Friday, 3 August 2012

Court restrains Minister, NERC Chairman & PHCN from awarding prepaid meter contract

An Abuja Federal High Court has issued an interim order restraining the Minister of Power, Prof. Bart Nnaji, the Chairman of the Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, and the Power Holding Company of Nigeria from going ahead with the award of contract for prepaid meters, pending the determination of a suit brought by a firm, Ziklagsis Network Limited. The order was issued by Justice Gladys Olotu of a Federal High Court in Abuja.
Ziklagsis Network Limited claimed that the PHCN had in 2003 entered into a tripartite agreement with it and Unistar High-Tech System Limited for the maintenance of prepaid electricity meters. The firm also alleged that the said agreement was frustrated by senior management personnel of the PHCN through various manipulations.
An arbitral panel headed by Justice Kayode Eso, a retired justice of the Supreme Court had earlier issued an order restraining the Power Holding of Nigeria (PHCN) from awarding the contract to any other company pending the determination of an appeal brought by a firm, Ziklagsis Network Limited. But Nnaji was said to have vowed that the government of Nigeria would not be bound by any court order.
 PHCN had in 2003 entered into a tripartite agreement with Ziklagsis, Unistar High-Tech System Limited for the maintenance of Prepaid Electricity Meters.  Ziklagsis in separate letters to Nnaji and Amadi alleged that the agreement was frustrated by very senior management staff of the PHCN through various manipulations.

Nigeria’s crude oil production hits 2.7 million barrels per day

Nigeria’s crude oil production has increased from 2.4 million barrels per day to 2.7 million barrels. The Group Managing Director, Nigerian National Petroleum Corporation, Mr. Andrew Yakubu, said that this significant milestone was recorded because the security measures put in place by the Federal Government in the Niger Delta were beginning to yield positive results as shown in the increased crude oil production in the country.
Yakubu disclosed this when the Governor of Benue State, Dr. Gabriel Suswam, led a delegation to the NNPC Towers, Abuja. According to the NNPC boss, “we want to thank the President, Dr. Goodluck Jonathan, for his great initiative to restore security with regards to pipelines and our crude oil production facilities and we thank the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, for driving the process”.
He appealed to all the state governments, local governments areas, communities and other stakeholders to work in partnership with the corporation to safeguard the pipelines and other strategic national assets in order to reduce wastages.

PHCN workers stage walk out on Ministers

Power Holding Company of Nigeria (PHCN) workers staged a walkout during a meeting with two ministers and some top government officials. The meeting held at the PHCN head office, Abuja, was aimed at fine-tuning negotiations between government and labor for the privatization of PHCN. The Ministers present were the Minister of Power, Prof. Bart Nnaji, and his counterpart in the Labor and Productivity, Chief Emeka Wogu, were at the meeting.
A statement from the Ministry of Power, signed by the Special Adviser to the Minister of Power, Mr. Ogbuagu Anikwe, said the government-labour negotiating team requested Nnaji to address the workers on the government’s position on the matter. The statement said, “As early as 8am, the conference hall of PHCN was filled to capacity. However, midway into the session, someone came to ring a bell to announce that the General Secretary, National Union of Electricity Employees, Mr. Joe Ajaero, has directed all workers in the hall to leave with immediate effect. “Many of the workers immediately complied. This, however, did not deter the team, which went on to deliver the message to the management and a few workers who were left behind.”
The meeting, which lasted for two hours, was aimed at giving the ministers and the negotiating panel a hearing as well as to brief them about the final phase of the power sector reform exercise. Nnaji stated that he came to have a face-to-face interaction with the workers and to answer questions that might be agitating their minds over the ongoing privatization exercise.

Thursday, 2 August 2012

Iran loses $133 million per day to oil embargo

Iran is losing $133 million per day as a result of U.S.-led sanctions against it.  Shipments from Iran have plunged by 1.2 million barrels a day, or 52 percent, since the sanctions banning the purchase, transport, financing and insuring of Iranian crude began July 1, according to data compiled by Bloomberg. It is being projected that in a year, the embargo would cost Iran about $48 billion in revenue, equivalent to 10 percent of its economy.
While Iran’s threats to disrupt the flow of oil through the Persian Gulf sent crude to a three-year high in March, increased production from Saudi Arabia, a U.S. output boom and the slowing global economy have left prices 1 percent lower in 2012.
Brent oil has dropped 3.8 percent to $106.34 a barrel since Jan. 23, when European Union ministers approved a ban on the purchase and insurance of Iranian oil. The U.S. is paying 6.2 percent less than a year ago for imported crude as domestic fields produce the most in 13 years, driving stockpiles to all- time highs, Energy Department data show.
Crude futures in London rose as high as $128.40 on March 1, an advance of 20 percent for the year, after Iranian officials threatened to order the closing of the Strait of Hormuz. The Gulf waterway, 21 miles wide (34 kilometers) at its narrowest, is a conduit for 20 percent of the world’s traded oil, according to the Washington-based Energy Information Administration.
Prices retreated as Saudi Arabia boosted output. The Organization of Petroleum Exporting Countries’ biggest producer is pumping more than 10 million barrels a day, the most in three decades and 22 percent more than at the end of 2010, according to the International Energy Agency. The Paris-based adviser to the world’s biggest industrialized economies cut its forecast for global oil use four times this year, to 89.9 million barrels a day.

