Saturday, 18 August 2012

PHCN: NLC to commence solidarity strike


The Nigeria Labour Congress said it has concluded arrangements to call workers in the country out on industrial action as solidarity with workers of the Power holding Company of Nigeria, PHCN, who it said, were being unfairly treated by Ministry of Power over their stand that the right things be done before the planned privatization of the PHCN by the Federal Government.
It said it had set up strike mobilization committees across the country preparatory to the planned strike which it said, would commence immediately if there was deadlock in their meeting with the government on Wednesday, next week.
The NLC which addressed the press through its Acting President, Promise Adewumi and Acting General Secretary, Chris Uyot respectively, on the impasse in negotiation between the workers of the Power Holding Company of Nigeria, and the Federal Government, accused the former of being insincere in settling the dispute.
The union said the Federal government reneged on its demand that soldiers should be called off from the PHCN facilities as well as immediate payment of July salary to all PHCN workers for genuine negotiation to commence, saying it was not ready to accept any excuse from the government if the next meeting billed for Wednesday does not address its demands immediately.
The labour also urged the Federal Government to create the enabling environment for a meaningful dialogue just as it asked the government to call the Minister of Power, Professor Barth Nnaji to order, saying the minister has resorted to negative utterances against the workers.

FG indicts Conoil, MRS, Capital Oil, 18 others


The Federal Government has indicted Conoil Plc, MRS Oil and Gas Ltd., Capital Oil and Gas Industry Ltd., and 18 other firms in the fuel subsidy imbroglio. It said that these companies were being investigated based on the evidence that they might have engaged in fraudulent activities under the fuel subsidy regime.
The Ministry of Finance, in a statement gave the names of the other companies as Aluminnur Resources Ltd., Brilla Energy Ltd., Caades Oil and Gas Ltd., Downstream Energy Source Ltd., Eterna Plc and Eurafric Oil and Gas Ltd. Others are Lumen Skies Ltd., Majope Investment Ltd., Matrix Energy Ltd., Menon Oil and Gas Ltd., MOB International Services, Nasaman Oil Services Ltd., Natacel Petroleum Ltd., Ocean Energy Trading and Services, Pinnacle Contractors Ltd., Sifax Oil and Gas Company, Tonique Oil Services Ltd. and Top Oil and Gas Development Company Ltd.
According to the statement, a report by the Presidential Committee on Fuel Subsidy Payments led by Aig Aig-Imoukhuede, had recommended that the firms refund various amounts to the national treasury. The statement said, “There is a second group of companies with infractions which are relatively minor. They are in discussion with the government for a quick resolution of their issues. The government is prepared to settle their claims under the following circumstances. “For oil marketers under investigation for possible refunds to the government, their 2012 outstanding claims will be netted out against their expected refunds to the government and those with a positive net balance, i.e. outstanding claims greater than expected refunds, will be processed and paid. “For marketers with a negative balance with the government, i.e they owe the government more in refunds than the government owes them, the Aig-Imoukhuede committee will accelerate the review of their documents after the Sallah break so that their claims can be processed and settled, if cleared, without further delay.

Friday, 17 August 2012

Brent crude falls on possibility of reserves release


Brent October crude futures fell 1 percent on talk of a possible release of U.S. strategic petroleum reserves and expectations that North Sea output will rebound after maintenance curbs production in September. Front-month U.S. September crude showed resilience, edging up in choppy trade, but gasoline and heating oil futures fell sharply in tandem with Brent's decline.
 After the Brent September contract expired, October Brent pared gains in post-settlement trading on news the White House was "dusting off old plans" for a potential release of strategic oil stocks. Brent bounced off lows on Friday when the head of the International Energy Agency said oil markets were currently well supplied and there was no reason for governments to release oil from strategic reserves. The bounce left Brent on pace for a third straight weekly gain, needing to settle above $112.95 a barrel, while U.S. crude closed in on a 3 percent weekly increase.
Escalating geopolitical tensions over Syria's civil conflict and the dispute over Iran's nuclear program, along with North Sea production curbs and hopes that central banks will provide more stimulus, had combined to pull Brent up since it settled at $89.23 a barrel on June 21.

