We’ll Continue To Protect Nigeria’s Oil Assets – President Buhari

Muhammadu-Buhari-London-Anti-Corruption-SummitPresident Muhammadu Buhari has restated the determination of his administration to continue to protect the country’s oil assets and installations.

Speaking at a meeting on Tuesday with the Director of Global Upstream of Shell Oil Company at the State House, Abuja, President Buhari said he will leave a legacy of improved infrastructure, particularly in the power sector, and also ensure better security in the Niger Delta.

“It is only by doing this that investor morale and confidence will return, and the economy will be positioned on the path of growth,” He said.

According to a statement by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, President Buhari commended Shell for their faith in the economy and staying power.

The president also gave assurances on some issues of concern raised by the company especially the protracted issue of cash calls.

The minister of Budget and Planning, Udoma Udo Udoma, some weeks ago, revealed that the Federal Government has not been able to fund its counterpart Joint Ventures Companies, JVCs, and cash calls totaling $6 billion for several months due to revenue shortfalls.

The President assured other oil firms that the Federal Executive Council will soon consider a proposal for the easing of unpaid arrears owed by the government.

President Buhari said the security of oil infrastructure will continue to be priority of his administration which will include the dialogue with the stakeholder-communities in the Niger Delta.

He, however, urged oil companies to take more responsibility in the protection of oil installations to complement the efforts of Nigerian Navy in the region.

The Shell director, Andrew Brown, revealed that the company has resumed oil exportation through the Forcados terminal following its restoration.

He also commended the anti-corruption stance of President Buhari’s administration as well as the efforts to streamline and stabilize the economy for long term projects.

Laws On Pipeline Vandalism Not Strong Enough – Lawmaker

The Chairman of the House of Representatives Committee on Petroleum Resources, Peterside Dakuku has said that the laws prohibiting the vandalisation of petroleum pipelines in Nigeria are not strong enough to deter oil thieves.

Speaking as a guest on Channels Television’s breakfast programme, Sunrise Daily, Mr Dakuku said nobody has either been successfully prosecuted or convicted for pipeline vandalisation in Nigeria.

He said, “we need to strengthen the laws. The punishments are not adequate that’s why it has been slightly difficult to prosecute people successfully. I agree that the laws may not be the only challenge but the current laws need to be strengthened.”

IPMAN Members Not Involved In Oil Thefts – Zonal Chairman

The South West Zonal Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Olumide Ogunmade has exonerated members of his association from the recurrent crime of oil theft and pipeline vandalisation.

Mr Ogunmade, who was a guest on Channels Television’s breakfast programme, Sunrise Daily, said there have been various investigations into pipeline vandalisation and no IPMAN member has been indicted.

“We are a very discipline set of people,” he said.

Vandals Bust Another Pipeline In Lagos

Suspected pipeline vandals have breached a petroleum product pipeline belonging to the Nigerian National Petroleum Corporation (NNPC) in Epe.
This was disclosed to Channels Television in a telephone interview with the Commandant of the Nigeria Security and Civil Defence Corps (NSCDC), Shem Obasheye.

Vandalized pipeline

“My boys told me that they were going to Epe, and actually when they got to Epe, the pipeline at Epe has been busted. The vandals ran away,” he said.

Officials of the Civil Defence Corps according to Mr Obasheye recovered eleven 50 litres containing of PMS at the scene of the busted pipeline. He however said none of the vandals were apprehended.

No fewer than three suspected oil thieves were last Saturday killed after an NNPC pipeline was gutted by fire at Arepo, Ogun state south west Nigeria. The fire is suspected to have been caused by activities from vandals in the area.

The fire occured at the same spot where vandals operated last August and three NNPC engineers were killed by suspected vandals in the process of fixing the pipeline and putting out the fire.

Fuel Subsidy: Okonjo-Iweala Says N94 Billion Will Be Disbursed Soon

The Coordinating Minister for the economy and Minister of Finance, Ngozi Okonjo-Iweala on Tuesday refuted media reports which allege that her ministry is blocking subsidy payments to verified marketers.

The Coordinating Minister for the economy and Minister of Finance, Ngozi Okonjo-Iweala addressing a news conference in Abuja

Addressing a news conference in Abuja, Mrs Okonjo-Iweala said that the ministry of finance made the N161.6 billion supplementary budget for subsidy payments which had been approved by the National Assembly available to the Central Bank of Nigeria (CBN) since 31 December 2012.

“As at 31st of December the Ministry of Finance had approved for this money to be available in the Central Bank accounts, where they can be accessed by the marketers,” she said.

