OPEC, Allies Agree To Extend Output Cuts Through July

 

OPEC members led by Saudi Arabia and other key oil producers agreed Saturday to extend historic output cuts through July, as oil prices tentatively recover and coronavirus lockdowns ease.

The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement.

Prices had plummeted owing to falling demand as countries around the world imposed strict lockdowns to stop the spread of the new coronavirus.

“All participating countries… agreed on the option of extending the first phase of the production adjustments pertaining in May and June by one further month,” the OPEC statement said.

Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.

The cuts were then to be gradually eased from July, to 7.7 million bpd until December.

Algerian Oil Minister Mohamed Arkab, who currently holds OPEC’s rotating presidency, told AFP that the agreed cut for July was 9.6 mbpd, just slightly below the 9.7 mbpd for May and June.

Oil ministers from key producers will meet monthly to assess the agreement, he added.

The April deal was signed after days of wrangling between major players, whose revenues have been ravaged by the collapsing oil market this year.

Analysts had expected the May-June cuts to be extended by at least another month, if not until the end of the summer or even until the end of the year.

Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which were already comparatively low.

– Respecting Quotas –

A bone of contention ahead of the meeting had been the willingness of each country to abide by the agreed production quotas.

According to data intelligence company Kpler, OPEC+ reduced output by around 8.6 million bpd in May, less than planned, with Iraq and Nigeria seen as the main culprits.

OPEC said all meeting participants agreed Saturday that countries that fell short of their production cut quotas so far were willing to make up for it in July, August and September.

Despite the difficulties, the output cuts have helped support oil prices, which rose to around $40 per barrel at the start of June for both the US benchmark, West Texas Intermediate (WTI), and Europe’s Brent North Sea contracts.

Around April 20, both had slumped to historic lows, with Brent falling as low as $15 and WTI briefly entering negative territory.

Saturday’s meeting had been originally scheduled for next week, but was brought forward at the suggestion of Algeria’s Arkab.

FG Targets Oil Production Of Three Million Barrels Per Day

 

The Federal Government has said that a target of three million barrels per day of oil production has been set and steps are being taken to realise it before the end of 2023.

This is according to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, at a meeting with the House of Representatives committee on petroleum upstream.

Mr. Kyari added that a target of 40 million barrels of reserves has also been set and the possibilities of achieving them are high due to the several interventions being explored by the government.

“The national target of three million barrels per day of daily production and 40 million barrels of reserves has not been attained, we are much focused today, we know it is possible, we have taken steps to realise this before the end of 2023.

“A number of interventions are ongoing, including our elaborate intrusion into the frontier basins which we announced oil discovery in the Gongola basin, and we expect many more to happen including the Anambra platform and some part of Benue, Bida and Chad basin.”

READ ALSO: Finance Minister Breaks Down Proposed 2020 Budget, Puts Total Revenue At N8.15trn

The NNPC boss stated that the failure of having refineries across the country owes fully to the inability of the Government to take care of them and no excuse is tenable for such.

“The refineries didn’t fail because there were no skilled people; they failed because we are unable to take care of the refineries and we don’t want to give excuses why we didn’t take care of it, you can blame anyone, but what we have decided to do is to make them work.”

He added: “There is no scarcity of skilled people, the will is there and our plan subsequently will be made available and I assure you that the plans we have in place will make them work and it will deliver the refineries; we have the best refiners in the world.”

Nigeria Recorded 9% Growth In Oil Production In 2018 – NNPC

 

 

Nigeria’s daily crude oil production increased by 9 per cent to about 2.09 million barrels in 2018, when compared to the 2017 average production of 1.86 million barrels.

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Maikanti Baru, says the nation has maintained a line of consistent year-on-year improvement in its daily crude oil production.

The NNPC boss explains that the Nigerian Petroleum Development Company, Nigerian Gas Company, Petroleum Products Marketing Company, Duke Oil, Nidas and Integrated Data services limited, are among the companies that boosted the corporation’s performance in 2018.

In a statement by NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu,  Dr. Baru singled out NPDC, the corporation’s Upstream flagship company, as the major contributor to the Industry’s success story in 2018, expressing enthusiasm on the 52 per cent daily crude oil production growth by the company vis-à-vis its 2017 performance.

