Subsidy: 7 challenges before Nigeria

 

– Petrol deregulation to affect other sectors of the economy

– The IMF, World Bank roles

– Experts list what to expect from President Buhari

As expected, Nigeria will remain tensed in the coming days. This is because of the sudden reality that the government would not renege in its decision to liberalise the premium motor spirit, also called petrol.

With the announcement on Wednesday by Emmanuel Ibe Kachikwu, the minister of state for petroleum, Nigerians should be prepared for the following:

1. Protests The decision to deregulate petrol has torn Nigeria into those for and those against the removal of subsidy. On social media, those who are angry have begun mobilisation for a re-enactment of the 2012 #occupyNigeria which almost claimed the country. Share on Facebook Share on Twitter An oil refinery. Surprisingly however, most of those who partook in the 2012 edition may not likely be active this time. REFINERY

2. Increased agitation by organised labour The time has come for the Nigeria Labour Congress and the Trade Union Congress to consolidate on their agitation for an increment in the minimum wage of the country’s workers. READ ALSO: Subsidy removal: Buhari, APC get new names from Fayose Currently the minimum wage is N18,000 and labour recently demanded for N56,000, an amount the government says it is still considering.

 

3. Commendation from IMF, WORLD BANK The duo of the International Monetary Fund (IMF) and the World Bank may have won in the call for Nigeria to carry out full deregulation sector as well as remove subsidy.

 

4. Sale of refineries Nigeria has four refineries which have gulped billions of dollars in maintenance, yet have not met expectation. It has always been sad news of low output. As reported, Kachikwu says Nigeria is currently speaking with Total, Chevron and Agip to see how a partnership deal could be struck concerning the refineries.

 

5. Passage of petroleum industry bill With the deregulation of premium motor spirit, the National Assembly could now be motivated to pass the petroleum industry bill to now give total deregulation to the sector.

 

6. Naira devaluation Did you just say it is not possible? In Nigeria, anything is. After all, President Muhammadu Buhari, in 2015, argued that it was not the best to increase pump price because it would affect other sub-sectors of the economy. READ ALSO: Fuel price increase: Omokri criticises Buhari, Osinbajo He has also constantly argued that there was no serious reason to devalue the naira, but Nigeria is currently facing two-digit inflation and the citizens are not smiling.

 

7. Delayed economic recovery Though Kachikwu has promised that the price of petrol would stabilise in about six months, many still believe that the economy will take time to recover, especially with a president who believes in ‘slow and steady’. NAIJ.com had earlier reported that the announced removal of subsidy on the premium motor spirit, popularly called petrol, on Wednesday, may end up becoming a re-enactment of the January 2012 #occupyNigeria, as some agitated citizens have commenced a new campaign to have it repeated against the government of President Muhammadu Buhari. With the removal of subsidy on the product, the government fixed N145 as the maximum amount to be charged per litre on petrol and while some Nigerians are mobilising on social media for mass protest, the Trade Union Congress (TUC) thinks the fuel price hike was a coup against organised labour.

Read more: https://www.naij.com/828855-7-challenges-nigerians-will-face-petrol-deregulation-begins-no-6-will-affect-everybody.html

Nigeria to begin exploratory oil drilling in Chad Basin by October – NNPC

 

nnpc

 

Nigeria plans to begin exploratory drilling in search of oil in the northeastern Chad Basin region by October, the head of the state oil company has said.

Emmanuel Ibe Kachikwu, who last year said Africa’s biggest crude exporter may be on the verge of a significant oil find in the Lake Chad area, said in a statement on Sunday that seismic studies were ongoing.

“Drilling activities will commence by the last quarter of 2016,” the Nigerian National Petroleum Corporation (NNPC) chief, who is also minister of state for oil, was quoted as saying in the statement issued by the state oil company.

Africa’s biggest economy has been hit hard by the sharp fall in global oil prices because it relies on crude exports for around 70 percent of government revenue.

NNPC spokesman Garba Deen Muhammad said exploration in the region was intended to “add value to the hydrocarbon potentials of the Nigerian inland basin, provide investment opportunities, boost the economy as well as create millions of new jobs”.