PHCN Privatization Shady – NUPENG

Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, has accused BPE of shady deals aimed at allowing cronies and fronts of the powers that be to buy up the PHCN companies at ridiculous prices. NUPENG made this accusation less than 24 hours after the Bureau of Public Enterprises, BPE, released names of companies that bidded for the Power Holding Company of Nigeria, PHCN’s, 11 distribution companies,
NUPENG in a statement asked President Goodluck Jonathan to immediately intervene in the process by prevailing on the BPE and the Federal Ministry of Power to extend the time for bidding to allow other interested parties and Nigerian investors to participate. The union believes that the closure of the bids is to allow the cronies and front men of the powers that be to buy up the PHCN companies at ridiculous prices.
NUPENG, therefore, called on the Federal Government to intervene quickly in the closure of the bidding by prevailing on the BPE and the Federal Ministry of Power for an extension of time to allow other interested parties and Nigerian investors to participate in the bidding.

Falling oil price, threat to Nigerian economy – Sanusi

Nigeria’s Central Bank Governor, Mallam Sanusi Lamido Sanusi has said that falling oil prices and domestic energy output due to declining global demand are a concern for Nigeria’s economy,
According to Sanusi, the worsening situation in the Euro zone and rising global food prices may also push inflation higher adding that the country’s slower growth and tighter fiscal discipline could counter balance those upward effects.
Nigeria exports most of its domestic output and figures show exports have been falling, suggesting falls in output. Exports are set to fall, to 1.81 million barrels per day (bpd) in September
Nigeria is among the top 10 crude oil exporters in the world and is one of Goldman Sachs’s N-11 emerging economies after the power houses of the BRIC countries — Brazil, Russia, India and China. Nigeria’s 2012 budget is based on an oil price of $72 a barrel and oil fell below $90 in recent weeks, though it has since reached $100.

Privatization of firms in power sector on course – Prof. Nnaji

Minister of Power, Prof Barth Nnaji also explained that the privatization of companies in the power sector is not just about giving it to the private sector to manage but a way of ensuring that the generating companies have the ability to serve powers to the distribution companies that are credit worthy.
Nnaji stated that unless the distribution companies were credit worthy, they would not be able to buy power from the generating companies that would defeat the goal of the transformation in the sector. He expressed regrets that none of the distribution companies were currently credit worthy.
At the close of bidding for power generation and distribution companies, out of the 79 firms that showed interest, 25 of the bids were for generation and management of existing power plants while 54 were for power distribution and transmission.

Tanzania Cuts Pump Prices Of Petrol, Diesel, Kerosene

Following drop in the price of crude oil in global markets, Tanzania has cut pump prices of petrol, diesel and kerosene raising hopes of further declines in the country’s inflation rate.  Food and fuel prices are the main drivers of inflation in the East Africa’s second-biggest economy.
 Tanzania is not an oil-producing nation but has gas deposits in a deepwater basin it shares with Kenya and Mozambique.
Year-on-year inflation fell for the sixth straight month in June to 17.4 per cent from 18.2 per cent previously, helped by lower food and energy costs. According to Reuters report monitored by Nigeria energy Intelligence, the state-run Energy and Water Utilities Regulatory Authority lowered the price of petrol in the commercial capital, Dar es Salaam, by 7.81 per cent to 2,009 shillings per litre (N204.077); and cut that of diesel by 4.81 per cent to 1,943 shillings (N198.463). The price of kerosene was lowered by 5.05 per cent to 1,926 shillings per litre (N196.727). Wholesale price for petrol was also lowered by 8.09 per cent, diesel by 4.99 per cent and kerosene by 5.24 per cent.
The new maximum prices take immediate effect until the next review next month.

Wednesday, 1 August 2012

Total invests N160b in Nigeria, targets additional 350,000bpd capacity

Total Upstream Companies in Nigeria, according to its Managing Director/Chief Executive Officer, Total Upstream Companies in Nigeria,  Guy Maurice, has invested about $10 billion (N160 billion) in various oil and gas projects in Nigeria in the past five years. The oil multinational is also planning to add about 350,000 barrels per day capacity to the nation’s oil production within the next three years through its Usan and Akpo oil fields. Maurice made this revelation while examining the company’s operation in Nigeria, in its “Focus Nigeria”, and added that Total has a bright future in Nigeria and would continue to invest in the country.