The Minister said the payments are presently going through the CBN processes which include the conversion of the dollar equivalent from the excess crude account and will be concluded soon.

She also confirmed that payments totalling N94 billion have been verified for 23 marketers who will be paid in the next few days.

What If The US Stop Buying Our Oil?

United States’ imports of Nigerian crude oil slumped to the lowest level in more than 15 years in March, according to US Energy Department data released recently.

Nigeria shipped 337,000 barrels per day (bpd) of crude to the US, as against an average of 768,000 bpd for 2011. Imports of Nigerian crude to the East Coast of the US dropped to 1.745 million barrels in March, down 44 percent from February, while shipments to the Gulf Coast rose 31 percent to 8.693 million barrels.

Analysts say the rising production from the Eagle Ford shale formation in the US state of Texas may further dampen demand for Nigeria’s crude.

In this report, Adesewa Josh examines the implication of the declining demand for Nigerian crude oil in the American market.

Senate Shuts Down Debate On PIB

The debate on the Petroleum Industry Bill (PIB) has once again been shelved after an attempt by the Senate Majority leader Victor Ndoma-Egba to present the lead debate on the bill, failed in the senate.

There were signs that many lawmakers were not disposed to discussing the bill as some lawmakers questioned the rationale behind starting the debate that may not be completed before the commencement of the Christmas holidays.

However, Senator Ndoma- Egba reminded the lawmakers of the urgent need to begin work on the bill.

Sources told Channels Television that the plans to debate the bill was shot down deliberately by some northern lawmakers who are displeased with some sections of the PIB.

The source said some northern lawmakers are displeased with section 116 of the PIB which stipulates that all upstream petroleum producing company shall remit on a monthly basis 10 percent of its net profit to host communities.

Total sells $2.5 billion Nigerian oil field to China’s Sinopec

Total is selling a 20 percent stake in a Nigerian offshore oil field to China’s Sinopec in a $2.5 billion deal which will help the French oil group fund its ambitious exploration plans.

Total said on Monday it had signed a deal to sell the stake in the OML 138 block, which currently produces 130,000 barrels per day of oil equivalent and contains the Usan field, which started production in February.

The French group said in September it planned to sell assets worth between $15 billion and $20 billion in the period up to 2014 as part of a bolder approach to managing its business, which has seen it buy and sell assets more frequently.

Total, which is also selling its French gas network business, is ramping up spending on exploration to take advantage of the historically high price of oil, which averaged $113.6 a barrel in the first half of 2012.

Total’s chief executive, Christophe de Margerie, said earlier this month the group did not intend to disengage from Nigeria altogether.

“It doesn’t mean we are scared and intend to start some kind of walking out of Nigeria … Total is happy to develop its projects in Nigeria,” he told reporters at an energy conference in Abu Dhabi.

Chinese companies have been among the most aggressive in targeting assets around the globe to help feed oil and raw material demand in the world’s second-biggest economy.

Sinopec, Asia’s largest refiner, has also snapped up energy assets in Britain and the United States recently to boost foreign earnings, as a slowdown in China hit profits.

Other shareholders in the OML 138 oil block, located 100 kilometres off the coast of Nigeria, are Exxon and Chevron, with 30 percent each, as well as Nexen , which owns 20 percent.

Total’s shares were up 2.5 percent by 1500 GMT, outperforming a 2.1 percent rise in the European oil and gas sector

NLNG says Ribadu’s report is ‘grossly erroneous’

Nigeria Liquefied Natural Gas (NLNG) Company has denied key findings in a government-commissioned probe into the country’s oil and gas sector, which accused the firm of paying below market prices for gas supplied to its 22mn tonnes per annum plant and that it owed $29 billion to the Federal government for this gas.

The report by the special task force on petroleum revenue led by a former Chairman of the Economic and Financial Crimes Commission (EFCC), Nuhu Ribadu was received by President Goodluck Jonathan last Friday.

But NLNG, whose shareholders are the Nigeria National Petroleum Corporation (NNPC), Shell, Total and Italy’s Eni, rejected the report’s findings on its operations.

“This report is inaccurate and the allegation grossly erroneous,” NLNG said.

“It is an error to compare the price of raw material (natural gas feedstock) to that of finished product (regasified LNG). It is even worse to declare the difference as losses or cut down rates. This sort of comparative economic analysis is simply bizarre. It fails to recognise the intensive production-liquefaction costs, the shipping costs, the regasification costs, taxes and levies and other ancillary charges,” the company added.

NLNG said it had paid over 300pc of the going rate of gas in Nigeria during the period under review.

