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.
NNPCL Working With NEITI, Others To Reconcile NEITI’s 2021 Report
The Nigerian National Petroleum Company Limited (NNPCL) will continue to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI) and all relevant stakeholders in the Reconciliation Committee set up by President Bola Tinubu to investigate, review and reconcile the financial records on alleged indebtedness to the Federation by both NNPC Limited and Federation Accounts Allocation Committee, FAAC. A statement signed by Chief Corporate Communications Officer NNPC Limited, Olufemi O. Soneye, on Monday night in Abuja, said, this comes on the heels of calls by a non-governmental organisation for a probe of several monies allegedly owed to the Federation by the national oil company. NNPC Ltd states that the claims by the NGO were baseless, considering the fact that NEITI itself had dismissed many of the allegations in the said 2021 report, following a series of engagements with NNPC Ltd. NNPC Ltd had severally explained that at the outset of President Bola Ahmed Tinubu’s administration, it was made to sell Premium Motor Spirit (PMS) imported into the country at one third of its value, a development that gave rise to an average of N400bn monthly subsidy bill, which subsequently put a strain on its revenues and finances. NNPC Ltd further stated “that subsidy bill accumulated to N3.736 trillion as of May 31st 2023.” The oil company said that the non-payment of NNPCL’s share of upstream joint venture gas supplied to the government-owned plants had led to the accumulation of indebtedness of N174.07 billion by the Federation. “Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of 31st May 2023 amount to $712million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account. “While the Federation owed NNPCL the sum of N 4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties and Petroleum Profit taxes (PPT). “We would like to also use this opportunity to clarify that over the years, our relationship with NEITI has been very cordial, as seen in August 2020 when we became an EITI supporting company in 2020, joining a group of over 65 extractives companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations. “Indeed, aside being a signatory to several EITI’s global ethics and standards, NNPC Ltd had on the sidelines of the United Nation’s General Assembly (UNGA) in Washington DC, in September this year, signed up to the United Nations Global Compact on human rights, labour, environment, and anti-corruption, thereby becoming the first state-owned oil company to join the global initiative,” it said. The state oil company averred that it’s book remains open as it remain committed to delivering value to Nigerians with integrity and as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company.
Kaduna Refinery Ready By Q4 2024, Lokpobiri Assures
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has revealed that the ongoing quick-fix project at the Kaduna Refinery and Petrochemicals Company Limited, KRPC, will be back on stream by the end of 2024. The Minister disclosed this during an inspection tour of Kaduna Refinery & Petrochemicals while assessing the progress of work on the ongoing quick-fix project of the Refinery in Kaduna on Saturday. A statement signed by the NNPC Limited management on its official X handle, formerly Twitter, Lokpobiri said he is confident that the refinery will be restreamed by the end of 2024, considering the “significant level of progress” he has witnessed on the tour. The Minister, who observed that he would continue to hold key players involved in the rehabilitation process of the nation’s refineries accountable, also pledged Federal Government support in ensuring the timely delivery of the project. According to the Minister, there is an urgent need to get the refinery back on stream for the nation’s economic prosperity and energy security, which are both paths to sustainable development. Speaking earlier, Group Chief Executive Officer of NNPC Ltd., Mele Kyari, reassured the minister that the fuel plant at the refinery will be delivered by the end of 2024. Kyari said that all hands are on deck to bring the refinery back on stream, stressing that the contractor has since mobilized to the site and the needed equipment for the quick-fix activities is already in place. “We are very confident that we will get the appropriate financing to get to the end of it, and ultimately, we will start to deliver value to Nigerians again. We plan the quick fix for 60,000 barrels per day so that we can start making money from this plant and we can continue the other part of the refinery to bring it up to its full-fledged capacity. This will also tally with the completion of the Build, Operate, and Transfer (BOT) on the pipeline so as to have a reliable pipeline delivery infrastructure,” the GCEO stated. The inspection tour, which was preceded by the 14th refineries rehabilitation steering committee meeting, also had in attendance NNPC Limited’s Executive Vice President, Downstream, Adedapo Segun; Executive Vice President, Upstream, Oritsemeyiwa Eyesan; Managing Directors of the three refineries; and a host of other members of the Committee.
