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We Paid $4.3bn to Nigeria in 2017 – Shell

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Shell
  • We Paid $4.3bn to Nigeria in 2017 – Shell

Royal Dutch Shell’s payment to the Nigerian government for its activities in the county last year rose to $4.32bn, about 19 per cent higher than what it paid in 2016.

Shell, in its ‘Report on Payments to Governments for the Year 2017’ released on Monday, said it paid $3.197bn to the Nigerian National Petroleum Corporation for production entitlement, up from $2.172bn in 2016.

The oil major said $765.526m was paid to the Federal Inland Revenue Service in taxes, down from $1.18bn in 2016.

It stated that $160.71m and $239,189 were paid to the Department of Petroleum Resources in royalties and fees, respectively, compared to $245.769m and N34.24m, respectively in 2016.

Shell said it paid N79.675m to the Niger Delta Development Commission in fees last year, compared to $125.14m the previous year.

The report showed that out of 29 countries, Nigeria received the highest payment from the oil major.

The oil major, in its 2017 Sustainability Report, said crude oil theft from Shell Petroleum Development Company of Nigeria Limited Joint Venture’s pipeline network amounted to around 9,000 barrels of oil per day last year, an increase from around 6,000 bpd in the previous year.

It stated, “The increase in 2017 can in part be explained by the militant-induced shutdown of the Forcados export terminal in 2016, which reduced opportunities for third-party interference.

“This demonstrates that continued air and ground surveillance as well as the action by the government security forces remain necessary to prevent crude oil theft. Since 2012, SPDC has removed more than 950 illegal theft points.”

According to the report, the number of operational spills from Shell companies in Nigeria increased from eight in 2016 to nine in 2017, but the volume of oil spilled in operational incidents decreased to 100 tonnes compared to 300 tonnes in 2016.

Shell said the number of sabotage-related spills in 2017 increased to 62 from 48 in 2016.

It added, “Theft and sabotage caused close to 90 per cent of the number of spills of more than 100 kilograms from SPDC JV pipelines, with the balance being operational spills.

“In 2017, 92 sites were remediated and certified (out of 251 identified for this work), with 32 in Ogoniland. During 2017, 84 new sites requiring remediation were identified, of which eight are in Ogoniland. In total, there are 243 oil spill sites that require remediation.”

The oil major said close to 80 per cent of gas flaring from Shell-operated assets in 2017 occurred in Iraq, Nigeria, Malaysia and Qatar.

“Our flaring increased by slightly less than 10 per cent from 7.6 million tonnes in 2016 to 8.2 million tonnes in 2017. This was primarily a result of increased production in Nigeria following the return to production of fields previously closed due to security issues. Work continues to bring additional gas gathering facilities online in Nigeria to reach our goal of no routine flaring by 2030,” it said.

Shell noted that several new gas-gathering projects came on stream at the end of 2017 in Nigeria but the planned start-up dates for two projects had historically been delayed due to a lack of adequate joint-venture funding.

“Nevertheless, with funding now restored, the projects are planned for completion in 2018-2019,” it added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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Economy

Citigroup Sees $60 Per Barrel Crude Oil in the Next 12 Months

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Citigroup Says Crude Oil Will Reach $60 Per Barrel in a year

Despite the current economic downturn and the projected second phase of COVID-19, Citigroup, a New-York based financial service company, has said oil price could hit $60 per barrel in the next 12 months.

Citigroup disclosed this on Thursday during a virtual EMEA Media Summit titled – ‘Navigating the Future: What’s Next in a Post-COVID-19 World’.

“After a substantial underperformance in the last six months relative to several other commodities, crude will eventually bounce back to around $60 per barrel over the next 12 months,” Max Layton, European Head of Commodities Strategy, Citigroup said while giving a presentation on the outlook for commodities in the second half of 2020, and into 2021.

This means Brent crude oil would rise by at least 50 percent from the current level of $42 per barrel in the next 12 months.