According to Baru, the end-of-year statement explained that the average production from NPDC’s operated assets alone grew from an average of 108,000 of oil per day (bod) in 2017 to 165,000bod in 2018, describing the feat as the strongest production growth within the Oil Industry in recent times, even as he added that it was worth being celebrated.

The GMD said NPDC’s equity production share which stands at 172,000bod, representing about 8 per cent of national daily production, was no less impressive, saying the desired results are outcomes of initiatives his Management team emplaced, among which, he noted, are the Asset Management Tea (AMT) structure, Strategic Financing, Units Autonomy and security architecture framework.

“Of the Industry milestones in the outgone year, Dr. Baru described the 200,000bop addition which the Egina Floating Production Storage and Offloading (FPSO), completed and sailed away to location in August last year, added to nation’s daily production, even as he disclosed that the project achieved First Oil at 11.20pm on 29th December, 2018”.

In end-of-year statement, the release by the NNPC spokesman stated the NNPC GMD relayed to staff, a save of $1.7billion dollars by NNPC, with corporation’s Joint Venture (JV) partners over a five-year tenor repayment plan, saying already the corporation has defrayed $1.5billion of the arrears.

Dr. Baru made the promise that NNPC would stick to the Repayment Agreement with the JV Partners while transiting to self-funding IJV modes with the corporations partners, saying that tiding up the Cash Call issues has led to increased commitment and enthusiasm to invest in Nigerian Oil and Gas Industry even as it has also boosted NNPC’s credit profile internationally.

He concluded the achievements of NNPC in the Upstream sector by listing other milestones achieved by his team to include: reduction in contracting cycle for Upstream Operations to nine months from an average of 24, even as the corporation targets a six months cycle; lowering of production cost from $27/barrel to $22/barrel; and improving on the security situation in the Niger Delta through constructive engagement and dialogue with relevant stakeholders.

He revealed that in the frontier basins, NNPC has intensified explorations activities in the Benue Trough, with the expected spudding of Kolmani River Well 2 on 19th January, 2019.

He explained that activities would resume in the Chad Basin as soon as there is a greenlight on the security situation in the enclave.

In the Midstream, the NNPC GMD stated that in 2018, Nigeria achieved an average national daily gas production of 7.90bscf, translating to 3 per cent above the 2017 average daily gas production of 7.67bscf.

He said out of the 7.90bscf produced in 2018, an average of 3.32bscfd (42%) was supplied to the Export market, 2.5bscfd (32%) for Reinjection/Fuel Gas, 1.3bscfd (16%) was supplied to the domestic market and about 783mmscfd (10%) was flared.

The GMD stated that out of the 1.3bscfd supplied to the domestic market, an average of 71mmscfd went to the Power Sector, while 470mmscfd was supplied to the Industries and the balance of 69mmscf delivered to the West African Market through the West African Gas Pipeline (WAGP).

Dr. Baru said NNPC would bridge the medium-term domestic gas supply deficit by 2020 through the corporation’s Seven Critical Gas Development Projects (&CGDPS), adding that a reputable Project Management consulting firm is collaborating with an NNPC team to achieve accelerated implementation of the projects.

He assured that full implementation of the project would boost domestic gas supply from about 1.5bscf/d to 5bscf/d by 2020, with a corresponding 500 per cent increase in power generation and stimulation of gas-based industrialization.

Dr. Baru said all existing power plants in the country now had a permanent gas supply pipeline infrastructure, even as he stressed that the corporation would continue to expand and integrate its gas pipeline network system to meet increasing domestic gas demand.

He listed key gas pipeline infrastructure projects on which, he noted, significant progress had been made in their execution to include: Escravos-Lagos Pipeline System (ELPS II), Obiafu/Obrikom-Oben (OB3), Odidi-Warri Expansion Pipeline (OWEP), Trans Nigeria Pipeline Project (TNGP) – Ajaokuta-Kaduan-Kano (AKK) Pipeline, Trans Nigeria Pipeline Project (TNGP) and Nigeria-Morocco Gas Pipeline (NGMP) Project.

