outside its control, was only lifted on Tuesday.
According to the NNPC, at Forcados terminal alone, about 300,000 bpd of oil were shut-in following the declaration of the force majeure.
The Vice-President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, described Forcados as a big part of the production of a number of indigenous companies, adding that some of the marginal fields and independent operators bought Shell’s blocks that produced into the terminal.
Waltersmith’s 5,000bpd Modular Refinery in Imo State to Commence Operations
5,000bpd Modular Refinery Built in Imo State to Start Operations
The Department of Petroleum Resources (DPR) has said the 5,000 barrels per day Modular Refinery project built in Imo State is ready for operations.
Sarki Auwalu, the Director, DPR, disclosed this during a pre-commissioning visit to the project site in Ibigwe, Imo State.
In a statement released by Waltersmith, Auwalu was quoted as saying the purpose of his visit was to ensure that the refinery was ready to commence operations.
He said “We can confirm that the refinery is very much ready to commence operations. We have seen all the preparations.
“To us, the plant is alive. The commissioning is just symbolic. Everywhere is ready to start off. My overall assessment is excellent.
“We have been to other modular refineries but we have not seen anything like this – the space, the way it is arranged and the way it will work.”
The 5,000 barrels per day modular refinery is scheduled for inauguration this month. The refinery has crude oil storage capacity of 60,000 barrels and it is expected to deliver more than 271 million litres per year of refined petroleum products.
Auwalu said, “The role we play is to enable businesses and create opportunities. When DPR issues you a licence, it enables you to invest and as a result of that opportunity we create, that business is enabled.
“Waltersmith is one of our success stories. We consider the project as ours. We have been tracking their growth and we are happy to see that our child is growing. It is our plan that they expand and they have the potential.”
Speaking on the project, Abdulrasaq Isah, the Chairman, Waltersmith Refining and Petrochemical Company, said the project is the first phase of a series of refinery projects that will lead to the delivery of up to 50,000 barrels per day in refining products.
OPEC Fund, West African Development Bank Agree to Improve Corporation in West Africa
OPEC Fund and West African Development Bank (BOAD) Agreed to Deepen Corporation in West Africa
The West African Development Bank (BOAD) and the OPEC Fund for International Development have signed an agreement to further deepen their development corporation in the member nations of the Western African Economic and Monetary Union (WAEMU).
The member nations include Benin, Burkina Faso, Côte-d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
According to the statement released by the two organisations, the agreement reached will increase engagement and knowledge-shareing between the two institutions and ensures improved cooporation in terms of co-financing public and private sector projects.
The OPEC Fund and West African Development Bank (BOAD) boost cooperation in Western Africa
The agreement focuses on increased engagement and knowledge-sharing between the two institutions and ensures enhanced cooperation in co-financing public and private sector projects.
It will also support international trade and regional trade integration to enhance economic productivity in the region. It will help mitigate the negative impact of COVID-19 on the region and strengthen the economy of the West African region.
Dr. Abdulhamid Alkhalifa, Director-General, OPEC Fund, who signed on behalf of the organisation said: “We are pleased to grow our partnership with BOAD to work together toward our common cause. West African countries have significant potential to increase trade flows and strengthen competitiveness which will drive growth, reduce poverty, and create new jobs in the region. The OPEC Fund’s global expertise, combined with BOAD’s strong regional presence, positions our two institutions well to help the region to weather the impacts of the pandemic and improve its competitiveness within the global economy.”
Serge Ekué, the President of BOAD, commended “the commitment and growing partnership between Africa and the OPEC Fund, which translated into support to BOAD for several decades now, thereby contributing to growth and sustainable development in the WAEMU member countries.” He added that the implementation of this framework agreement will help support the objectives of BOAD’s new strategic plan for 2021-2025, with the “aim of increasing the impact of its operations in terms of development outcomes by funding productive investments and creating jobs for youth and women, while focusing on micro-, small- and medium-sized enterprises (MSMEs), transport infrastructure and digitalization, agriculture and food security, energy, real estate, health and education.”
More Stimulus is Welcomed – But What’s Needed is Smarter Stimulus
Stock markets are cautiously upbeat that a stimulus package can be agreed in the U.S. before the November 3 election – but even if it does happen, it’s likely to be a “short-lived sticking plaster” that masks the major long-term issue: unemployment.
This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.
It comes as House Speaker Nancy Pelosi and Secretary Steven Mnuchin spoke again on Tuesday – the deadline imposed by the Speaker – as the two sides try and strike a deal over another significant fiscal stimulus package ahead of the election.
Earlier this month, Republican senators slammed a $1.8 trillion offer made by the Trump administration to the Democrats as too big, an offer Ms Pelosi dismissed as “insufficient.”
Discussions are due to continue on Wednesday upon the Secretary’s return to Washington.
Nigel Green warns: “No doubt, a breakthrough of the deadlock that would allow for more stimulus would provide a lifeline to millions and millions of Americans.
“U.S. and global markets are, generally, cautiously optimistic that a deal can be agreed by the two sides.
“There’s a sentiment that something will have to materialize – and this is fueling markets.
“However, the window of opportunity is closing and it is not yet a done deal.
“If talks collapse, the markets will inevitably be disappointed and there’s likely to be a short-lived sell-off.”
He continues: “Even if Pelosi and Mnuchin can get another massive stimulus package agreed, and U.S. and global markets rise, this is likely to serve only as a sticking plaster.
“A market rally is going to be difficult to be sustained due to the enormous uncertainty created by other factors including the presidential election, a possible looming constitutional crisis in the world’s largest economy, and the growing Covid-19 infections in America and other major economies.”
The deVere CEO goes on to add: “Getting over the political impasse would help boost the economy and deliver much-needed money to Americans, but the major, lasting issue triggered by the pandemic remains: mass unemployment, which will hit demand, growth and investment.
“As such, a swift rebound for the U.S. economy is doubtful as unemployment claims continue to rise.
“That V-shaped recovery talked about by so many? That will be impossible with so many millions facing long-term unemployment.”
Whilst it is certainly positive that unemployment has fallen from 15% in the U.S. to 11% in recent weeks, it should be remembered that this is still at the same rate of the 2008 crash.
In addition, a second wave of soaring unemployment could hit imminently as some support measures wind-down and business’ and households’ savings and resources have been already run-down.
Mr Green concludes: “Near-term support for sure, but a long-term strategy – a multi-year vision – for growth and investment is essential.
“What’s needed is not just more stimulus, but smarter stimulus.”
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