Category: News

The National Bureau of Statistics has revealed that the average retail price per litre of Household Kerosene (HHK) paid by consumers in January 2023 was N1,362.27. Ads by 00:52 / 04:01 This is an increase of 23.33% compared to N1,104.61 a litre of kerosene recorded in December 2022. NBS stated this in its latest price watch report published on its website.

On a month-on-month basis, the average retail price for a litre of kerosene rose by 5.84% compared to N1,287.10 recorded in November 2023.

Breakdown of Kerosene price by states On state profile analysis, the highest average price per litre in December 2023 was recorded in Abuja with N1,650.00, followed by Ogun with N1,609.52 and Benue with N1,594.44. On the other hand, the lowest price was recorded in Kwara with N917.14, followed by Rivers with N969.70 and Nassarawa with N1,071.43., Punch reports. Breakdown of Kerosene price by zones In addition, analysis by zone showed that the South-West recorded the highest average retail price per litre of Household Kerosene with N1,455.21, followed by the North-West with N1,420.48, while the South-East recorded the lowest with N1,264.49. Kerosene price by gallon NBS also revealed that the average retail price per gallon of household kerosene paid by consumers in December 2023 was N4,529.92, indicating a decline of 1.17% from the N4,583.44 average consumer price recorded in November 2023.

On a year-on-year basis, this increased by 20.69% from N3,753.38 in December 2022. State breakdown by gallon On state profile analysis, Bauchi recorded the highest average retail price per gallon of Household Kerosene with N5,600.00, followed by Lagos with N5,273.53 and Ekiti with N5,234.38. On the other hand, Delta recorded the lowest price with N3,234.29, followed by Bayelsa and Kaduna with N3,538.03 and N3,560.00, respectively. Analysis by zone showed that the North-East recorded the highest average retail price per gallon of Household Kerosene with N5,077.08, followed by the South West with N5,014.48, while the South-South recorded the lowest with N3,957.17 in the last month of 2023.

“Full List”: 7 major marketers get approval to sell Dangote fuel Earlier, Legit.ng reported that about seven major oil marketers in Nigeria have registered with the Dangote Petroleum Refinery to lift and distribute refined petroleum products from the plant.

Dealers under the auspices of the Major Oil Marketers Association of Nigeria (MOMAN) confirmed on Sunday, January 14, 2024, that with the registration, they would begin the distribution of fuel produced at the plant once the commercial terms are finalized.

source: Legit

The decline in oil rigs in Nigeria is threatening the government’s move to raise oil production to 1.7 million barrels per day (bpd) this year.

The country’s oil and gas sector, which has generated a significant chunk of government revenue and foreign exchange earnings for many years, is in desperate need of rescue.

Data obtained from Baker Hughes Incorporated and the Organization of Petroleum Exporting Countries (OPEC) showed that all through 2023, Nigeria’s rig count, which depicts the level of oil production activities by operators, averaged 14, a sharp decline from 35 in 2018.

According to Austin Avuru, executive chairman of AA Holdings, Nigeria’s oil industry is facing a stark reality check as it needs 45 new rigs to reach “normal” production levels of 2.1 million barrels per day (bpd).

“To arrest the natural decline and add 800,000 barrels per day over two years will require 426 wells including 106 exploration and appraisal wells as well as 320 development wells,” Africa Oil & Gas Report, an energy intelligence publication, quoted Avuru as saying. “For this, 45 rigs must be on duty, so the country needs an investment of $7.6 billion in oil well costs alone.”

Jim Orife, former general manager of Nigerian National Petroleum Company (NNPC) Ltd, said there was little or no strategy for implementing any energy plan policymakers had drawn up in the last 10 years.

“We have remained on the same spot if you ask me. We are not unlocking anything,” Orife, a foundation staff member of NNPC in 1977, said at the recent National Association of Petroleum Explorationists conference.

Another challenge facing the industry is the sales of assets by oil majors such as Shell, ExxonMobil, Eni and TotalEnergies.

BusienssDay’s findings showed fields that once accounted for more than two-thirds of all Nigerian oil production no longer represent value for multinationals, whose access to financing is critical for their development.

“Divestments by oil majors used to provide local operators an opportunity to prove their mettle, taking declining fields past production peaks, and improving host community relations to deliver higher royalties to the government; now local operators are scrambling to extract value from divested fields,” an energy lawyer at a Lagos-based oil firm said.

Analysts say this spate of divestments in an oil industry troubled by existential threats without new investments could herald Nigeria’s decline as a major oil producer.

“Despite the introduction of the Petroleum Industry Act, regulatory agencies still demand for bribes or incentives to attend to licences and approvals of oil rigs, and the delay in the process and bureaucratic obstacles did not change,” a senior industry source who pleaded not to be quoted said.