In the Midstream Refinery Sub-sector, Dr. Baru regretted that the nation’s three refineries had not undergone Turn Around Maintenance (TAM) for an aggregate of 42 years combined.

Despite the challenge, he explained that major rehabilitation works were carried out in all the three refineries, saying, WRPC has its Distribution Control System (DCS) successfully upgraded, PHRC had major interventions in Fluid Catalytic Cracking Unit (FCCU) and Power Plant Unit (PPU) fixed, while KRPC was undergoing major repairs of its FCCU, Catalytic Reforming Unit (CRU) and Crude Distillation Unit 2 (CDU2).

He noted that efforts were afoot to get the original builders of the refineries to carry out TAM on them after securing favourable private funding for the exercise.

In the Downstream Sector, Dr. Baru noted that even though 2018 was riddled with some supply shortages, he was delighted that the corporation rose to the occasion with the support of President Muhammadu Buhari and the resilience and hard work of NNPC staff, saying as, at today, there is fuel availability in the nook and cranny of the country.

“It gladdens my heart to hear the positive comments made by motorists and filling-station owners during my routine checks on some filling stations at the eve of Chrismas”, Dr. Baru stated.

The GMD disclosed that NNPC imported a total of 15,874,734.82 MT of Premium Motor Spirit (PMS) otherwise called petrol through the DSDP and the NFSF arrangement in 2018, representing 62% increase over the 2017 supplies of 9,807,264.61MT, saying that as at today, the national oil company has 2.98 Billion litres, equivalent to over 59 days sufficiency at 50 Million litres daily evacuation rate.

Dr. said the corporation’s depots had been resuscitated and put to use through decanting of over 140 Million litres of PMS nationwide, explaining that systems 2B and 2E pipelines supplying petroleum products to South West, South-South and South East Regions have been resuscitated.

GMD assured that NNPC was on track in respect of the corporation’s Twelve (12) key Business Focus Areas (BUFA), and the vision of President Buhari to improving the status of oil and gas infrastructure through ensuring products availability to support national economic recovery and growth.

He lauded the contribution of the corporation’s Downstream outfit, NNPC retail, saying it played a significant role in ensuring a continuous supply of petroleum products to Nigerians through its Mega, Affiliates and Leased stations.

Nigeria’s average national daily gas production also rose to 7.9 billion standard cubic feet, 3 per cent above the 2017 average daily gas production of 7.67 million standard cubic feet.

Saudi King Agrees To Ramp Up Oil Production, Says Trump

US President Donald Trump speaks in the East Room of the White House on June 18, 2018 in Washington, DC. Brendan SMIALOWSKI / AFP

 

US President Donald Trump said on Saturday that Saudi Arabia’s King Salman had agreed to his request to ramp up oil production, a week after OPEC already announced an output rise.

“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & dysfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference,” Trump announced in an early morning tweet.

“Prices too high! He has agreed!”

Trump has repeatedly lashed out at OPEC on Twitter in recent months, piling pressure on Riyadh, a major ally, to boost output as he hopes for lower pump prices before midterm congressional elections in November.

His latest comments come a week after ministers from the Organization of the Petroleum Exporting Countries — of which Saudi Arabia is the major member — had already agreed to raise output from July.

Non-OPEC member Russia on June 23 also backed the effort, capping a week of tense diplomacy for the grouping that averted a damaging rift between arch-foes Iran and Saudi Arabia.

The ministers announced they would ramp up oil production by around one million barrels a day from July.

“I think it will contribute significantly to meet the extra demand that we see coming in the second half,” Saudi Energy Minister Khalid al-Faleh told reporters at the time.

The talks had centered on whether to amend an 18-month-old supply-cut deal between OPEC members and allied countries, including Russia, that has cleared a global oil glut and lifted crude prices.

Saudi Arabia, backed by non-member Russia, had argued strongly in favor of increasing production as grumbles in major consumer countries like the United States, India and China have grown about high prices.

Iran opposed any changes to the original production-cut deal at a time when its oil industry is facing renewed sanctions over Trump‘s decision to quit the international nuclear deal with Tehran.