Oil leak under control - Shell Nigeria


Shell said today it had contained oil leaked from a failed pump within a flowstation on Nembe Creek though local residents disputed this, saying it had spread to mangrove swamps. Shell said it had shut down the oil processing facility over a pump failure, but denied reports that a significant amount of oil had spilled in the area.
The flowstation in the Nembe Creek area of Bayelsa state has been closed. Shell said that “some oil escaped from the seal into the saver pit in the flowstation, with some sheen observed (in the area. The pump has been repaired.” Nigerian NGO Environmental Rights Action sent a team to visit the site and reported that there was a spill. The head of the group, Nnimmo Bassey, described the spill as extensive.
Oil spills from equipment failures or loading accidents are common in the swampy Niger Delta region of Africa's top energy producer.
The Anglo-Dutch oil major says locals sometimes exaggerate the impact in the hope of boosting their compensation claims.  The government and oil firms have pledged to clean up the region and other parts of the Delta, but residents say they have seen very little action.  Armed gangs also tamper with pipelines to steal crude and Shell's Nembe Creek trunk line has been subject to numerous spills in recent years, many due to sabotage.
A landmark UN report in August last year slammed the government and multinational oil companies, particularly Shell, for 50 years of oil pollution that has devastated the Ogoniland region of the Niger Delta. The government and oil firms have pledged to clean up the region and other parts of the Delta, but residents say they have seen very little action.

EFCC Takes Over Illegal Oil Bunkering Vessel


The Economic and Financial Crimes Commission (EFCC), has taken possession of an illegal oil bunkering vessel suspected to be carrying 300 metric tonnes  of  illegally refined  Automotive Gas Oil also known as diesel. The vessel, MT Ocean Treasure, alongside eight crew members and three staff of Vital Shipping Limited, Apapa, owners of the vessel, were handed over to officials of the commission.
The crew members are: Ayoade Emmanuel, Stephen Bamgbose, Idowu Balogun, King. C. Fred,  Michael Ekanem,  Olorunwa Omowunmi, Felix Ayenuberu and Suru Lepe; while the three staff on board the vessel are: Onuoha Ikechukwu, Omodara Emmaneul and Faith Akhahowa.
Duniya David, Principal Maritime Safety Officer of NIMASA, who handed over the vessel and crew on behalf of the Director General of NIMASA, Mr. Haruna Baba Jauro, urged the commission to carry out further investigation on the source of the petroleum product and the operations of the vessel.
Receiving the document transferring the vessel and crew, Usman Ladan Baki assured Nigerians, that the EFCC will do its best in investigating the case.
 According to a statement from the EFCC spokesman, Wilson Uwujaren, reports showed that the vessel was first sighted on August 5, 2012 by NIMASA enforcement team on routine patrol off Escravos.  Their attention was drawn to the vessel because it wasn’t carrying a registered flag and they gave it a chase. In the encounter and ensuing gun fight, the vessel and its crew escaped. The boat conveying the patrol team ran out of fuel and had to make a retreat.  The boat later capsized and one of the patrol team members died. On account of this, NIMASA officials kept a tab on the vessel and eventually arrested it as it attempts to move into the Lagos Harbour.