 

 Source: http://www.financialwatchngr.com/2016/05/03/nigeria-begin-exploratory-oil-drilling-chad-basin-october-nnpc/

Pipeline Vandalism: The imperative of a new strategy

Pipeline vandalism remains an intractable challenge to the Ni­gerian oil and gas dependent economy. Coming at a time when global crude oil price is still on its downward spiral, these acts of sabo­tage spell doom for Nigeria’s already troubled economy.
In a statement made available to the media, Governor Ifeanyi Okowa of Delta State had lamented that “these attacks should be condemned by all well-meaning Nigerians, par­ticularly compatriots from Niger Del­ta. This is an attack on our soul. The state is bleeding again and its impli­cation for the economy and image of Delta State is grave”, he said.
The governor recalled the stake­holders’ summit on the effects of the vandalism of oil and gas facilities in the state, where the various arms of the security agencies, the oil and gas operators and the host communities converged to brainstorm on meas­ures to stem the activities of vandals.
Thousands of people, including suspected vandals, have been roasted to death along the Nigerian Nation­al Petroleum Corporation (NNPC) pipelines in various parts of the coun­try. One of the most deadly of those blasts occurred on October 18, 1998, when an NNPC pipeline exploded in Jesse, caused by thieves trying to break open the pipeline in order to siphon oil. The blast killed hundreds within hours, destroying surrounding farmlands and villages. But here are a few facts about this nefarious and un­patriotic but booming business.
Pipeline vandalism is one major reason why the refineries will not work. Finished products pumped from the refineries leak through com­promised pipelines into the waiting vessels of pipeline vandals, a thriv­ing business, which costs the coun­try over N150.5 billion annually.
The NNPC recently provided graphic details of how the activities of pipeline vandals have complicated the free flow of petroleum products and crude supply in its pipeline sys­tem leading to a colossal cost of over N174.57 billion in product losses and repairs of products pipelines within the last 10 or 15 years.
According to the Corporation, the combined working capacity of all the 21 Pipelines and Product Marketing Company (PPMC) depots nation­wide, excluding holding capacities at the refineries, can provide products sufficiency of up to 32 days for pet­rol, 65 days for kerosene and 42 days for diesel, but regrettably, the activi­ties of the pipeline vandals have made it impossible for the facilities to func­tion, full blast.
The data provided by the compa­ny also showed that a total of 16,083 pipeline breaks were recorded with­in the last 12 years. While 398 pipe­line breaks representing 2.4 per cent were due to ruptures, the activities of unpatriotic vandals accounted for 15,685 breaks thus translating to about 97.5 percent of the total num­ber of cases.
Records show that the System 2E/2EX which conveys products from the Port Harcourt refinery to Aba-Enugu-Makurdi depots on­wards to Yola-Enugu-Auchi appears to be the haven of pipeline vandal­ism in the country particularly the Port Harcourt-Aba/Isiala-Ngwa axis.
Similarly, System 2A product pipe­line route, which conveys products from Warri-Benin-Suleja/Ore depots ranks second on the scale of pipeline break points with 3,259 cases repre­senting about 20.2 percent of the total volume of products pipeline breaks in Nigeria.
The figure also came with a loss of over N20.39 billion in products and pipeline repairs, while System 2B which carries products from the Atlas Cove-Mosimi-Satelite-Ibadan-Ilorin depots recorded 2,440 breaks leading to a loss of over N73.6 billion in prod­ucts and pipeline repairs.
On gas, NNPC said that the in­cessant attack on the Trans Forcados Pipeline (TFP) has rendered it out of service since May 2009 thus making it impossible to evacuate crude oil/ con­densate from some Shell operated fa­cilities. Currently over 300,000 bpd and 140mscfd is deferred and about 55 vandalized points so far repaired at a cost of N11 billion.
The personnel cost of pipeline vandalism is no less grim. NNPC and PPMC have lost personnel, in­cluding engineers, while trying to re­pair pipelines damaged by the van­dals. This nefarious act is the reason petroleum tankers come to Lagos to ferry fuel from the Atlas Cove to up­country consumers, causing major traffic challenge in the city.
Pipeline vandalism is also one ma­jor reason for the sustenance of the fuel subsidy regime.
Curbing pipeline vandalism is very essential in resuscitating the nation’s ailing refineries by ensuring ease of petroleum products transportation to local depots, eliminating importation and crashing fuel prices.
According to NNPC, Nigeria los­es about 150,000 barrels of crude oil to pipeline vandalism every day. At the current oil prices, this translates to about $6.5 million daily.
To address this problem, govern­ment must begin to explore more cre­ative ways of managing its extensive network of pipelines. It is evident that the security of the pipelines cannot be achieved by the use or threat of the use of force. This strategy has prov­en itself ineffectual over the years. A viable alternative therefore, is the in­tegration of indigenous oil and gas companies, with the requisite ca­pacity, into the pipeline manage­ment system. From experience, the international oil companies (IOCs), which have dominated the industry for a long while, do not understand the local terrains, with their attendant social, economic and cultural ma­trix, the way their indigenous coun­terparts do. Since he assumed duties last year, the Minister of State for Pe­troleum, Dr.Ibe Kachikwu, has been working to address the key issue of vandalism, which is closely associat­ed with the issues of petroleum prod­ucts scarcity.