In the end, both sides were able to save face.

The current production curb pact calls for participating countries to trim output by 1.8 million barrels a day.

But production constraints and geopolitical factors have seen several nations exceed their restriction quotas, keeping about 2.8 million barrels off the market, according to OPEC.

By agreeing to collectively raise output by a million barrels, member countries are simply committing to comply fully with the deal struck in late 2016.

Iran has accused Trump of trying to politicize OPEC and said it was US sanctions on Iran and Venezuela that had helped push up prices.

Saudi Arabia was producing more than 9.9 million barrels a day in May, according to OPEC, citing secondary sources.

AFP

High Cost May Force Nigeria To Stop Oil Production – Kachikwu

Researchers Kidnap: Kachikwu Doubts NNPC Workers' Rescue

The Minister of State for Petroleum Resources, Dr Ibe kachikwu, says Nigeria will be forced to stop the production of crude oil if the cost of doing that remains high.

Dr kachikwu made the statement today at the opening ceremony of the Nigeria Annual International Conference and exhibition organised by the Society of Petroleum Engineers in Lagos.

According to him, countries within the United Arab Emirates had cut costs significantly, describing them as the lowest-cost producers in the world.

He added that Nigeria might forcefully call for a reduction in the cost if negotiations are not possible, adding that only oil companies that are able to drive down costs will thrive in the country.

“For me, you rather leave the oil in the ground than produce at a cost that doesn’t make sense. So, cost is going to be a very high driver. So that is certainly one area we are focusing on; we are working collaboratively with oil companies,” he said.

“But let’s make no mistake about it, if we cannot negotiate it down, we will compel it or we will stop the production; it does not make any sense.”

Senate To Debate 2017 Expenditure Framework On Tuesday

Senate Plenary NigeriaThe Senate will on Tuesday open debate on the 2017-2019 Medium Term Expenditure Framework (MTEF), and Fiscal Strategy Paper (FSP).

The Senate President, Dr Bukola Saraki, in a press release from his media office confirmed that deliberations on the expenditure framework will has been fixed for Tuesday. He added that this comes as the Senate has resolved to prioritize all economic bills to help fast track the exit of Nigeria from the economic current recession.

The statement added that quick consideration and eventual passage of the MTEF will help pave the way for the Executive to present the 2017 Appropriation Bill before the National Assembly in good time.

The MTEF and FSP provide the framework for the 2017 budget.

An analysis of the fiscal provisions of the 2017 – 2019 MTEF/FSP includes a proposed 2017 crude oil benchmark of $42.5 per barrel, up from $30 in the 2016 budget and the estimated N7.775 trillion as revenue to be generated from oil resources based on an estimated 2.2 million barrel per day oil production.

PENGASSAN Threatens Strike Over National Assets Sale

PEngassan, assets saleA leading union of oil workers has threatened to shut down the country if the federal government carries out the plan to sell national assets as a way out of the current economic recession.

The oil workers under the aegis of The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), described the plan to sell the national assets as a self-destructive move.

In a statement, PENGASSAN said that the plan, which is to solve short term financial obligations, is really aimed at handing over Nigeria’s collective common wealth to a few individuals.

The union is asking the federal government to instead look for other ways of increasing the revenue base of the country, while plugging loopholes and leakages in government’s finances.

Okowa Urges Deltans To Allow Peaceful Atmosphere For Development

Okowa, Delta State, Peaceful AtmosphereThe Governor of Delta State, Ifeanyi Okowa, has met with stakeholders in Warri on the need to create a peaceful atmosphere for the development of Delta State and the Niger Delta region.

The Governor, during the meeting at the government house annex, Warri, decried the destruction of oil facilities in the Niger-Delta region which he said had compounded the financial woes of the nation as oil prices have not only reduced but, the country could not increase oil production to boost revenue.

Governor Okowa said that the meeting was necessary to intimate the people about the current financial and economic challenges being faced by the state.

Earlier, the Governor met with the leadership of Ugborode community, South West local government area of Delta State for the effective commencement of work at the multi-billion dollar Gas Revolution Industrial Park (GRIP) project in the area.

