NERC Faults Budgetary Request for PHCN

The Nigerian Electricity Regulatory Commission (NERC) has said requests for budgetary provisions for the privatized successor companies of the Power Holding Company of Nigeria (PHCN) in the 2013 financial year by the National Assembly was unfounded.

NERC that such budgetary demands and justification for the Federal Government to fund the privatized electricity distribution companies beyond 2012 were not necessary considering the existence of the new Multi Year Tariff Order (MYTO-2) methodology. The commission said in a statement from its Assistant General Manager, Media, Maryam Abubakar, that the tariff methodology which was currently in use had provided for the distribution companies to be self-sustaining, stating that it could confirm that some distribution companies were actually meeting up with its financial obligations.

The House of Representatives had recently decried the lack of budgetary provisions for privatized PHCN successor companies in the 2013 budget.The House argued that additional funding for these electricity companies should be made despite the ongoing privatization process which would see new owners take over the companies by mid-2013. They had explained that there was a need to fund these companies in order for them to meet their capital spending obligations.

But NERC noted that the MYTO-2 was computed in a manner to allow the distribution companies pay for the energy delivered to them, meet up with their operational expenditures (OPEX) as well as their capital expenditures (CAPEX). The commission explained that statistics within its possession shows that since the introduction of the MYTO-2 in June this year, one of the companies, Eko Distribution Company was in November 2012, finally able to meet all its OPEX and CAPEX obligations, as well as settle its energy bill, all without subsidy intervention.

Total announces significant oil discovery in the Gulf of Mexico

Total has announced a significant oil discovery at its North Platte prospect on Garden Banks Block 959 in the deepwater Gulf of Mexico. The discovery well encountered several hundred feet of net oil pay in Lower Tertiary sands which included several high-quality intervals.
Total estimates this discovery can have a potential of several hundred million barrels of oil. Further appraisal will be needed to confirm its size and commerciality.
Total is in a strategic alliance with Cobalt International Energy to explore for oil in the Deepwater Gulf of Mexico. The North Platte discovery is the first Lower Tertiary Wilcox formation well drilled by the Alliance. The results of the well confirm the northern extension of the Wilcox formation and the presence of liquid hydrocarbons. Therefore, this validates the major potential of this new exploration area of the Gulf of Mexico in which Total holds a substantial acreage position with several follow-on prospects.
North Platte is located in a water depth of approximately 4,400 feet (1,340 m) and was drilled to a total depth of approximately 34,500 feet (10,520 m).

Total holds a 40% interest in the North Platte discovery along with Cobalt (60%, operator).

Pipeline Projects: Senate demands rationale for $7.9bn Foreign Loans

The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and several state governors represented by their state Finance Commissioners appeared before the Senate to defend the $7.9 billion foreign loans sought from the Exim Bank of China, Islamic Bank, African Development Bank (AfDB) and the French Development Bank (AFD).

The project is part of Federal Government’s proposed pipeline projects under the Medium Term 2012 to 2014 External Borrowing Plans, which is before the Senate Committee on Foreign Loans and Debt.

Okonjo-Iweala, who was represented by the Minister of State for Finance, Mr. Yerima Ngama, had earlier sent the proposed pipeline projects foreign borrowing plan to the upper chamber, which had scaled through several deliberations and readings before it was transmitted to the various committees for final scrutiny.

The breakdown of the loans revealed that all states in the country applied for the loan of about $3.39 billion, while the Federal Government applied for $4.8 billion. Continuation of Eurobond Issuance $1 billion, Diaspora bond$0.1 billion putting the loan of the loan at $9. 005.69 billion.

NNPC Denies Delaying 2013 Budget

The Nigerian National Petroleum Corporation (NNPC) has said it is not in any way causing delays in the passage of the 2013 budget as recently claimed by members of the House of Representatives, explaining that it has entirely cooperated with the legislators in the budget debate processes.

Reacting to claims by the Chairman of the House of Representatives Committee on Finance, Hon. Abdulmumni Jibrin, who had asked Nigerians to hold the corporation responsible for any delay in the passing of the country’s 2013 budget, the General Manager Media Relations of NNPC, Dr. Omar Farouk, said that the corporation could not have been responsible for any delay in the passage of the 2013 budget by the national assembly.

Omar explained that the corporation had severally honoured invitations for appearance from various relevant committees of the national assembly, in which it had made presentations and clarifications on its crude oil production and revenue projection plans, adding that Jibrin’s claims were unfounded.

Chevron announces $36.7 billion capital and exploratory budget for 2013

Chevron Corporation has announced a $36.7 billion capital and exploratory investment program for 2013. Included in the 2013 program are $3.3 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron.
According to the Chairman and CEO John Watson, “Next year’s program supports several projects currently under construction, including our Australian LNG projects and United States deepwater developments. As these and other projects come online, we anticipate production will reach our 2017 goal of 3.3 million barrels per day. With our strong balance sheet and industry-leading producing margins, I further expect to continue our pattern of significant stockholder distributions.”
Approximately 90 percent of the 2013 spending program is budgeted for upstream crude oil and natural gas exploration and production projects. Another 7 percent is associated with the company’s downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products, fuel and lubricant additives, and petrochemicals.