Friday 21 December 2012

Iraq's Oil Surge Could Threaten the Saudis


Iraq’s increased production, combined with the oil shale bonanza in the U.S. and higher output in Libya and Nigeria, is testing Saudi Arabia’s position as the swing producer—the country with enough spare capacity to tap in times of shortage and rich enough to withhold when the market is flooded. Iraq’s current daily production doesn’t yet threaten that role. But with Iraq publicly setting an optimal target of more than 6 million barrels a day, the Saudis may eventually find it hard to rein in their neighbor.
Saudi Arabian Oil Minister Ali Al-Naimi needs to keep oil prices high enough to fund his country’s $600 billion social spending plans—accelerated by the Arab Spring—without incurring the wrath of consumers worldwide. Iraq, now the second-biggest supplier in OPEC, has a different priority: to rebuild its industry after decades of war.
With help from foreign oil companies, Iraq’s daily production surged 650,000 barrels this year to 3.35 million, the biggest annual gain in 14 years, according to data compiled by Bloomberg. The country plans to boost output to 3.7 million barrels a day in 2013 and at some point in the year match its 1979 record of 3.8 million. Libya, rebuilding its industry after last year’s uprising against Muammar Qaddafi, likewise plans to raise output next year, to 1.7 million barrels a day from 1.5 million now.
Brent crude recently traded as high as $110.15 a barrel, but it may sink to $88 by June if OPEC fails to curb supply.
Keeping prices reasonably high will become more challenging for the Saudis should Iran resolve its standoff with the international community over its nuclear research and start pumping oil at pre-crisis levels. Sanctions against Iran, once OPEC’s second-biggest producer, have reduced its exports by 50 percent, according to the International Energy Agency.

Nigeria Ranked Among Africa’s Lowest LPG Consumers


The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, has said that Nigeria is one of Africa’s lowest consumers of Liquified Petroleum Gas (LPG) notwithstanding its current national LPG consumption rate of 110,000 metric tonnes (MT) per annum.
Alison-Madueke, who spoke at the opening of the LPG Strategic Workshop and Conference in Abuja, said growth of the LPG market in Nigeria was a critical component of the nation’s gas master plan which it launched in 2010.
The minister who was represented by the Permanent Secretary of the ministry, Abdulkadir Musa, expressed an urgent need for Nigeria to open up the LPG market for improved energy utilisation and economic growth.

Statoil makes another gas discovery off Tanzania


Norwegian energy firm Statoil made another natural gas discovery in the Lavani-2 exploration and appraisal well in Tanzania.
According to a statement by the company, "Statoil and its co-venturer ExxonMobil Exploration and Production Tanzania Limited will announce updated total volumes in Block 2 next year". "An increase in the upside potential of the Block is expected following further evaluations of the well," it added.

ConocoPhillips to sell its Nigerian assets to Oando for $1.79 bln


Oil giant ConocoPhillips will sell its Nigerian businesses to Oando Energy Resources Inc for about $1.79 billion. Conoco has said it is selling less profitable overseas assets so the U.S. oil company can focus on growing its lower-cost domestic shale oil and natural gas business.
Oando Energy, which is focused on oil exploration and production in Nigeria and the Gulf of Guinea, said it paid $435 million in cash to ConocoPhillips when it signed the deal. The deal, expected to close by mid-2013, includes Conoco's interest in onshore and offshore properties in Nigeria that produced 43,000 barrels of oil equivalent per day through October, the companies said.
Conoco has also announced the sale of its Algerian business to Indonesia's state-run oil company Pertamina for around $1.75 billion.
Conoco's asset sales this year total $11 billion, the Houston-based company said.

Fuel subsidy scam: Noose tighten around Uba


Attempts by the Chairman of Capital Oil and Gas Industries Limited, Mr. Ifeanyi Uba, to exonerate himself of alleged N53.4 billion fuel subsidy scam may have suffered a setback as the Nigerian Police, a London court and the Assets Management Corporation of Nigeria (AMCON) are tightening the noose around him.
Not long after the police authorities issued a report indicting him of involvement in the scandal, a London court which seized Uba’s asset worldwide has refused to vacate its order just as AMCON appealed a separate ruling in favor of the oil chief.
The Federal High Court, Abuja Division had on December 12, 2012 discharged an earlier order (of November 13, 2012) it had made freezing Uba’s property. The court had granted AMCON possession of property belonging to the company and its owner pursuant to Section 49 and 50 of AMCON Act.
The London court case was instituted by Access Bank, which, through Cosmas Maduka’s Coscharis Motors, had advanced Capital Oil a N21 billion loan for PMS importation last year, was again heard on Monday December 3, 2012.
The Special Fraud Unit of the Nigeria Police (in Ikoyi, Lagos) had detained Uba for alleged involvement in a N22.4 billion subsidy scam, just as an Aigboje Aig-Imoukhuede-led Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments, had indicted him, alongside many oil marketers.
It was learnt the oil magnet who is now being monitored by security operatives spent about 11 days in detention, and was released on October 19, 2012.
A police report had affirmed that ``Capital Oil and Gas Limited forged documents, made fraudulent representations, obtained by fake pretences and stole federal Government money by claiming monies paid on these fraudulent presentations.

Lagos Chamber seeks full deregulation of oil sector, scrapping of NNPC


Lagos Chamber of Commerce and Industry, a body of organized businessmen based in Lagos has urged the Federal Government to fully deregulate the oil and gas sector in 2013 beyond the removal of oil subsidy and to scrap the Nigerian National Petroleum Corporation. The chamber suggested that in place of the scrapped NNPC, a regulatory body be set up to properly regulate the oil and gas sector. It also said that the government should take bold steps and privatize all the refineries and depots in the country.
The Chamber in its 2012 end of year business environment assessment report signed by its Director General, Mr Mudal Yusuf said that operators in the oil and gas sector have long proposed as the way forward for the industry “Full deregulation of the downstream oil and gas sector beyond removal of fuel subsidy; immediate privatization of all the refineries; petroleum products depots and pipelines. The Chamber is also in favor of the recommendation that a strong regulator, an equivalent of NCC in the telecom sector be installed in the oil and gas sector and the subsequent scraping of NNPC and its affiliates institutions”.