The law and the regulation governing the operation of the West African Gas Pipeline (WAPCO) is the subject of an amendment in Lomé, this Thursday, September 26, 2019. Experts, delegates and parliamentarians of the four countries that are part of this transnational mechanism (Nigeria, Ghana, Benin and Togo) are meeting in a workshop that was opened by Dèdèriwè Marc Ably-Bidamon, Togolese minister of mines and energy, and also president of the Committee of Ministers of the West African Gas Pipeline Project .

Indeed, the meeting “aims first of all to imbue you with the realities of the West African Gas Pipeline, after eight years of operation,” said the Togolese minister. It is also for these actors to harmonize their points of view, “on amendments that the test of time, or the experience of exploitation have made necessary”.

The experts will thus floor on the proposals of amendment of the law of WAPCO and its regulation with the institutions concerned. The idea being to submit the harmonized proposals for adoption by the parliaments of the four States Parties.

This solidarity tool between the four countries of West Africa, with an estimated cost of $ 974 million, aimed at its launch to provide gas with a maximum capacity of 13.45 million cubic meters per day to countries such as Benin, Togo, Ghana and Nigeria . Launched since the beginning of this decade, its functioning has, however, been undermined by cash and unpaid issues vis-à-vis some partner countries.

As a reminder, these negotiations take place in a context where Nigeria has closed its borders with its western neighbors, particularly Benin, and consequently Ghana and Togo. A closure that is not without consequences on the economies of these countries and continues without the authorities of Abuja announce end date.

Source: Agence Ecofin

NIPCO Plc, has declared N254 billion turnovers and a profit after tax of N1.58 billion for 2018 financial year just as it deepened its petroleum products outlets expansion and doubled its Liquefied Petroleum Gas (LPG) market share in Nigeria.

The Company Chairman, Chief Bestman Anekwe, who declared this at 15thAnnual General Meeting of the company in Abuja, maintained that these achievements were recorded in the face of the prevailing difficult environment, which had prevailed in the sector in the last few years.

The Board of Directors, he said, proposed a total dividend of N563 million translating into 300k per share from the profit after tax ,which was unanimously approved by the shareholders .

Stating that the result achieved even in the face of the challenging business environment, made the company to feel proud, Anekwe noted that NIPCO Plc has maintained its culture of outstanding performance and industry leadership by focusing on pursuing its major objectives.

“We are yet improving on our core competencies and remain committed to our vision of being the First choice company in the Oil & Gas Industry to all stakeholders

“We have maintained a constant expansion of our retail outlets and furthermore our company has maintained the lead in the LPG subsector by doubling the number of LPG skids and plants all over the country “the chairman pointed out

Said he :” Our strategy and approach in venturing into the upstream sector hopefully will give us a competitive advantage to explore even new frontiers in the business environment.”

Chief Anekwe noted that regardless of the prevailing difficult environment in the downstream sector in 2018, NIPCO was able to sustain its steady growth through strategic expansion of some of its core business activities and made a turnover of about N254B and a profit after tax of N1.5B.

According to him, the result is rather commendable considering the prevailing operating environment in the sector ,which NIPCO was not immured adding “we are hopeful that we will sail on calmer waters in the coming year.”

Meanwhile, NIPCO Plc has announced plans to go into production of Liquefied Petroleum Gas (LPG) in new investments surge.

Managing Director of the company, Mr. Sanjay Teotia, who disclosed this on the sidelines of NIPCO’s 15th Annual General Meeting (AGM) in Abuja, pointed out that conscious efforts are in place in preparation for the take off of the LPG production.

“Your company is thinking of venturing into LPG production against the background of the nation’s richness in natural gas. In the near future, we are going into its production,” he said.

The strategy to diversify and grow the streams of income through the expansion of the company’s oil and gas business, Teotia said, would gain more momentum.

Currently in LPG storage space, NIPCO, the company’s helmsman said, “we not only possess the largest but the most active as well as the supplier of choice.

“Our shareholders will continue to smile with good returns on their investment year in year out but with a caveat that challenges in the sector are addressed headlong by concerned stakeholders” ,he asserted.

Source: Oriental News

Within a one-year period covering August 2018 to July this year, the country earned a total of N5.37tn from oil, figures obtained from the Central Bank of Nigeria have revealed.

The amount is contained in the economic report of the CBN for the month of July, a copy of which was obtained by our correspondent in Abuja on Friday.

The amount was earned from four major sources of oil revenue. They are crude oil and gas exports; Petroleum Profit Tax and royalties, domestic crude oil and gas sales, and others.

A breakdown of the N5.37tn showed that the sum of N346.45bn was earned from crude oil and gas exports, while N3.59tn was collected from the PPT and royalties.