Subsidy Re-investment Programme Gulps N105bn


Federal Government has expended a cumulative sum of N105 billion for the Subsidy Reinvestment and Empowerment Programme (SURE-P) over the period of seven months. The programme was set up as an intervention fund charged with the responsibility of overseeing and ensuring the effective and timely implementation of projects to be funded with savings accruing from the partial removal of subsidy on petrol.
 However, the nationwide public mass transit buses, which government bandied as one of the measures adopted to mitigate the high cost of transport fares has not been purchased contrary to the widely held belief that some of the new buses commissioned in various states and Federal Capital Territory (FCT) are part of the subsidy reinvestment regime. The Chairman of SURE-P Committee, Dr. Christopher Kolade, disclosed this in Abuja while answering questions from reporters on the activities of the body to actualize the projects promised by the Federal Government as the benefits of fuel subsidy removal policy.
Kolade explained that the Federal Government, as can be verified by the monthly media publications of the Ministry of Finance, releases the sum of N15 billion monthly as funds to be utilized for various projects within the scope of the SURE-P. He further stated that the total sum of N180 billion is expected to be approved for the programme before the end of the year but explained that not all the funds being granted for the scheme has been released.
Meanwhile, the heads of various sub-committees including Mazi Sam Ohuabunwa, Comrade Peter Eselle, and Mr. Audu Maikori amongst others gave a break-down of their budgets and various works-in-progress. They explained that the programme, which is effectively operational in six out of the 14 pilot states have gulped N3.9 billion for youth empowerment, while mass transit scheme have the sum N8.9 billion allotted to it resting at the  Bank of Infrastructure while N5 billion is being expended on various rail projects in the country; the sum of N2.3 billion for the Abuja-Kaduna rail line modernisation project, which is being handled by the CECC, while the N2.2 billion Port Harcourt-Markudi rehabilitation project is being carried out by ESSA West Africa Limited; and works at the N383 million worth Jebba-Kano project is being done by Costain West Africa Limited.

Thursday, 16 August 2012

OPEC New Secretary General: Saudi Arabia, Iran & Iraq seek top post


Saudi Arabia, Iran and Iraq are seeking the top post of the new OPEC Secretary General which will be vacant by the end of 2012. However, OPEC has delayed a meeting of officials to help select its new secretary general as such delicate talks could reignite rivalry for influence amongst the contenders.
A panel of officials was initially planned to convene at the Vienna headquarters of the Organization of the Petroleum Exporting Countries during August, but the meeting is now more likely to take place in October. OPEC has often struggled to agree on a secretary general and the task of appointing a successor to the outgoing Abdullah al-Badri comes as Western sanctions on Iran have heightened political tensions within the 12-member group.
Without a decision on the post before December, OPEC could start 2013 without a permanent figurehead, potentially adding to its difficulties in managing the oil market should predictions of a slowdown in global oil demand prove to be correct.
Four of OPEC's 12 members have put forward potential successors to Badri, a Libyan whose term finishes at the end of 2012. Saudi Arabia nominated its OPEC governor, Majid Al-Moneef, for the role followed by Iraq, which proposed Thamir Ghadhban, energy adviser to Iraq's prime minister while Iran nominated a former oil minister, Gholam Hossein Nozari.
OPEC officials have also raised the possibility of Badri being asked to remain in the post beyond the end of his term if a successor cannot be chosen. That would mean OPEC waiving its own rule that the secretary general serve no more than two three-year terms

Diesel price drops on back of improved power supply


The demand for diesel has reduced significantly over the past few weeks, causing the price of the product to drop by 6.05 percent. This follows a significant increase in power supply levels across the country, from the national grid, in the same period.
Diesel, which sold weeks back, for N165 per litre at fuel stations, now sells for N155, a drop of N10 per litre, a positive development for users and a pain for importers. Many parts of the country have in recent times experienced improved power supply. Only on Tuesday, the country hit a record level of 4,477 megawatts in power generation.
The new peak exceeds the record level of 4,337 megawatts, achieved on Monday, August 6,  this year, by 240 megawatts. Before then, it was about 3,800 megawatts. The improved electricity supply, according to industry insiders has been as a result of increased gas supply to the power generating stations, the strengthening of distribution networks and transmission lines, and the fact that some of the National Integrated Power Projects have started contributing to the national grid.
Bart Nnaji,  minister of Power, has attributed the sharp increase to gas availability, and praised the Nigeria Gas Company (NGC),adding “gas is coming up gradually and when fully stabilised, we can easily hit 5,000MW.” Strengthening this position, are the additional distribution networks which have come on stream in some strategic locations across the   country.