Nigeria Targets 2030 to End Gas Flaring

flaring

The Federal Government will soon sign a global agreement on zero routine gas flaring that is targeted at ending flaring in 2030.

Speaking at the opening of the African Petroleum Congress and Exhibition (CAPE VI) organized by the African Petroleum Producers Association (APPA) yesterday in Abuja, President Muhammadu Buhari, hinted that there were efforts at reducing gas flare through Joint Venture Contracts that would expand infrastructure and deploy Liquefied Natural Gas (LPG) for domestic and industrial uses.

Buhari, who spoke through Vice President Yemi Osinbajo, decried huge amount of gas that is flared yearly.

His words: “In processing Africa’s hydrocarbon resource, environmental issues must be accorded huge priority. Globally, over 150 billion cubic meters of associated gas is flared annually; of this figure, Africa flares an estimated 40 billion cubic meters annually. In Nigeria, gas flaring amounts to about 23 billion cubic meters per annum; in over 100 flare sites constituting over 13% of global gas flaring. Nigeria is a member of the World Bank Global Gas Flaring Reduction (GCFR) Partnership and with the support of our legislature; we will sign the United Nations Agreement of ‘Zero Routine Flaring by 2030’ although our national target is 2020. I urge all APPA member countries to set realistic targets for gas flare-out in the region.”

The president noted that ending gas flaring on the continent would require joint efforts of all the countries especially the oil-producing ones.

He emphasized the need for all African countries to take further stand against gas flaring, especially as about 40 trillion Standard Cubic Feet (SCF) of gas that is flared daily in the continent, with Nigeria accounting for half of that amount.

“My challenge is for APPA member countries to develop ingenious ways of promoting value addition and investment through sustainable policies in local content.

A common approach to local content will ensure that the whole of Africa benefits from economies of scale associated with our vast resources,” he stated.

The president further maintained that African countries must put in place the right mechanisms to expand the region’s refining capacity, adding that African oil and gas countries have no reason to remain tied to the apron strings of other oil producing countries.

He was also of the opinion that the gathering provides a very unique opportunity for Africa to look beyond the exploitation of oil and chart a new course in the use of other natural resources to upscale national revenues.
Instead of focusing on the negative side of the downward slide in oil prices, the president maintained that the current volatility in the oil sector allows lessons to be learnt, synergies to be built and new approaches to be adopted to enable Africa to expand its economy, infrastructure, manpower-base, maintain domestic and regional peace and protect the environment.

He insisted that the use of gas in Africa’s future energy mix has become imperative if the continent must meet her future energy needs and urged African countries to enter into partnership with Nigeria in this regard.

He added: “The issue of the development of a robust gas infrastructure must be jointly addressed. Currently Nigeria has the 7th largest gas deposit in the world and the highest quality rich in liquids and low in Sulfur. Reserves are put at over 185 Trillion Cubic Feet (TCF) and undiscovered reserves estimated at 400 TCF with a capacity to peak to 600 TCF. The Nigeria Gas Master Plan and the Gas-to-Power-Initiative clearly exemplifies the focus of our nation. I invite all APPA member countries to enter into profitable partnerships in natural gas business with Nigeria.”

He also hinted that Nigeria would continue to pursue focused renewable energy initiatives through prudent management of resources under a bio-fuel programme for the production of fuel-ethanol and bio-diesel.

“The resulting ‘Green Gasoline’ will reduce the volume of carbon dioxide released into the atmosphere, improve air quality and ultimately reduce global warming and its catastrophic consequences. This renewable energy initiative will not only help the Nigerian economy but will also assist other APPA Countries to create jobs,” he said.