“It’s going to be a function of the demand and supply but recently we have been seeing a spike in the demand for some of the commodities,” said Atiq Rehman, Head of EMEA Emerging Markets, Citigroup.

“A lot of these economies are heavily commodity-dependent, and perhaps, in the past have been guilty of not diversifying when they come under pressure. I think perhaps, this recent moves will push them to diversify away from simply commodities,” Grant Carson, Head of TRUK And Non-Presence Countries, Citigroup, stated citing Russian as one of the countries that have recorded success in diversifying away from crude oil.

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Oil Sustains $42 Price Level as OPEC Output Drops to Over Two-Decade Low

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OPEC Oil Output Drops to Over Two-Decade Low in June

Crude oil sustained $42 per barrel price level following a recent survey conducted by Reuters that showed the Organisation for the Petroleum Exporting Countries (OPEC) managed to cut oil production to over two-decade low in the month of June.

According to the survey, OPEC’s 13 members pumped 22.62 million barrels per day in June, 1.92 million barrels per day below May’s revised figure. The lowest since May 1991.

OPEC and allies, together referred to as OPEC plus, had agreed to cut oil production by 9.7 million barrels per day in the month of April to rebalance the global oil market and prop up prices amid COVID-19 pandemic.

OPEC’s share of the 9.7 million barrels per day production cut was 6.084 million bpd but OPEC delivered 6.523 million bpd cut in the month of June despite the inconsistencies from Nigeria, Angola and Iraq.

In June, Saudi Arabia reduced production by 1.13 million barrels per day to 7.53 million bpd. While Kuwait and the United Arab Emirates met their quota but struggle to fulfill the extra cuts.

Nigeria, Iraq and Angola continue to struggle in the month of June. However, their performance improved compared to May as Nigeria attained 77 percent compliance level, up from 19 percent in May.

While Iraq and Angola achieved 70 percent and 80 percent compliance level, respectively. Nigeria and Iraq have pledged to cut more in July despite their economic challenges. Angola, however, said it would not be able to cut extra oil production until October.

Brent crude oil, against which Nigerian oil is measured, rose to $42.48 per barrel on Friday as at 2:58 pm Nigerian time.

UKOilDaily

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Nigeria Labour Congress Says No Fuel Increase Amid COVID-19 Pandemic

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No Fuel Increase During COVID-19 Pandemic, Says Nigeria Labour Congress

The Nigeria Labour Congress (NLC) on Thursday rejected the new fuel price announced by the Petroleum Products Price Regulatory Agency (PPPRA) on Wednesday.

In a statement issued by Ayuba Wabba, the President, NLC, the labour demanded instant reversal to the old price, saying the move will kill businesses and worsen the nation’s poverty level at a time when nations are looking to ease economic burden of their citizens and mitigate negative impacts of COVID-19.

The PPPRA had raised the value band of Premium Motor Spirit, commonly referred to as Petrol, to between N140.80 and N143.80 per litre on Wednesday because of the recent increase in crude oil prices.

Nigeria Labour Congress argued that “PPPRA contradicted itself when it said that the latest price increase described as an “advisory” was meant to regulate a product that government claims had been de-regulated.

“That this new hike in the pump price of petrol was announced without the approval of the board of the PPPRA and the oversight ministry speaks volume of the arbitrariness and public contempt in the operations of PPPRA. We find this deeply disturbing.

“It is also very embarrassing that the PPPRA boss, while trying to defend the indefensible, appeared to be out of sorts and ready to clutch at any available straws to sell his ice block merchandise to Eskimos.

“Apart from contradicting himself that PPPRA is still trying to regulate a deregulated product through ‘advisories’, the PPPRA went on to exert more nails on the coffin of his polemics when he argued that PPPRA was just like the Central Bank of Nigeria, CBN, and the National Insurance Commission, NAICOM, that would always act to protect the public interest.

“That was how far the niceties went. The rest of the statement by the PPPRA boss was about how PPPRA plans to protect investors and increase their profit.”

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