http://www.businessdayonline.com/NG/index.php/news/76-hot-topic/42930-diesel-price-drops-on-back-of-improved-power-supply 

Wednesday, 15 August 2012

Brent oil dips below $114 as supply fears ease


Brent crude oil futures dipped below $114 per barrel as supply disruption concerns faded slightly. Worries about disruption to supply, while still a significant factor, eased after the United States said it did not believe Israel had made a decision to attack Iran.
U.S. Defense Secretary Leon Panetta, who visited Israel two weeks ago, told reporters it was important that military action should be the last resort. His remarks helped ease worries of a conflict after Israeli Prime Minister Benjamin Netanyahu said that most threats to Israel's security were dwarfed by the prospect that Iran could obtain nuclear weaponry.
Brent crude was down 33 cents at $113.70 per barrel after ending up 43 cents at its highest settlement since May 3. U.S. crude fell 42 cents to $93.01 after closing 70 cents higher. Brent has swung between a high of more than $128 per barrel and a low of $88.49 this year as investors' focus has shifted between heightened Middle East supply worries and a weakening growth outlook. The range of nearly $40 is the widest since 2009, when it was $40.91. In 2011 the range was $34.65 and in 2010 $27.33.

Looming Oil Marketers Strike over Subsidy Disbursement


Nigeria may soon experience yet another fuel crisis as major and independent oil marketers have vowed to suspend their operations in days ahead over the continued delay in payment of their fuel subsidy claims by the Federal Government. In addition, the alleged plans by government to release only N21 billion monthly for subsidy payment has pitched the marketers against the government.
The marketers under the aegis of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA), Jetty and Petroleum Tank Farm Owners of Nigeria (JEPTFON) and Major Oil Marketers Association of Nigeria (MOMAN) have resolved to shut down their facilities nation-wide should government fail to commence the payment of their outstanding entitlements.
Nigeria’s daily fuel consumption stood at about 60,000 metric tons (mt) per day, but was reduced to about 35,000 mt, in a move, which according to the Petroleum Minister, Mrs. Diezani Alison-Madueke, was aimed at ensuring transparency and efficiency in the fuel import scheme. However, the marketers argued that with the current daily consumption of about 35,000mt per day, it means that about 1,050,000 mt tons of premium motor spirit is consumed monthly, which translates to about $1,050,000,000 monthly at an average price of $1,000 per metric ton. They noted that the subsidy element, which is about 35 percent, will bring the average amount per month to about $367,500,000 (N60,637,500,000), pointing out that with the new payment method, it will take government almost three months to pay one month claim.
The Presidential Committee on Fuel Subsidy Payment headed by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhede, had in its report noted that  both the Nigerian National Petroleum Corporation (NNPC) and the marketers made total claims of N2,109,386,944,946.92 in 2011, with the NNPC claiming N981,734,423,649.56, while the oil marketing and trading companies submitted claims of N1,127,652,521,297.36.