In the same vein, the sum of N1.31tn was realised from domestic crude oil and gas sales, while about N60.82bn was received from other oil revenue items.

A monthly breakdown of the N5.37tn showed that the sum of N403.6bn was earned from oil in August, while September, October, November and December had N471.1bn, N422.1bn, N601.0bn and N441.3bn, respectively.

In January, the country earned N417.3bn from oil; February, N479.5bn; March, N516.9bn; April, N472.4bn; May, N410.2bn; June, N336.6bn; and July, N387.7bn.

Findings further revealed that throughout the 12month period, the Federal Government could not achieve its budgeted monthly oil revenue of N640.2bn

It was learnt that the inability of the government to meet its oil revenue target of N640.2bn was due to production shut-down and closure of various terminals due to fire and flooding.

The Minister of Finance, Mrs Zainab Ahmed, last week expressed concern about the country’s medium-term fiscal challenges, particularly in the area of revenue generation.

She said that the 2020 budget would be predicated on a lower oil production of 2.18 million barrels per day and lower benchmark oil price of $55 per barrel.

In the 2019 budget, the budget benchmark was based on 2.3mbpd oil production and $60 per barrel benchmark.

She said, “Oil production volume is projected to average 2.18mbpd for 2020. Although this is lower than the projected oil production volume of 2.3mbps for 2019, we believe that this is a more realistic projection. For 2021 and 2022, the projections are 2.22mbpd and 2.36mbps respectively.”

Explaining the reason for the cut in oil price benchmark, Ahmed said that this was done considering the fact that there would be glut in the oil market.

She said there were strong indications of an oversupplied oil market by next year, adding that when this happened, it would result in a fall in oil prices.

The minister said all three major forecasters,  the Organisation of Petroleum Exporting Countries, the International Energy Association and the United States Energy Information Administration, had predicted that non-OPEC countries would grow oil production by about two million barrels this year and produce even more next year.

According to her, while the US shale oil accounts for most of the total supply increase, new projects in Norway, Brazil and Australia will also contribute to the increase in the non-OPEC supply.

She said, “A lower oil price benchmark of $55 per barrel is assumed, considering the expected oil glut in 2020 as well as the need to cushion the unexpected price shock.

“There are strong indications of an oversupplied market in 2020. Oil projection volume is projected to be average 2.18mbpd for 2020. Although this is lower than the projected oil production volume of 2.3mbpd for 2019, we believe that this is the realistic projection.”

Copyright PUNCH.

Oil posted its biggest ever intraday jump, briefly surging above $71 a barrel after a strike on a Saudi Arabian oil facility removed about 5% of global supplies and raised the specter of more destabilization in the region.

In an extraordinary start to trading on Monday, London’s Brent futures leaped almost $12 in the seconds after the open, the most in dollar terms since their launch in 1988. Prices have since pulled back about half of that initial gain of almost 20%, but are still heading for the biggest advance in almost three years.

For oil markets, it’s the single worst sudden disruption ever, and while Saudi Arabia may be able to return some supply within days, the attacks highlight the vulnerability of the world’s most important exporter. They also revive political risk in prices, with the heightened danger of conflict in a region that holds almost half of global crude reserves.

“We have never seen a supply disruption and price response like this in the oil market,” said Saul Kavonic, an energy analyst at Credit Suisse Group AG. “Political-risk premiums are now back on the oil-market agenda.”

The dramatic move in oil reverberated around financial markets. Haven assets including gold and Treasury futures surged on concern over the geopolitical fallout from the attacks. Currencies of commodity-linked nations including the Norwegian krone and the Canadian dollar also advanced. U.S. gasoline futures jumped almost 13% before paring their increase to around 8%.

State energy producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-largest oil field in Khurais.

The disruption surpasses the loss of Kuwaiti and Iraqi petroleum output in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil production in 1979 during the Islamic Revolution, according to the International Energy Agency.

“The vulnerability of Saudi infrastructure to attacks, historically seen as a stable source of crude to the market, is a new paradigm the market will need to deal with,” said Virendra Chauhan, a Singapore-based analyst at industry consultants Energy Aspects Ltd. “At present, it is not known how long crude will be offline for.”

Saudi Arabia can restart a significant volume of the halted oil production within days, but needs weeks to restore full output capacity, people familiar with the matter said. The kingdom — or its customers — may use stockpiles to keep supplies flowing in the short term. Aramco could consider declaring itself unable to fulfill contracts on some international shipments — known as force majeure — if the resumption of full capacity at Abqaiq takes weeks.