Maurice said the company has completed the full re-organization, in order to be ready for the next phases which include the development of new projects like Egina; completion of development of new projects such as OML58 upgrade, Ofon phase II.

The Total boss said the company has faced several challenges operating in Nigeria, which it is well positioned to overcome. He said that there among other challenges, Total’s employees know that from time to time they face the challenge of abduction necessitating that the company ensures maximum security for staff.

Massive oil spill on River Ethiope

 A stretch of River Ethiope, which is the main source of drinking water for rural dwellers in Ethiope West Local Government Area and Ovwore, Eko, Amukpe, Okirighwre, Sapele Okpe and Ogorode communities in Sapele Local Government Area of Delta State, has been polluted by crude oil, leaking from one of the oil pipelines belonging to Nigerian National Petroleum Corporation, NNPC, which runs across the river, at Eko village.

The people of the affected communities have cried out to the federal and state governments, as well as NNPC, Federal Environmental Protection Agency, FEMA, and security agencies to come to their aid and evaluate the crude oil from the river, which is their only source of drinking water and fish farming.

Chairman of Amukpe Community, Deacon Believe Edeki told reporters that the crude oil pollution had already killed a large quantity of aquatic lives in the river and hampered fish farming, which is the major occupation of the rural dwellers on the bank of the river. Deacon Edeki   said the situation could aggravate the insecurity situation in the area, as youths, who were hitherto fish farmers, may resort to crime in order to survive.

Subsidy fraud: EFCC withdraws charges against four

Charges of fraud in the fuel subsidy payments against four suspects have been withdrawn by the Economic and Financial Crimes Commission (EFCC). Those whose charges were withdrawn are Durosola Omogbenigun and Peter Mba along with their firms.

Counsel for the EFCC, Mr. Oyedepo Rotimi, told a Lagos High Court in Igbosere that the charge tagged,  ID/122C/2012, was mistakenly instituted against Omogbenigun, his company Integrated Resources Limited, and Mba and his  Pinnacle Oil and Gas firm.

The EFCC had alleged that they conspired on different occasions to fraudulently collect over N2bn from the Federal Government under the Petroleum Support Fund, purporting the money to be payments for importing certain liters of petrol.

The four were charged with four counts of conspiracy to obtain and obtaining property by false pretences. The anti-graft body said the offences were contrary to Section 8  and 1 (3) of the Advance Fee Fraud and other Fraud Related Offences Act 2006. However, Mr. Oyedepo Rotimi said he was instructed by the Attorney-General of the Federation and Minister of Justice, Mohammed Adoke, to withdraw the case. According to Rotimi, the EFCC found out after a review that the suspects did not commit the offence for which they were to be arraigned.

Justice Samuel Candide-Johnson struck out the charge following an application by the EFCC.

Tuesday, 31 July 2012

Saudi Arabia, Russia & Venezuela now export 21% more crude oil

Saudi Arabia, Russia and Venezuela now export about 21 percent more crude to Asia's biggest buyers compared to a year ago as the sanctions reducing Iran's oil exports have played in their favor. Iran's exports to China, Japan, South Korea and India have fallen by a third in the first six months of the year as EU and U.S. sanctions made it difficult to pay for the crude and find insurance cover for tankers. The United States is also finalizing even tougher sanctions to restrict Iran's oil revenues
As Iran's oil sales declined, the world's top oil exporter Saudi Arabia, Russia and other OPEC producers Venezuela and Angola ramped up their sales to Asia's top oil consumers, where refiners can pick and choose from a variety of supplies in a market flush with crude. Asia is the region where oil demand is growing, as the U.S. economy teeters on recession and Europe tries to stem its financial crisis. 

Japan, South Korea and India all cut imports from Iran to gain a waiver from the U.S. sanctions which threaten to cut off institutions dealing with Iran from the U.S. financial system. China was also awarded a waiver after cutting its imports from Iran due to a dispute over contract terms earlier this year. The EU ban on insuring any Iranian oil shipments also hindered China's imports from Iran.

In the first half of the year, Saudi Arabia boosted sales to the top four Asian buyers by 15 percent year-on-year to 3.8 million barrels per day (bpd). During the same period, Venezuela's year-on-year exports also jumped 42 percent to 596,000 bpd, followed by a 36 percent year-on-year increase in shipments from Russia to 682,000 bpd. Volumes from Angola have risen 24 percent year-on-year in the first six months to 994,000 bpd and 26 percent from Kuwait to 938,000 bpd. China, Asia's top oil consumer and the world's second largest, appeared to favor Russian crude in its purchases during the first six months of the year.