Another major concern is the business operating models in Nigeria’s oil and gas sector.

NNPC uses joint venture agreements with local and international oil companies to produce in onshore and shallow-water oil wells. It owns 60 percent of benefits in these agreements but often fails to contribute its share of costs, leading to what is known as cash call arrears in the industry.

“This development means rig maintenance is often neglected, leading to equipment failures and environmental spills,” Niyi Awodeyi, CEO of Subterra Energy Resources Limited, said.

Most of these fields are troubled by sabotage and local community issues, forcing its multinational partners to opt out.

Under Nigerian law, they are required to decommission these fields – essentially leaving them the way they met them environmentally – but the costs are enormous. So they found a creative solution by selling their stake to local oil companies.

“This exodus not only deprives Nigeria of the much-needed technical expertise and investment but also raises concerns about the long-term viability of the sector,” Awodeyi said.

The Norwegian oil corporation Equinor ended its three-decade partnership with Africa’s biggest oil producer in late November, announcing that it had sold its Nigerian subsidiary to a little-known local business called Chappal Energies.

This is not a unique occurrence. Italy’s Eni declared in September that it would sell its onshore division to the local business Oando. Before this, China’s Addax sold its four oil blocs to the Nigerian National Petroleum Company during the previous year.

Subsequently, the US behemoth ExxonMobil intends to sell four onshore oilfields for approximately $1.3 billion to Seplat, an energy business dual listed in London and Lagos. Only a few days after initially approving the contract in August 2022, former president and oil minister Muhammadu Buhari changed his mind. The transaction is still pending.

Similar circumstances have befallen Britain’s Shell, which has indicated that it would like to withdraw from onshore fields that might bring in up to $3 billion but is still mired in legal disputes that are impeding its progress.

Source: https://businessday.ng/energy/oilandgas/article/rig-count-in-delta-fails-to-match-nigerias-1-7mbpd-target/?amp=1

Globally, the average cost of a liter of gasoline is 1.30 USD. However, these costs vary significantly between countries.

As stated by GlobalPetrolPrices.com, “richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices.”

The pricing differences between countries are due to different petrol taxes and subsidies. All countries have access to the same international petroleum pricing but choose to levy various taxes. As a result, the retail cost of gasoline varies.

According to GlobalPetrolPrices.com, here are the top 10 African countries with the cheapest fuel at the outset of 2024.

Libya

At the top of the list is Libya, with an astonishingly low fuel price of $0.031 per litre. It’s all thanks to their massive oil reserves and government subsidies, making them the world’s second cheapest gas station after Iran.

Algeria

With a fuel price of $0.342 per liter, Algeria secures the second position. The country is a major player in the global oil and gas market, allowing it to maintain relatively low fuel prices.

Angola

Angola, ranking sixth globally, boasts a fuel price of $0.362 per liter. The country is a significant oil exporter, and its relatively low fuel prices are attributed to its oil production capacity.

Egypt

With a fuel price of $0.403 per liter, Egypt stands as the seventh cheapest country globally. Egypt has a diverse energy mix, including natural gas and petroleum, contributing to its ability to maintain low fuel prices.

Sudan

Sudan secures the fifth position among the top 10 African countries with a fuel price of $0.700 per liter. Regardless of facing economic challenges, Sudan manages to keep fuel prices relatively low, ensuring accessibility for its citizens and supporting various industries.

Nigeria

Nigeria, the largest oil producer in Africa, ranks 22nd globally with a fuel price of $0.722 per liter. While being a major player in the global oil market, Nigeria faces challenges such as corruption and infrastructure issues that impact its ability to provide even more affordable fuel to its citizens.

Tunisia

Tunisia, with a fuel price of $0.824 per liter, holds the 27th position globally. The country benefits from a diversified economy and strategic geographic location, contributing to its ability to maintain reasonable fuel prices.

Gabon

Gabon, with a fuel price of $1.002 per liter, is the eighth African country on the list. While slightly higher than some of its counterparts, Gabon’s fuel prices remain relatively affordable, supported by its oil production and export activities.

Liberia

Liberia, with a fuel price of $1.021 per liter. Despite facing challenges such as limited infrastructure, Liberia manages to keep its fuel prices comparatively low, supporting economic activities and transportation.

Ghana

Closing the top 10 list is Ghana, with a fuel price of $1.033 per liter. Ghana has seen steady economic growth, and its efforts in diversifying its energy sources contribute to maintaining affordable fuel prices for its citizens.

source: https://businessday.ng/energy/oilandgas/article/top-10-african-countries-with-cheapest-fuel-at-the-outset-of-2024/?amp=1

In a significant milestone for Nigeria’s oil industry, the Dangote refinery is set to receive its first major crude oil shipment today. The OTIS tanker, laden with a substantial 950,000 barrels of Agbami crude oil, is currently on its way to Lekki, Nigeria, marking a notable commencement of operations for the refinery.