On refining capacity on the continent, the President challenged African Ministers of Energy to further explore cooperation mechanisms to expand regional refining capacities in an efficient and cost-effective manner, saying, “let me assure that Nigeria is ever-ready to provide support in manpower development through the Federal University of Petroleum Resources, Effurun and the Petroleum Training Institute, Warri.”

In his intervention, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu said while collaboration was key, African governments must develop a policy that would make backward integration a speedy possibility.

“It is a new dawn for Africa and we are excited about the development. We will continue to work collaboratively because there is a lot happening in the space but also a lot of challenges that we have to overcome.

A major challenge is funding. Obviously skillsets are there already and technology is not an issue but funding remains key. Policies are also key because African governments have to develop policies that will enable backward integration into their own systems”, Kachikwu said.

 

Source: AllAfrica – http://allafrica.com/stories/201603151132.html

Ofserv Nigeria Limited achieves ISO Quality Management System Certification; a demonstration of unwavering commitment to process improvement

Lagos, Nigeria – November 30, 2015 – Ofserv Nigeria Limited is pleased to announce that it has received the ISO 9001:2008 certification for quality management system from the Standards Organization of Nigeria (SON).

ISO 9001: 2008 standard is accepted worldwide as a quality standard that provides the necessary framework for improving efficiency, minimizing risk and maximizing opportunities.

To be awarded the certification, our quality management system passed through a strict auditing procedure, where it demonstrated that its services successfully meets the applicable statutory and regulatory requirements.

What Does ISO Certification mean to us

  • Our achievement of the certificate is a proof that our services meet international standards and also a testament of our strict adherence to the ISO 9001:2008 standards
  • It’s an assurance of our conformity to customers’ requirement; the award would also aid in steering us toward enhancing our customer satisfaction.
  • It also signifies our willingness to continually improve our system via effective application of the system.

“ We are pleased to have achieved this certification, a demonstration of our commitment to a strong culture of quality “ said Dimeji Bassir, CEO of Ofserv. “ We are determined to continue to refine our quality system so that we can keep providing quality services to our clients in the oil and gas industry” he concluded.

About Ofserv

Ofserv is an integrated energy company organized to harvest opportunities across the E & P value chain.
Formed in 2008, Ofserv commenced operations in 2010 providing innovative and cost effective solutions within the upstream sector of the Energy industry.
Our strategy centers on employing creative solutions that accelerate field development as well as enhance our client’s operational efficiencies. With a deep understanding of the benefits of full commercialization of Oil & Gas fields, we are uniquely positioned to help maximize value and returns to asset owners.

Ofserv principals including its advisors draw on over 100 years of combined, world class Oil & Gas industry experience relevant to Africa. Our core competencies are in two broad based functional categories: Drilling & Facilities Maintenance, within which we provide an array of technical and consulting services.

For more information, visit www.ofserv.com

Shell sells more U.S. gas assets, adds acreage in Pennsylvania, Ohio

2410N.Shell-Logo

Royal Dutch Shell on Thursday announced the sale of two onshore U.S. shale gas assets in exchange for $2.1 billion and acreage in different gas-rich areas as the energy company restructures its North America business and reins in costs.

Shell agreed to sell to Ultra Petroleum its relatively mature natural gas-producing properties in Wyoming’s Pinedale field, a total of 155,000 acres, in a step which will mark its complete exit from one of its first U.S. shale investments in 2001.

Ultra will pay Shell $925 million in cash and give it acreage in the oil and gas-rich Marcellus and Utica fields in Pennsylvania and Ohio, respectively.

The Anglo-Dutch company will also sell its 107,000 acre Haynesville field in north Louisiana for about $1.2 billion in cash to Dallas, Texas-based explorer Vine Oil & Gas LP and its partner, investment fund Blackstone Group LP.

“We continue to restructure and focus our North America shale oil and gas portfolio to deliver the most value in the longer term,” said Marvin Odum, Shell’s Upstream Americas Director.

In the second quarter of 2014, Shell produced 190 million cubic feet per day (mcf/d) of natural gas from Pinedale. The Haynesville gas production reached 700 mcf/d as of July 1, Shell said.

Shell, like many other global oil companies, is carrying out a broad cost-cutting drive aimed at boosting profits. Chief Executive Ben van Beurden is seeking to offload $15 billion-worth of assets by the end of 2015, including in North America.

The company has focused on selling gas assets where development costs are high while revenues are relatively low compared with the oil sector, especially as natural gas prices around the world have dropped sharply this year.

Shell’s shares were up 0.73 percent at 1448 GMT.