Global Energy Supply: IEA Forecasts 73% Drop In Fossil Fuels’ Share
The International Energy Agency (IEA) has projected that fossil fuels’ share in global energy supply would drop to 73% by 2030 and carbon dioxide emissions peaking by 2025. This is despite the fact that global oil demand would peak this decade at about 102 million barrels per day (mbd) for two more decades. The agency, in its latest ‘World Energy Outlook (WOE) 2023’ report stated that the drop in fossil fuel share in the global energy market had remained at around 80% for decades. According to the IEA’s Stated Policies Scenario (STEPS) data, from 2030, oil consumption will begin a slow decline by decreasing by more than four million barrels per day to 97.4mbd in 2050, the IEA said. The report further predicted that in 2030, clean technologies would play a “greater role than today” as electric cars on the road worldwide will increase by 10 times, and renewables’ share of the global electricity mix will be near 50%, up by 30% while heat pumps and other electric heating systems will outsell fossil fuel boilers globally, and investment into new offshore wind projects will be three times more than new coal and gas-fired power plants. Commenting on the report’s findings, Global Net-Zero Transformation Advisory Operations Manager, EcoAct, Lindsay Ventress, said: “The World Energy Outlook 2023 underscores the increasingly narrow path toward preserving the goal of 1.5°C warming, yet provides hope that this remains attainable if we promptly embark on transformative climate actions. “The report’s call for an annual twofold increase in energy efficiency improvements underscores its critical role in a sustainable future, but also the current failure of legislators to get to grips with this vital requirement. In light of this, businesses cannot afford to merely wait for government commitments; they must become catalysts for progress,” she added. Even so, the IEA maintained that demand for fossil fuels was set to remain “far too high” to limit the global rise in temperatures to 1.5°C, as per the Paris Agreement. The agency further warned that despite the impressive growth in clean energy, if the policies are not changed, global emissions would remain high to push the temperature limit by around 2.4°C this century. The STEPS also estimates a peak in energy-related carbon dioxide emissions in the mid-2020s. Speaking on the report’s findings, the IEA Executive Director, Fatih Birol, explained: “Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.” According to the report, the tense situation in the Middle East “is a reminder of hazards in oil markets a year after Russia cut gas supplies to Europe”. In the STEPS, the share of seaborne crude oil trade from the Middle East to Asia rises from around 40 per cent to 50 per cent by 2050. The WOE highlights the fears in the natural gas markets due to instability and price hikes after Russia cut supplies to Europe while also foreseeing a surge in new liquefied natural gas (LNG) projects from 2025, with the prospect of adding more than 250 billion cubic metres per year new capacity by 2030, representing 45% of the current global LNG supply. While some of the immediate pressures of the global energy crisis have eased due to the current geopolitical situation and the global economic developments, the IEA drew attention to the “unsettled” global energy market, noting that “this underscores, once again, the frailties of the fossil fuel age and the benefits for energy security as well as for emissions of shifting to a more sustainable energy system.” It stated that developing economies had been experiencing the largest increase in demand for energy services as the extreme volatility in energy markets have pushed for an “affordable, reliable, and resilient supply”.