Scheduled to dock at approximately 1900 GMT (8 pm Nigerian time), this delivery signifies the first substantial crude supply to Dangote’s offshore crude receiving facility. The Suezmax tanker, which set sail on December 6 under the charter of NNPCL, is tracked by S&P Global MINT and is headed for Lekki, the closest accessible land port to the Dangote refinery.

This inaugural shipment heralds the operational start of the Dangote refinery, a key addition to Nigeria’s oil refining infrastructure.

As per S&P, the OTIS tanker embarked with its cargo of Nigeria’s Agbami crude on December 6, making its way towards Lekki. Agbami, operated by Chevron, is among Nigeria’s largest deepwater ventures, producing about 100,000 barrels per day in the central Niger Delta. Agbami’s light sweet crude is notable for its high naphtha and kerosene yield, with a gravity of 47.9 API and low sulfur content.

NNPCL has arranged for additional tankers to transport more crude from Nigerian offshore fields to the refinery later in the month.

Previous reports by Nairametrics on November 2 stated that NNPCL plans to supply the 650,000 barrels per day capacity Dangote oil refinery with up to six crude oil shipments in December for testing. The report highlighted that six shipments amounting to 200,000 barrels per day are scheduled for December as part of a year-long agreement. Subsequent months’ volumes will be decided based on mutual agreement and availability. There were also mentions of 4-5 cargo shipments, roughly equivalent to at least 130,000 barrels per day.

The refinery had experienced several delays after its initial commissioning earlier this year. Dangote Group CEO, Devakumar Edwin, had previously set deadlines for diesel and aviation fuel refining, which were missed, as reported in a September 2023 interview with S&P Global Commodity Insights.

On November 26, Aliko Dangote confirmed the refinery’s operational commencement in December 2023. Starting with an initial capacity of 350,000 barrels a day, Dangote also noted that an agreement had been reached for the first delivery of about 6 million barrels of crude in December 2023.

Source: nairametrics.com

The recent OPEC+ meeting concluded with decisions leading to extra “voluntary” production cuts among its members. As the effects of these decisions begin to materialize, market reactions have been somewhat unexpected. Brent crude prices initially dipped following the announcement, only to experience a slight rebound the following Friday.

These additional cuts have effectively eliminated the previously anticipated surplus for the first quarter of 2024, replacing it with a projected small deficit. ING Bank anticipates this shift towards a deficit could provide upward momentum for oil prices. Consequently, ING is considering a potential increase in its current forecast of $82 per barrel for the quarter and $88 per barrel for the entire year of 2024.

However, ING notes that the real impact will depend on OPEC+’s approach to reversing these cuts and how the demand scenario unfolds next year.

Surprisingly, the market did not respond with an immediate price surge post-announcement, as is typically expected. This reaction might stem from the nature of the cuts being voluntary, suggesting a challenge within OPEC+ to reach consensus on production adjustments. As ING points out, “These voluntary cuts imply growing difficulties among members to agree on collective action, indicating potential challenges for future coordinated responses.”

The meeting began contentiously, with a four-day delay due to disagreements among African members seeking higher quota targets, while countries like Saudi Arabia shouldered the brunt of recent reductions. Once resolved, the decision to increase output cuts lost its expected impact due to the voluntary nature of the commitments.

This shift signifies a departure from traditional cartel dynamics, leaning more towards a loose agreement that may or may not significantly influence the market. The lack of a clear direction from this meeting left the markets somewhat directionless.

Specifically, eight OPEC+ members announced voluntary reductions totaling around 2.2 million barrels per day for the first quarter of the next year. This figure includes Saudi Arabia’s ongoing voluntary cut of 1 million barrels per day and Russia’s 500,000 barrels per day. The remaining “additional” and “voluntary” cuts amount to less than 900,000 barrels per day not yet accounted for in market pricing. Countries including Iraq, UEA, Kuwait, Kazakhstan, Algeria, and Oman pledged these additional cuts.

For African nations like Angola and Nigeria, who have been operating below capacity yet resisted further quota reductions, Angola’s quota was adjusted to 1.1 million barrels per day, and Nigeria’s was increased to 1.5 million barrels per day. However, Angola stated it would not adhere to this quota, further diminishing the cartel’s influence. If these cuts had been uniformly agreed upon by all OPEC+ members, their impact on oil prices would likely have been more significant. Instead, the individual members were given considerable leeway in a non-binding agreement. Consequently, the potential reduction of less than 900,000 barrels per day in the first quarter might not even materialize. If market conditions remain robust, these barrels could be reintroduced into the supply chain.