That would rattle oil markets further and cast a shadow on Aramco’s preparations for what could be the world’s biggest initial public offering. It’s also set to escalate a showdown pitting Saudi Arabia and the U.S. against Iran, which backs proxy groups in Yemen, Syria and Lebanon. Iran-backed Houthi rebels in Yemen claimed credit for the attack, but U.S. President Donald Trump and Secretary of State Mike Pompeo have already pointed the finger directly at Iran.

Trump, who said the U.S. is “locked and loaded depending on verification” that Iran staged the attack, earlier authorized the release of oil from the nation’s emergency reserves. The IEA, which helps coordinate industrialized countries’ emergency fuel stockpiles, said it was monitoring the situation.

“No matter whether it takes Saudi Arabia five days or a lot longer to get oil back into production, there is but one rational takeaway from this weekend’s drone attacks on the kingdom’s infrastructure — that infrastructure is highly vulnerable to attack, and the market has been persistently mispricing oil,” Ed Morse, Citigroup Inc.’s global head of commodities research, wrote in a note.

Brent jumped more than 19% to $71.95 a barrel on ICE Futures Europe, its biggest gain in percentage terms since 1991. In the ensuing hours, it pared that advance to trade up 9.5% at $65.92 a barrel as of 10:25 a.m. in London. The global benchmark crude could rise above $75 a barrel if the outage at Abqaiq lasts more than six weeks, Goldman Sachs Group Inc. said.

On the New York Mercantile Exchange, West Texas Intermediate futures were frozen for about two minutes after the scale of the move delayed the market open. When it finally started trading, WTI jumped more than 15% to $63.34 a barrel, the most since 2008. It was at $59.73 as of 10:26 a.m. London time.

The attacks “set the stage for a Monday-morning mini-massacre of any market participants holding short positions or bearish expectations,” said John Driscoll, chief strategist at JTD Energy Services Ltd. in Singapore. The “price move was exacerbated by the unprecedented magnitude of the outage on the world’s key supplier and the potential for escalation of geopolitical skirmishes involving the U.S., Saudi and Iran.”

The drama wasn’t limited to flat prices. The spread between Brent and WTI widened as much as 37%, showing that the oil spike will affect global prices more than those in the U.S., where shale output and ample supplies provide more of a buffer.

Brent’s six-month backwardation jumped to the highest level since September 2013 as the outage raised concerns about obtaining near-term supplies. And the call-put skew flipped into positive territory for the first time since 2018, indicating that options traders are willing to pay more to place a bet on prices rising rather than falling.

Source: Bloomberg

As Nigeria goes on appeal to set aside the huge cash awarded by a British commercial and arbitration court to an offshore compaany over a botched gas supply contract, indications emerged, weekend, that the government might have written off the claimant as non-existent enterprise.

The government is said to have been convinced by several documents at its disposal that the company, which claims to be registered in Nigeria and abroad, merely exists in the minds of those trying to extort money from Nigeria for rendering no service.

The argument of the government, Vanguard learned, stems from the fact that Process and Industrial Development Limited, P&ID, which claimed to have entered into a multi-million naira gas supply business with Nigeria does not have any registered presence anywhere.

Citing a document filed in court by the company, a top government official said the address of a multimillion naira company involved in engineering and gas procurement business was simply “using a lawyer’s office and post office box as its corporate address.”

The court document sighted by Vanguard last night shows that P&ID’s address in Tortola is attached to ‘Trident Chambers, P.O. Box 146 with no physical complex of its own in the BVI.

Similarly, efforts by a team of Economic and Financial Crimes Commission operatives to locate its Nigerian address quoted in the court paper as 12, Vaal Street, Maitama, Abuja, has proved abortive.

“There is no such office in Maitama and the people we found there have no idea of such a company operating in the place,” a top EFCC official confirmed last night.

Vanguard gathered last night that the government is likely to argue that the controversial entity does not deserve to be awarded such huge amount, especially as it does not have any known presence either in Nigeria or anywhere else.

It is also to argue that the company didn’t bring any capital importation into the country and never invested a dime to warrant any compensation.

It said: “This government will not negotiate with questionable characters who are merely seen to be actively trying to extort money from the government and people of Nigeria.

“It is obvious from the documents available before us that some elements in Nigeria have connived with some foreign collaborators to rip off the commonwealth of Nigeria.”

How project failure affected Addax Petroleum’s plan to end gas flaring

Meanwhile, the failure of the controversial P&ID’s gas pipeline project scuttled the plan of Addax Petroleum Nigeria Limited to end associated gas flaring in Oil Mining Lease, OML 123.