Tuesday, 14 August 2012

Oando makes OML56 Discovery


Oando Energy Resources Inc. has announced the initial drilling results from the fourth well drilled in the Ebendo Marginal Field's OML-56, (previously known as Obodeti/Obodugwa).
The EB-4 well was spud on March 24, 2012 and was drilled to a total depth (TD) of 12,120ft measured depth (MD) on June 11 th, 2012. The well, which was intended to appraise the updip portion of the structure, encountered eight new hydrocarbon bearing sands over an interval from 9,667ft to 11,182ft, each with individual reservoir thicknesses of between 21ft and 110ft. These sands were in addition to the producing sand target previously encountered in the first well (EB-1).
The deepest of the newly appraised sands, contained in Level XXa, was perforated and tested. The well flowed over 950bopd of 49 degree API oil during a well flow test using a 24/64" adjustable choke. Further well tests will be conducted over the next few days on the next sand (Level XIX). Level XIX was the primary target for the well, as it was the only identified producing sand from the single producing well in the field. These test results may not necessarily be indicative of the well's long-term performance or of ultimate recovery.
The Company intends to complete the EB-4 well as a Dual String producer prior to commencing drilling on the EB-5 well, which is intended to appraise the shallow hydrocarbon bearing sands encountered in EB-4.
OER has a 42.7 % Non-Operating interest in the Ebendo Marginal field.

Perennial Power Outages: EPRA to rescue


The federal government will soon embark on total implementation of the provisions of the Electricity Power Reform Act (EPRA) of 2005 in order to tackle the perennial power outages being experienced in the country.
Minister of Power, Prof. Barth Nnaji made this known in a press briefing in Abuja after meeting with President Goodluck Jonathan on the performance of his ministry in the implementation of the 2012 budget. He was accompanied by his state counterpart and the Senior Special Adviser to the President on Media and Publicity, Dr Reuben Abati.
The EPRA Act provides in its preamble that companies will be formed to take over the functions, assets, liabilities and staff of the Power Holding Company of Nigeria (PHCN) in order to “develop a competitive electricity markets.” It also provides for the establishment of the Nigerian Electricity Regulatory Commission (NERC), “to provide for the licensing and regulation of the generation, transmission, distribution and supply of electricity.” The NERC, the Act stipulates further, will also enforce performance standards, consumer rights and obligations and provide the determination of tariffs and other related matters.
The federal government also has in view the completion of 156 on-going projects across the country in order to facilitate the job of the Transmission Company of Nigeria (TCN), which will soon partner private sector investors in the provision of power to the people of the country.
Nnaji who described power and its provision as the biggest constraint of the nation, said that the ministry received the sum of N75.5 as budgeted for 2012,  while the National  Assembly  provided for N78 billion, the difference being the lawmakers’ additions for some constituency projects. He also disclosed that the ministry’s performance in the implementation of the budget was 52.9%, explaining that out of the 75.4 Billion budgeted for capital project; N21.5Billion has been released while the amount used is N11.4Billion.

Monday, 13 August 2012

BP sells US refinery for $2.5 billion


British energy group BP said that it had agreed to sell its Carson refinery in California to US peer Tesoro Corporation for $2.5 billion. The sale is part of BP's previously-announced plans to sell $38 billion of assets by the end of 2013 to help pay the clean-up bill and compensation costs from the devastating 2010 US Gulf of Mexico oil spill.
The troubled energy major has agreed to sell $26.5 billion of assets since the start of 2010, including the latest deal. BP said that the Carson sale would allow it to focus its investment and operations on the British group's three refineries in the northern United States. The group had announced in February 2011 that it would sell off two major US refineries -- including Carson -- as part of a restructuring to shift its focus away from the United States and to meet its compensation costs. It also intends to offload the Texas City facility which suffered a deadly 2005 explosion that killed 15 workers and sparked safety concerns across its US operations.

Brent hits 3-month high above $114


Brent crude rose above $114 per barrel to its highest in more than three months as Israel's comments on stopping Iran from proceeding with a disputed nuclear programme stoked worries about a disruption in supply from the region.
Prime Minister Benjamin Netanyahu had said that most threats to Israel's security were "dwarfed" by the prospect of Iran obtaining nuclear weaponry. Those comments overshadowed recent forecasts of a further slowdown in oil demand growth due to a weak economic outlook in the United States and Europe. The debate in Israel whether to go to war against Iran over its nuclear programme intensified during the weekend, worrying oil investors who see it as defying appeals by U.S. President Barack Obama to allow more time for international diplomacy.
Brent crude, which hit $114.28 -- its highest since May 4, traded 41 cents up at $113.36 a barrel by 0635 GMT, gaining for six out of the past seven sessions. U.S. oil rose 18 cents to $93.05, after ending 49 cents lower at $92.87.

