NNPC/Aiteo JV Launches Nembe Crude Oil Grade, Exports Double 950,000 Barrels

The NNPC/ Aiteo Joint Venture has announced the introduction of Nembe Crude Oil Grade, a new crude oil grade into the international crude oil market. According to a statement signed by Chief Corporate Communications Officer NNPC Ltd, Olufemi O. Soneye, the announcement of the Nembe Crude Oil Blend, produced by Aiteo, the Operator of the NNPC/Aiteo Oil Mining Lease (OML) 29 Joint Venture (JV), was made at the ongoing Argus European Crude Conference in London, on Tuesday. OML 29, an asset located onshore Nigeria, is operated by Aiteo Eastern Exploration & Production Ltd, Africa’s leading indigenous hydrocarbon producer, following a historic acquisition from Shell in 2014. The Nembe Crude was previously blended with the popular Bonny Light grade and exported via the Bonny Oil & Gas Terminal. The unique selling point of the Nembe Crude Oil grade with an API gravity was highlighted by both the Aiteo E & P and NNPC Limited Leadership at the Argus Conference in London. The Nembe Crude Oil grade also has a low sulphur content and low carbon footprint due to flare gas elimination, fitting perfectly into the required spec of major buyers in Europe. Two cargoes of 950,000 barrels each of the Nembe Crude Oil grade have since been exported to France and the Netherlands. With its attractive Assay of API 29 and low sulphur content, the Nembe Crude Oil grade commands a premium to the global Brent benchmark.  With the NNPC-Aiteo OML 29 JV back onstream, Nigeria now boasts of an additional crude oil export of 2 Cargoes at 950,000 barrels each per month and 1.2 Bcf of export gas monthly.  This remarkable achievement signals the commencement of activities at Nigeria’s newest crude oil terminal, the Nembe Crude Oil Export Terminal (NCOET), which was licensed in line with the extant laws and Crude Oil Terminal establishment regulations. The terminal was conceived as a Floating Storage and Offloading Vessel (FSO) with a storage capacity of two (2) Million Barrels and the ability to offload crude oil to any export tanker from AFRAMAX to Very Large Crude Carriers (VLCC). It has a loading capacity of 25,000 barrels per hour and will be exporting over 3.6 million barrels of Crude oil monthly at full scale of operation. Currently, hydrocarbon production from OML 29, which was hitherto constrained due to evacuation challenges owing to the security issues around the Nembe Creek Trunk Line (NCTL) corridor, has now been debottlenecked through a collaborative and creative approach that led to the innovation of the Alternative Crude Oil Evacuation Solution.  The Argus European Crude Conference 2023 in London is a gathering of energy majors, refiners, NOCs, traders, financial institutions, and other representatives from across the global oil markets. The event also provides a critical opportunity for business leaders to connect, discuss, share and learn from one another.

12.5kg Cooking Gas To Hit N18,000 By December —NALPGM

President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGM), Oladapo Olatunbosun has warned that the price of 12.5kg of cooking gas could go as high as N18,000 if the present scarcity persists. According to Olatunbosun, scarcity of the product is biting hard in Lagos and some other states in the country, noting that the scarcity has pushed up the price from the previous N900 per kilogram to as high as N1,400 in Lagos. He stated further that there is no justification for the current increase in refill prices. He said that stakeholders along the value chain were using the foreign exchange rate somersault as a reason to increase LPG prices, adding that 12.5kg refill prices could reach N18,000 by December 2023. “There is a ridiculous hike in gas prices going on right now, and I am afraid that if the federal government does not step in to checkmate the activities of these terminal owners, prices could reach as high as N18 million per metric ton by December. This means that a 12.5kg could go as high as N18,000″. The cost of LPG is tied to the exchange rate between the Naira and the Dollar. As the Naira weakens against the Dollar, it directly impacts the price of LPG. In just a year, the Naira weakened considerably against the Dollar, escalating from N565 to N1040 in October 2023. These shifts affect the price of LPG. Nigeria’s LPG market is supplied by both local production and imports. Local production covers a significant share, and imports bridge the supply gap. Nigeria’s Liquefied Natural Gas (NLNG) contributes about 40 per cent of LPG demand through domestic production. The remaining 60 per cent is imported. The price of a 12.5kg cylinder of cooking gas surged by 26 percent in two weeks to N15,000 from N11,850 owing to high global crude oil and gas prices and Nigeria’s forex crises. This recent surge will further squeeze cash-strapped consumers, erode their purchasing ability and amplify a cost of living crisis in Africa’s most populous nation. It will also accelerate October inflation when the figures are released. The World Bank, in its latest Nigeria Development Update report for June 2023, said the loss of purchasing power from high inflation has increased poverty in the short term, pushing an estimated four million Nigerians into poverty between January – May 2023. The global bank estimates based on the NBS data show that 89.8 million Nigerians fell below the poverty line at the start of 2023, with an additional four million making it 93.8 million in May of 2023.