DisCos Record 95.21% Market Remittance In Q2 2023 –NERC
The Nigerian Electricity Regulatory Commission (NERC) has stated that electricity distribution companies (DisCos) recorded 95.21 percent market remittances in the second quarter of 2023. This represents the highest remittance by the distribution companies so far. The Commission, in its just published ‘Electricity on Demand; report, on Tuesday, indicated that the combined upstream bill that DisCos were expected to pay totaled N194.69 billion, comprising N154.04 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) and N40.65 billion for transmission and administrative services facilitated by the Market Operator (MO). Out of this amount, the DisCos remitted a total of N185.36 billion (N152.48bn for NBET and N32.88bn for the MO), leaving an outstanding balance of N9.32 billion, representing a remittance performance of 95.21 per cent in Q2 2023 compared to the 67.43 per cent recorded in the previous quarter. Industry analysts believe that the improved remittance by the DisCos in the quarter indicates that they did better in fulfilling their financial obligations to NBET and MO, ensuring a higher percentage of payments made in relation to the total amount due. On revenue generation, the report indicated that the DisCos collected a total of N267 billion in revenue in Q2 2023 reflecting a collection efficiency of 75.54 per cent for the quarter out of the total billing value amounting to N354.61 billion. The Commission reported that the improved revenue generation capacity showed an improvement of 6.79 per cent when compared to the first quarter of 2023, when the collection efficiency stood at 68.75 per cent. The NERC linked the boost in collection efficiency to two main factors, namely the increased metering of consumers, which ensured a more accurate measurement of electricity consumption, as well as the DisCos’ sundry collection campaigns targeting pre-paid customers, which encouraged timely and complete remittances. The report further said that the ATC&C loss stood at 38.41 per cent and comprised technical and commercial losses of 18.47 per cent and collection losses of 24.46 per cent. Even then the ATC & C loss still reflected an improvement, as it decreased by 7.98 percentage points when compared to the 46.39 per cent loss recorded in Q1 2023.
Fuel Scarcity Returns To Lagos Amid Increased Pump Price
Fuel scarcity has made a troubling return to Lagos and its surroundings, as numerous oil marketers have closed their outlets, leaving motorists and consumers in a lurch. Last week, a similar issue was reported in Abuja, attributed by oil marketers to poor road conditions and the soaring cost of diesel for distribution. However, recent observations over the weekend have revealed that both independent and major oil marketers have halted operations, leaving the responsibility of serving customers in most parts of Lagos to NNPC Limited, the only remaining importer of the product. This scarcity has persisted despite fuel deregulation, as other operators have struggled to import petrol due to market instability and a lack of foreign exchange. The informal exchange rate has reached over N1,000 per dollar, compounding the challenges faced by these operators. Chinedu Okoronkwo, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), has indicated that measures are being taken to address this crisis. He stated, “Stakeholders have been meeting, and measures have been taken to enable oil marketers to access foreign exchange at a rate that will not disrupt the current price of the product.” Meanwhile, in Abuja, most major marketers that are still operational have raised their pump prices from N615 per liter to N625 per litre, adding to the woes of already burdened consumers.
FG To GenCos, DisCos: No More Excuses Over Poor Power Supply
The Minister of Power, Adebayo Adelabu, has warned electricity generating and distribution companies over the poor distribution of electricity to Nigerians stressing that the government will no longer listen to their excuses. Adelabu, who made this known to Discos and generating companies during a meeting Saturday in Abuja, said the meeting was to find a lasting solution to the issues surrounding power distribution. According to a statement signed by the Minister’s Special Adviser, Strategic Communication and Media Relations Bolaji Tunji, Adelabu said: “We called this meeting to learn from you and the only way to salvage a bad situation is to understand the real issues on the ground. “Power is one of the most important things we need to energize the economy in terms of achieving the desired economic growth and Industrial development. ”The President has identified the power sector as a major driver of economic growth; therefore no excuse will be entertained for non-performance.” The minister also said that the meeting will become regular to create a stable and accessible environment that will enable discussions surrounding the generating, transmitting, and distribution value chain of electricity to be reviewed and decisions reached. He added that this development will make an impact in the power sector within two to three years.