Sunday, 12 August 2012

Iraq oil output exceeds 3 million barrels mark


For the first time since the 2003 U.S.-led invasion that toppled Saddam Hussein, the Organization of Petroleum Exporting Countries (OPEC) said that Iraq’s crude output has risen above 3 million barrels a day. Iraq pumped 3.08 million barrels a day in July, 115,000 barrels more than the previous month.
The Persian Gulf state for a second month outpaced Iran, whose output dropped by 173,000 barrels to 2.82 million. Iraq last produced more than 3 million barrels in February 2002, OPEC said after revising its April estimate.
The reduction from Iran came as full sanctions by the EU started July 1, which led to the third monthly decline in the group’s output. OPEC, which supplies 40 percent of the world’s oil, produced 31.2 million barrels a day in July against 31.35 million in June, according to OPEC data.
Iraqi production is increasing as overseas investors such as Exxon Mobil Corp. and BP Plc develop new fields and rework older deposits. The country has held several licensing rounds for oil and gas fields since the end of Saddam Hussein’s rule and more than two decades of stagnation caused by wars, sanctions and underinvestment.

We were misled to reflag Iranian ships - Tanzania


Tanzania said a shipping agent based in Dubai had reflagged 36 Iranian oil tankers with the Tanzanian flag without the country's knowledge and approval. Tanzania said it was now in the process of de-registering the vessels after an investigation into the origin of the ships concluded they were originally from Iran. Tanzania launched an investigation over accusations that it had reflagged oil tankers from Iran and asked the United States and European Union to help it verify the origin of the tankers flying the east African country's flag.
Howard Berman, the ranking member of the U.S. House Committee on Foreign Affairs, had accused Tanzania of reflagging at least six and possibly as many at 10 tankers, saying it was helping Iran evade U.S. and European Union sanctions aimed at pressuring Tehran to curb its nuclear program. He said Tanzania could face U.S. sanctions for the practice.
Re-flagging ships masks their ownership, which could make it easier for Iran to obtain insurance and financing for the cargoes, as well as find buyers for the shipments without attracting attention from the United States and European Union.
 The National Iranian Tanker Company (NITC) changed the names and flags of many of its oil tankers ahead of the EU ban, part of sweeping economic measures aimed at pressuring Tehran to end its nuclear program.
The ships flying Tanzania's flag were re-flagged by Zanzibar, which has claimed it was misled by its Dubai-based agent, Philtex, and would end its contract with that firm.

N1 billion Contract scandal hits Petroleum Ministry


House of Representatives Committee on Petroleum Resources (Upstream), has ordered the Minister of Petroleum Resources and the contractor to appear before it to explain the circumstances surrounding the payment of over N1.1 billion for a contract that was not performed. The committee, led by Hon Ajibola Muraina, decided to summon the minister and the contractor when it became obvious that a vessel, which had not been supplied to Petroleum Training Institute, PTI, Effurun, near Warri, Delta State, three years after it was supposed to have been delivered, had allegedly attracted a demurrage of over N600 million at $2,000 per day.
The Auditor-General of the Federation, in a report, had recommended that the contractor should refund the money to the federal government with interest.
Hon. Muraina said the Acting Principal/Chief Executive of PTI, Mrs. Nnenna Dennar, informed the committee that the dive support sea-going vessel was in the custody of the Nigerian Embassy at Singapore, but information at the disposal of the National Assembly indicated that the vessel might not even be in existence and the facts of its non-existence had to be established.
Members of the House committee, who were on an oversight function, were taken aback when they were told that another N900 million was required to convert the vessel to a dive-support ship , almost the equivalent of what was used to purchase the vessel itself.