Addressing a cross section of journalists in Warri after the State Security Council Meeting, Governor Okowa observed that although, Ugborode community was peaceful, there was the need to sensitize them to build on the existing peace as construction works would commence in the multi-billion dollars project within the next couple of weeks.

Governor Okowa also asked representatives of Ogbe-Ijaw and Aladja communities to cooperate with the committee set up by his administration to proffer lasting solutions to the dispute that has rocked both communities over the years.

Governor Okowa gave room for participants to express themselves on how they could provide the peaceful atmosphere for the economy to strive.

On their part, the State Commissioner of Police, Zanna Ibrahim called on Deltans to give useful information to security operatives to nip situations in the bud, observing that criminality, especially pipeline vandalism, has long term effects on the environment.

Others stakeholders who spoke at the occasion, including traditional rulers called for the implementation of local content policy in the oil sector and proper equipping of security operatives.

Some others cried out over gross marginalization of their communities and appealed to the state and federal government to give them adequate attention.

Doyin Okupe denies condemning Ribadu panel report

The Special Assistant to the President on Publicity, Dr Doyin Okupe was asked by Chamberlain Usoh; the main anchor of ourbreakfast programme ‘Sunrise Daily’ to give an update on the Ribadu report, and he responded saying the President has said the report will not be discarded.

And to fulfil his promise he has setup a white paper committee to look at the report and that he believes it will put an end to several talks on the report.

Prevoius Article: Presidency rubbishes Ribadu’s report

Watch complete interview for more details.

Oil Sector Probes: There is a rot in the system – Oil and gas expert

Still on the controversial probe into the nation’s oil sector, an oil and gas expert; Kestin Pondi, while speaking on the Ribadu report, stated that the report has proved to people of the Niger Delta in the creek that the claims of the International Oil Companies (IOCs) and the NNPC that they lose 150,000 barrels of crude oil daily to oil thieves is fallacious.

Mr Pondi, considers what happens in the oil offices in Abuja to be a ‘monumental fraud’ as there is a rot in the system.

He further alleged that it is the figures given by these IOC’s and oil multinationals as the quantity of oil produced per day that is being depended on.

Watch complete interview for more details.

Fuel subsidy is a mega-fraud in Nigeria – Tam David West

Taking on the controversial probe into the nation’s oil sector led by Mallam Nuhu Ribadu, former Minister of Petroleum Professor Tam David West, on Sunrise Daily stated that, what the Federal Government is doing is a “charade because a government that deceives its citizens consistently is sad.”

The former Minister, who has always claimed that the nation’s fuel subsidy regime is nothing but fraud, again affirmed his position saying there is no fuel subsidy in Nigeria rather what exists is ‘fuel subsidy mega-fraud.’

He argued that his allegation has been proven by the recent controversies on investigations into the sector by the committees led by Farouk Lawan and Nuhu Ribadu.

Professor David-West also revealed that he has challenged the Federal Government for a public debate on the issue but he has never gotten a response to the offer.

The Federal Government on Thursday appointed another committee, made of serving Ministers to draft out a white paper from the controversial special task force report on the petroleum revenue submitted by the Ribadu committee.

Nigeria’s oil production ends in 41 years – World Bank

Nigeria’s oil reserve will be depleted in 41 years, according to a World Bank Group’s twice-yearly analysis of the issues shaping Africa’s economic prospects called Africa’s pulse.

The report which was presented by the World Bank’s chief economist for Africa, Shantayanan Devarajan, on Thursday said Nigeria’s and Angola’s oil reserves will be depleted in 41 and 21 years respectively.

“Nigeria, the largest regional producer, can keep supplying at 2011 levels for another 41 years, while Angola, the second largest producer in the region, has about 21 years remaining at current production levels before its known reserves are depleted.

“Given the size of these reserves, it is likely that the dependence on oil resources in these countries are likely to continue in the near to medium term. Production in newly oil-rich countries such as Ghana and Uganda could also last for several years.”

According to the World bank’s chief economist, Mineral wealth in African countries including Nigeria don’t translate to prosperity because the money accruing from it doesn’t pass through the citizens, and the citizens don’t see the wealth as theirs.