Subsidy Removal Has Reduced Nigeria’s Fuel Consumption By 33% –Minister
The Minister of State for Environment, Kunle Salako, has said that the courageous decision by Bola Tinubu’s administration to remove fuel subsidy has reduced the country’s consumption rate by about 33 percent. Salako said on the sidelines of the 78th session of the UN General Assembly in New York, that the action has reduced the emission generated by petrol. “The singular action has reduced Nigeria’s consumption of petrol by 33 per cent, reduced the level of emission generated by Nigerians,” he said. “The courageous decision to remove subsidy from petroleum is furthering climate action by Nigeria. “I had highlighted this development in some of the meetings I attended or represented the President and at the meeting of Committee of African Heads of State and Government on Climate Change and at the meeting of Commonwealth Ministers of Environment and Climate. “Nigeria participated in the meeting of Committee of African Heads of State and Government on Climate Change where I represented President to pass a resolution to adopt the Nairobi Declaration for final vetting by the meeting of AU. “The first meeting of Commonwealth Ministers of Environment and Climate in which the Ministers decided to approach the 28th Conference of Parties in Dubai come late November to early December with common front of pushing for better financing for climate action. “I represented Nigeria at the meeting, and I established that President Bola Ahmed Tinubu by taking the courageous decision to remove subsidy from petroleum is furthering climate action by Nigeria. “It has also focused the attention of Nigeria at corporate and individual levels to renewable energy,’’ he said. Earlier in his statement delivered to the “High Level Event for Nature and People: from Ambition to Action”, on behalf of the President, Salako said achieving the world’s ambitious conservation targets, like 30×30, would require that we all do more to prioritise nature finance. 30×30 is a global target to protect 30 per cent of the planet for nature by 2030. “Last year, at COP15, the world agreed to fully close the nature finance gap and set a near term target of delivering at least $20 billion in international finance to the Global South by 2025. “Last month in Addis, African countries came together and issued a declaration that underscored the importance of these nature finance targets. “Nigeria would like to urge all countries to increase their efforts on this issue and to work with us to ensure that the world follow through on these crucial finance commitments. “This is our vision for the future, and we invite everyone to act and envision solutions that will preserve nature for future generations,’’ he said. According to him, as a responsible State Party to several Multilateral Environmental Agreements (MEAs), including the Convention on Biological Diversity, Nigeria is doing its utmost to promote transformation actions. The minister said that Nigeria was doing its best to promote transformations actions that are commensurate with the scale of the biodiversity crisis. “We are exerting these efforts within our own country in addition to supporting countries in our Sub-region to increase their capacity in this regard,’’ he said. In addition, Salako said that he attended Blue Leaders High Level Meeting, where in his statement, he said Nigeria was doing its best to promote transformation actions that were commensurate with the scale of the biodiversity crisis. He told the leaders that Nigeria was exerting these efforts within the country in addition to supporting countries in our Sub-region to increase their capacity in this regard. “This is an ambitious goal, a goal shared by the Blue Leaders and by ECOWAS countries, including Nigeria. “The high sea is an essential part of the marine ecosystem which plays critical role in maintaining the health of our planet and people. “Nigeria being the country with the longest coastline in West Africa understands the adverse effect of unregulated high sea and is therefore committed to the agenda of the ‘BBNJ’ Treaty. “Prompt ratification of the newly adopted high seas treaty is an essential means to reach this goal. We must urgently ensure that the treaty is ratified and implemented,’’ he said. He announced that through Nigeria’s rallying efforts, the 55 member States of the African Union have reached a consensus to support ratification of the earliest feasible date, the new international ocean treaty for the high seas, as enshrined in Addis Ababa Declaration. The declaration was adopted at the 19th ordinary session of the African Ministerial Conference on the Environment (AMCEN-19, August 2023). “Let us be bold for Oceans Conservation together and join African region to promptly ratify the new treaty,’’ he said.