Investigation by Vanguard, weekend, indicated that OML 123 is Addax Petroleum’s largest licence area, located offshore approximately 60 kilometres south of Calabar, Cross River State and covers an area of 90,700 acres (367 km2), with nine producing oil fields – Adanga, Oron West, North Oron, Ebughu and extensions, Adanga North Horst, Inagha, Kita Marine, Bogi and Mimbo.

Addax Petroleum, which started operations in Nigeria after signing two Production Sharing Contracts, PSCs, in 1998, with the Nigerian National Petroleum Corporation, NNPC, had concluded plan to harness and deliver 100 million standard cubic feet, scf of associated gas to P&ID Limited for processing.

The top management personnel of the company, including the managing director, Mr. Yonghong Chen, did not take telephone calls nor respond to emails, when Vanguard contacted them repeatedly for comments, yesterday.

But a source in the Department of Petroleum Resources, DPR confirmed that associated gas flaring has not ended in OML 123.

Why P&ID selected Addax

The founder of P&ID, Michael Quinn, who explained how Addax Petroleum was selected as gas supplier recently said: “From information available in the public domain and from our own researches, it was clear that there was more than enough Wet Gas off the coast of Calabar to support a gas stripping and propylene plant operation in the Calabar area processing a Wet Gas throughput of 400 MMSCuFD We also became aware that the Government had initiated the building of a pipeline from OML 123 to Calabar (the Adanga Pipeline).

“At this stage we felt that we were in an excellent position to make a persuasive case to the Government to enter into an agreement to implement the Project. The President of Nigeria at that time was the late President Yar’Adua. He was also the Minister of Petroleum Resources, although he later appointed a separate Minister.”

He said: “In summary our proposal was that we would take Wet Gas free of charge from the Government, process it to produce Lean Gas, and return the Lean Gas to the Government free of charge to be fed into the national power grid, with the capacity to generate over 2,000 additional megawatts of electricity for the economy. The idea was for P&ID to generate revenue (and profit) from the NGLs.”

He said: “There would be two phases. Phase 1 would be the construction by P&ID of the gas stripping plant which would separate the NGLs from Wet Gas, at the end of which process would emerge, amongst other by-products, propane, butane, condensate and Lean Gas. The propane, butane and condensate would be sold on the international markets for P&ID’s account, and the Lean Gas delivered to the Government free of charge. Phase 1 was planned to take two years to implement after the grant of the necessary approvals by the Government.

“Phase two would be the construction by P&ID of the polymer grade propylene plant. Once constructed it would use the propane produced by the gas stripping plant as a feedstock for the propylene plant to produce polymer grade propylene for sale on international markets. Polymer grade propylene is a valuable industrial feedstock for the manufacture of various different products, and would be expected to achieve a significantly higher price than the Propane. Lean Gas would continue to be delivered to the Government free of charge. Phase 2 was planned to take an additional 15 months to implement.”

Aftermath

He said: “The day after the signing of the GSPA, on 12 January 2010, I wrote to the Minister on behalf of P&ID to inform him that P&ID wished to commence work at once, and wished “to put in place all necessary modalities as soon as possible, with both Addax Petroleum and Exxon Mobil, in order to ensure the timely delivery of the currently flared Wet Gas for the project” (page 152 of MQ1). Given that P&ID had no contractual relationship with the IOCs, I requested the support and co-operation of NNPC, NAPIMS6, and the Director of the DPR to assist in finalizing these arrangements with the IOCs.Close

“I was keen to implement the GSPA as soon as possible. Moreover, although I was aware, of course, that the Government had, to all intents and purposes, access to virtually unlimited supplies of Natural Gas in the vicinity of Calabar, I wished to minimize any delay which might be caused by the operators of the 2 concessions that had been identified as likely sources of Wet Gas for the project. P&ID required from the Government certain up to date information which would be critical to the construction of the gas processing facility which P&ID would be building in Calabar to strip the Wet Gas.”

Site selection

He said: “In the meantime, the site for the onshore plant at Calabar for thise construction of the gas stripping plant and gas storage facilities had been selected by P&ID and secured from the Government of Cross River State. On 1 February 2010 Mr. Hitchcock wrote to the Governor in Calabar requesting the formal allocation of the land upon which the plant would be constructed (pages 157 to 158 of MQ1). On 16 February 2010 approval was granted, by the Government of Cross River State, to P&ID, for the allocation of Parcels 1 & 2 of the Energy City (Industrial) at Adiabo in Odukpani Local Government Area, containing an area of about 50.662 hectares of land, for the industrial use of P&ID (pages 159 to 160 of MQ1).”

Construction

Unfortunately, construction of the project did not commenced, a development which scuttled the initial plan to utilise associated gas from Addax Petroleum.

Read the original article on Vanguard.