PetroNor Announces $20m OML 113 Acquisition Deal

PetroNor E&P has announced a binding agreement with New Age (African Global Energy) to acquire New Age’s interests in OML 113 in Nigeria which contains the Aje field. This acquisition not only strengthens the company’s position in OML 113 but also opens up exciting possibilities for future growth in the energy transition and strategic flexibility. According to the agreement, PetroNor will pay New Age $6 million cash plus a deferred future gas production payment up to a maximum of $20 million to acquire New Age’s entities holding a project economic and voting interest in the OML 113 Joint Operation Agreement (JOA) of 32 per cent. Subject to completion, the agreement will not only increase PetroNor’s economic stake but also reinforce the company’s active involvement and influence in the licence partnership plan for the re-development of the Field. PetroNor’s existing position in OML 113 was achieved through the acquisition of Panoro Energy’s Nigeria interests in a transaction which was completed in 2022. The company is working with the OML 113 operator, Yinka Folawiyo Petroleum (‘YFP’), to create a jointly owned company, Aje Production AS, which will hold a project economic and JOA voting interest of 39 per cent. Following completion of these transactions, PetroNor and YFP related entities will have a project economic and JOA voting interest of 71 per cent. The Aje field is estimated to contain recoverable resources of 480 billion cubic feet, BCF of gas, 54 million barrels, mmbbls oil, condensate and LPG. The acquisition of New Age’s Aje interests will increase PetroNor’s net 2C contingent resources in Aje from 27.1 mmboe to 70.1 mmboe. Interim CEO of PetroNor Jens Pace said: “This acquisition is consistent with PetroNor’s commitment to expanding its portfolio while demonstrating shareholder value. Acquiring New Age’s interests represents a big step in achieving the partner alignment necessary to move forward with plans for the re-development of the Aje field. We are excited about the potential value of this gas resource which is located close to major population centres and offers a cleaner source of energy for power generation and industrial use compared to current alternatives.” Completion of the transaction is subject to customary conditions, including regulatory approvals in Nigeria.

Fossil fuel subsidies surge to record $7trn

The International Monetary Fund (IMF) has said that subsidies on fossil fuel surged to a record $7 trillion in 2022. The Fund in its chart of the week, which focused on climate change, said the impact of the Russia-Ukraine war as governments globally supported consumers and businesses as energy prices spiked. As the world struggles to restrict global warming to 1.5 degrees Celsius and parts of Asia, Europe and the United States swelter in extreme heat, subsidies for oil, coal and natural gas are costing the equivalent of 7.1 percent of global gross domestic product. The World Meteorological Organization says July was the hottest month on record. Data shows that fossil-fuel subsidies rose by $2 trillion over the past two years as explicit subsidies (undercharging for supply costs) more than doubled to $1.3 trillion. Consuming fossil fuels imposes enormous environmental costs—mostly from local air pollution and damage from global warming. The vast majority of subsidies are implicit, as environmental costs are often not reflected in prices for fossil fuels, especially for coal and diesel. “If governments removed explicit subsidies and imposed corrective taxes, fuel prices would increase. This would lead firms and households to consider environmental costs when making consumption and investment decisions. The result would be cutting global carbon-dioxide emissions significantly, cleaner air, less lung and heart disease, and more fiscal space for governments. “We estimate that scrapping explicit and implicit fossil-fuel subsidies would prevent 1.6 million premature deaths annually, raise government revenues by $4.4 trillion, and put emissions on track toward reaching global warming targets. It would also redistribute income as fuel subsidies benefit rich households more than poor ones. “Yet removing fuel subsidies can be tricky. Governments must design, communicate, and implement reforms clearly and carefully as part of a comprehensive policy package that underscores the benefits. A portion of the increased revenues should be used to compensate vulnerable households for higher energy prices. The remainder could be used to cut taxes on work and investment and fund public goods such as education, healthcare, and clean energy,” the global lender said.

Current oil output unlikely to change as OPEC meets Friday

The Organization of Petroleum Exporting Countries (OPEC) is not likely going to make any changes to the current oil output policy as tighter supplies and resilient demand drive an oil price rally. Ministers from the OPEC and allies led by Russia, known as OPEC+, meet on August 4 and the panel, called the Joint Ministerial Monitoring Committee, can call for a full OPEC meeting if warranted. Oil has rallied to a three-month high this week above $85 a barrel for Brent crude, as tighter supply and rising demand outweigh concern that interest rate hikes and stubborn inflation could hit economic growth.The Six OPEC+ sources said the Committee would probably not make any changes to existing policy during Friday’s online meeting as one of them cited the rising oil price as a reason to take no action.The OPEC and the Saudi Energy Ministry did not immediately respond to requests for comment on Tuesday.In the latest comments from an OPEC member about the market, the energy minister for the United Arab Emirates told Reuters on July 21 that current OPEC+ actions were sufficient for now and the group was “only a phone call away” if any further steps are needed. The UAE minister sits on the JMMC, which is chaired by Saudi Energy Minister Prince Abdulaziz bin Salman. Still, a surprise cannot be ruled out. The Saudi minister in July said OPEC+ would “continue the effort at surprising markets”. In April, several OPEC+ members announced cuts just ahead of a JMMC meeting that was expected to take no action. At its last policy meeting in June, OPEC+ agreed on a broad deal to limit supply into 2024 and Saudi Arabia pledged a voluntary production cut for July that it has since extended to include August. Analysts told Reuters last week they expected Saudi Arabia to extend the voluntary cut for another month to include September. National Australia Bank said in a report on Tuesday that it expected the Saudis to announce an extension of their voluntary cut at the committee meeting on Friday.