Rising Oil Prices Good For FG, Bad For Nigerians, Says Rewane
Goldman Sachs has predicted oil price will likely rise to $100 again, citing lower production output from the Organization of Petroleum Exporting Countries (OPEC), amongst others. Chief Executive Officer of Financial Derivatives Company (FDC) Limited, Bismarck Rewane, says it will only increase revenue to governments but will not benefit Nigerians. “Globally, oil prices trade at $95/b and are projected to hit $100/b by year-end due to supply shortages. While government revenue, Federal Account Allocation Committee (FAAC) could increase in naira terms, Nigeria’s reliance on imported energy products (LPG, diesel, petrol and kerosene) amid a falling naira means higher food and transport costs, exacerbating inflationary pressures”, said Rewane in a statement Sunday. He said, these will be major considerations for the MPC at its next meeting, whenever that will be. Nonetheless, we expect the MPC to remain hawkish. Rewane in its FDC Prism Sunday however said, some form of looking inward could solve Nigeria’s economic woes. “Viable options would be improving the value addition of top agricultural traded products like cashew and cocoa, as well as mineral resources like steel. More importantly, Nigeria needs to show its political will, improve access, and encourage local businesses, particularly SMEs, to participate in the AfCFTA by removing non-tariff barriers, he said. Also meanwhile, oil and gas companies keep reporting meaty profits and investors are rediscovering their love of hydrocarbons. At the recent World Petroleum Congress (WPC) in Calgary, oil executives and government officials both warned against the continued push to discourage investment in new hydrocarbon production. “There seems to be wishful thinking that we’re going to flip a switch from where we’re at today to where it will be tomorrow,” Exxon’s chief executive said during the event. “No matter where demand gets to, if we don’t maintain some level of investment industry, you end up running shorter supply which leads to higher prices,” Darren Woods also said. This is exactly what we are currently witnessing in Europe and the United States. Because of the transition push, oil producers are being extra cautious with production growth. Also, they are prioritizing shareholder returns to keep shareholders on, so it pays for them to be cautious. In Europe, the supermajors are being squeezed by windfall profit taxes, activist pressure, and increasingly restrictive legislation, so they are turning elsewhere. Shell is tapping billions of potential barrels in Namibia, and Total is considering a $9billion commitment to oil exploration in Suriname. Meanwhile, Nigeria’s oil output could increase to 2.1 million barrels per day by December 2024 after the country secured $13.5 billion in investment pledges over the next twelve months from oil majors. The companies agreed to invest a total of $55.2 billion by 2030 – including the $13.5 billion over the next twelve months – to lift crude production, according to a statement from the president’s office.Nigeria’s oil output stood at 1.18 million bpd in August 2023, according to the Organisation of Petroleum Exporting Countries (OPEC), meaning production would nearly double by the end of next year. Nigeria is the top oil producer in Africa but large-scale oil theft has over the years cost the country billions of dollars, while dwindling investment in the sector has also curtailed output.The losses from theft and a lack of new projects have reduced oil exports sharply, eroding foreign currency earnings in Africa’s biggest economy.
NNPCL, NCDMB Sign Cost Reduction, Efficiency Pact With IOCs
The Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Content Development Monitoring Board have signed a Memorandum of Understanding with major oil companies to reduce cost, drive efficiency in Nigeria’s oil and gas industry. The agreement, which was signed on Monday, would enable the implementation of the industry framework which was developed by the IJC to achieve an optimal contracting cycle of not more than 180 working days. Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively compared with the current best effort performance of 327, 333, and 185 working days respectively. The framework is in line with the Nigerian Upstream Cost Optimization Program (NUCOP) and in consonance with President Bola Tinubu’s directive for NNPC Ltd and NCDMB to engage the industry with the objective of improving the performance of the petroleum industry. An optimized contracting cycle is expected to improve the ease of doing business, reduce cost, and drive efficiency which will eventually translate to production growth, increased revenues, and ultimately improved profitability. The MOU is one of the many collaborative solutions between the major industry players that will contribute significantly to the double-digit economic growth rate agenda of the Government and generate tremendous value for all the stakeholders including the investors, the companies, the community, and the country at large. The move is in line with one of the key mandates of NNPC Ltd as the National Energy Company in article 53 (7) of the Petroleum Industry Act (PIA) to conduct its affairs on a commercial basis in a profitable and efficient manner. The mandate for efficiency requires that NNPC Ltd is committed to working with its partners in ensuring key processes, procedures, and timelines that drive major business activities such as contracting are structured in a manner that engenders efficiency and drives profitability. NNPC Vice President, Upstream, Oritsemeyiwa Eyesan, signed on behalf of the National Oil Company while the Executive Secretary NCDMB, Simbi Wabote signed on behalf of the Board.