The price that NLNG bought gas from producers is a “netback price”, which since 2008 has been between 26pc and 36pc of the weighted prices it obtains from the sales of its products in various regions in the world. This price level compares well across LNG plants globally and reflects the capital-intensive nature of the liquefaction process and shipping costs, NLNG said.

NLNG currently pays over $2 billion per annum to the Federal government in various taxes.

The firm did back the report’s recommendations that more LNG trains should be built in the country, including the seventh train at the current plant on Bonny Island.

NEITI says Ribadu’s report followed trend of previous audits

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Sunday said that the report submitted by the Petroleum Revenue Special Task Force, headed by the former Chairman of the Economic and Financial Crimes Commission, Nuhu Ribadu followed the trend of previous audits of the oil and gas sector in the country.

President Goodluck Jonathan receiving the Petroleum Revenue Task Force report from the Minister of Petroleum, Deziani Allison-Maduake at the Presidential Villa, Abuja. With them are the Special Task Forces on Governance and Control, Dotun Suleiman, Chairman, the Chairman of the taskforce, Nuhu Ribadu, and the Alternate Chairman, Refineries Special Task Force, Yusuf Alli.

In a statement signed by the Chairman, National Stakeholders Working Group, of the NEITI BOARD, Ledum Mitee, the group said “as an agency statutorily set up to develop a framework for transparency and accountability in the management of revenues from Nigeria’s extractive industries, especially oil and gas, NEITI has legitimate interest in not only the Report, but the processes, its findings and the outcome.”

NEITI said that it has conducted “three different cycles of industry audits spanning the period 1999-2004, 2005 and 2006-2008 respectively. The Report of another round of comprehensive audit of the oil and gas sector for 2009- 2011 which began early in the year is expected to be concluded by December 2012.

“Each of the past NEITI audit Reports clearly identified financial, physical and process lapses, and revealed a loss of some 2.6 billion USD due to underpayments, under-assessments,  poor judgment in the computations of volume of crude sales and other leakages only.

“From the past audits, NEITI reports equally disclosed that a whooping total sum of $9.8 billion (equivalent to ₦1.373 trillion at the current exchange rate) is outstanding recoverable fund due to the Federation Account from the companies.  NEITI also openly expressed concern that there was no sufficient effort to recover the funds from the companies, by the affected relevant government agencies, even when the companies have not shown any resistance to pay.

“NEITI industry audits have also consistently identified and highlighted the problems within the sector, proposed solutions and ways to implement them, but implementation of these recommendations and remediation issues has remained a major challenge in spite of the efforts of NEITI under the Inter- Ministerial Task Team set up by the Federal Government for these purposes.

“NEITI notes that the reported findings of the Ribadu Committee are not surprisingly, rather it followed the trend of NEITI audits, given the prevailing poor institutional linkages, systematic leakages, poor legal framework, governance and process lapses which appear to characterize business ethics in the oil and gas industry in Nigeria over the years. The Ribadu Report has re-opened a compelling and urgent case for necessary follow- through actions on remedial issues already identified and recommended by the extant NEITI reports.

“While NEITI also considers the series of probes now on-going in the oil and gas sector as most welcome fundamental steps towards actualizing the global principles and objectives of Extractive Industries Transparency Initiative which Nigeria voluntarily subscribed to as a member since 2003, it feels however that had the remedial issues identified by the NEITI audit reports been dealt with or had NEITI the necessary enabling enforcement powers, some of the issues necessitating and identified by these probes would have since been dealt with.

“NEITI certainly feels vindicated by the reported findings of the Ribadu Committee, it is our belief that one further thing the Ribadu Report has clearly achieved is to expose the need to further strengthen NEITI through necessary amendments to its enabling Act to give it the necessary enforcement powers as well as visible steps to implement the findings and recommendations of audit reports.

“While  awaiting the full publication of the Ribadu Report and anticipated government action thereon,  NEITI believes that the ultimate lesson to be derived from these is the need for coordinated efforts of all; the media, civil society, companies, government and the public for speedy passage of the Petroleum Industry Bill (PIB) with clear contents and provisions that will bring about accountability, openness, competition, competence and integrity as well as promote investment-friendly environment in our oil and gas industry.”

Conoil half year profit slumps 81 percent

Fuel marketer Conoil said on Monday its half-year pretax profit fell 81 percent year-on-year to N663.14 million compared with N3.5 billion a year earlier.

Turnover also declined to N76.2 billion during the period, from N79.9 billion last year, the fuel marketer said in a filing with the Nigerian Stock Exchange.

Conoil did not provide any reason for the fall in profit.

Its shares were trading flat at N23 at 1031 GMT.