China cut Iranian imports by 20.5 percent during that period to 429,873 bpd, and Chinese data showed it replaced that amount, as well as an additional 11 percent, by imports from Saudi Arabia, Angola and Russia.

Oil subsidy fraud: More marketers arraigned

Lamorde, EFCC Boss
Monday July 30, 2012: More marketers indicted in the oil subsidy scam have been arraigned by the Economic and Financial Crimes Commission (EFCC) before a Lagos High Court sitting in Ikeja. Those arraigned before Justice Adeniyi Onigbanjo include Oluwaseun Ogunbambo, Habila Theck and Fargo Petroleum and Gas Limited.

One of them, Olugbenga Adesanya, was, however, not arraigned alongside others as, according to EFCC, he is "still at large". The arraigned persons and company were among the 17 oil marketers and seven oil companies indicted in the fuel subsidy fraud by the House of Representatives committee.
They were arraigned on a six-count charge bordering on conspiracy, obtaining money by false pretense, forgery and use of false documents. Initially, the charge sheet carried seven counts but one of the prosecuting counsel, Mr Francis Usani, applied to the court to drop one of the charges.

According to the charge sheet, the offenses are contrary to section 8 and punishable under section 1 (1)(2)(3) of the Advanced Fee Fraud and other Fraud Related Offences Act, Laws of the Federation of Nigeria. The offences, the commission further stated, are contrary to sections 363 and 364 of the Criminal Laws of Lagos State of Nigeria No 11, Laws of Lagos State 2011.

The anti-graft agency also alleged that the defendants and the oil company  "on or about February 10, 2012, with intent to defraud, conspired  to fraudulently obtain N976,653,110.28  from the Federal Government of Nigeria by falsely representing that the said sum represented subsidy accruing on importation of 13,627,084 litres of Premium Motor Spirit(PMS) purportedly purchased from Sealac Petroleum Limited and imported into Nigeria through MT Diplomat Ex mT Milleura, which representation they knew to be false."

EFCC also alleged that the accused and the oil company “on the 14th day of October, 2011 at Lagos and within Ikeja judicial division, with intent to defraud and in order to facilitate your obtaining money by false pretense from the Federal Government of Nigeria, under the Petroleum Support Fund, forged a document entitled ‘Certificate of Origin, Port of Loading Antwerp Belgium’ dated the 14th day of October, 2011, purporting the document to have been issued by Seatac Petroleum Limited.”

The defendants, however, pleaded not guilty to each of the six-count charge and their counsel, Mr Babajide Koku (SAN), applied to the court for bail.

Iraqi oil buyers face severe delays

Iraqi oil buyers are facing severe delays at the moment. This is as a result of sabotage. Pipeline maintenances have severely cut and delayed exports of Iraqi oil to Europe's Mediterranean markets, leaving traders to scramble for alternative grades at a time when refiners have already lost Iranian barrels because of sanctions.

Iraqi exports are generally prone to disruptions but a combination of security and infrastructure incidents have pushed loadings delays of Iraqi Kirkuk crude to around 20 days. The development shows the difficulties Iraq, one of the world's largest oil reserves holders, will face in its attempts to triple or even double production from the currently stagnant 3.0 million barrels per day.

Only one of the two lines of the Kirkuk-Ceyhan pipeline, linking Iraqi fields to the Turkish Mediterranean port, is used and flows stop on a daily basis as the pipeline awaits a much needed post-war overhaul. The already poor infrastructure of the pipeline is further weakened by frequent terrorist attacks and a blast this month held up crude oil flows for several days. A 4-day berth maintenance has also added to the delays effectively reducing exports to under 300,000 barrels per day in July, according to shipping data.

OPEC oil output drops as sanctions hit Iran

OPEC oil output fell further from its highest in four years in July as U.S. and European sanctions cut supply from Iran to the lowest in more than two decades. A Reuter’s survey monitored by Nigeria Energy Intelligence showed that supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.18 million barrels per day in July, down from 31.63 million bpd in June.
Oil prices declined below $100 (U.S.) a barrel in June, a level favored by Saudi Arabia and other OPEC members, prompting speculation they might trim supply to prop up prices. There is little evidence to suggest this has happened in July, although the drop in output is larger than some expected to see. OPEC’s production has declined for three months since it pumped 31.75 million bpd in April, the highest since September 2008.  The biggest drop this month came from Iran, whose crude is subject to a European Union embargo that started on July 1. The embargo also bars EU insurance firms from covering Iran’s exports, hindering imports by some non-EU buyers.
The U.S. and European sanctions have pushed Iran from its position as OPEC’s second-largest producer to rank third behind Iraq, which this year is benefiting from a long-awaited expansion in export capacity.