The New York Times aptly summarized the evolving scenario, describing OPEC as “losing power in the oil market at a time when oil is losing power with cost-wary and climate-conscious consumers.” The publication highlighted that U.S. production contributed significantly, around 80 percent, to the global oil supply increase this year.

The recent OPEC+ meeting revealed the actual extent of the cartel’s market influence. About a month before the meeting, the Cato Institute argued in a comprehensive report that OPEC’s role is more political than fundamentally oil-related. They posited that OPEC’s perceived control is more about political leverage, benefitting both its members and Western leaders, rather than genuine market control. The institute noted that OPEC nations view their oil output as a tool for international negotiation. This perceived influence lends them a certain degree of legitimacy, which is mutually beneficial for the West, as it provides a convenient scapegoat for oil price volatility. This perspective aligns with the New York Times’ observation that the majority of the year’s additional oil supply came from the U.S., and it challenges the rationale behind the proposed “NOPEC” (No Oil Producing and Exporting Cartels) legislation. This bill, reintroduced by a group of bipartisan U.S. senators, aims to amend U.S. antitrust laws to eliminate the sovereign immunity that protects OPEC+ members from lawsuits over price collusion.

The decision for voluntary cuts at the Thursday OPEC+ meeting, which suggests a shift towards individual decision-making within the cartel, could further diminish the perceived “legitimacy” upon which the above-mentioned political charade relies.

Source: orientalnewsng.com

Africa’s biggest oil refinery and the world’s largest single-train facility, Dangote Oil Refinery may run into a deep financial crisis from rapidly increasing interests amounting to millions of dollars indicating a possible takeover of the  project by the Assets Management Corporation of Nigeria (AMCON).Dangote Oil Refinery, a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria, was expected to commence production in 2016 with $3.3billion financing secured in 2013.With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to the financial institutions is estimated to hit $8.4billion by 2025. Presently, this debt burden has risen to 7billion dollars with debt servicing of almost 700million dollars per annum.The completion date of the refinery had been moved eight times. Whilst some might say this is not in the character for Dangote Industries and their numerous projects across different sectors, the problem is deeply rooted.A contractor at the delayed refinery project, speaking under the condition of anonymity, said that poor planning, underpayment of contractors, and a lack of proper project management with over 40 contractors on site has led to most of the delays. He also added that of the 40, none is willing to commission as there is no clear delegation of duty and over-decentralization leading to absolute chaos.With these incessant delays, some financing banks are already calling in their loans amid fears of liquidity crisis, while others are elated by the guarantee of huge interests to be recouped as soon as the refinery comes on stream.Dangote has been able to restructure the facilities from various local and international banks twice so far, most banks have totally refused to restructure for the third time with principal repayment also falling due as well as the annual interest payments.The Nigerian National Petroleum Corporation (NNPC) has made available $3.8billion as part of federal government’s 20% equity in the project, providing $1billion cash, while the remaining $2.8billion will be in crude supply.However, analysts have pointed out that NNPC’s 20% equity at $3.8billion makes the Dangote refinery overvalued at $19billion.When Aliko Dangote unveiled early plans for the refinery in September 2013 and announced that he had secured about $3.3 billion in financing for the project, the refinery was estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group and the remainder via commercial loans, and begin production in 2016.However, after a change in location to Lekki, construction of the refinery did not begin until 2016 with excavation and infrastructure preparation, and the planned completion was pushed back to late 2018.In July 2017, major structural construction began, and Dangote estimated that the refinery would be mechanically complete in late 2019 and commissioned in early 2020. Experts, however, posit that the construction would likely  take at least twice as long as Dangote publicly stated, with refining capability not likely to be achieved until 2025.Meanwhile, last week the Minister of State for Petroleum Resources, Timipre Sylva, reiterated that Federal Executive Council (FEC) approved the acquisition of 20 per cent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refinery.Sylva, while briefing State House correspondents after the virtual FEC meeting presided by Vice President Yemi Osinbajo on Wednesday at the Presidential Villa, said that the acquisition was in the sum of $2.76 billion.“The Executive Council also approved the acquisition of 20 percent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refineries in the sum of $2.76 billion,” he said.This development has been described by industry observers as strange because $2.76 billion falls short of 20 percent of the Dangote project valued by the sponsor at $16 billion. Using the $16billion value, 20 percent should be $3.2billion and analysts have expressed dissatisfaction at the disparity in the project’s value and NNPC’s funding.Speaking with MMS Plus on the complexities with funding Dangote refinery, the Managing Director of Cowry Assets Management, Mr. Johnson Chukwu argued that the banks wouldn’t have any challenge from the financing because Dangote would have to pay the interests.“I don’t see the banks being unable to meet their liquidity because of the monies tied down in the Dangote refinery. Ultimately, if the investment is economically viable, when it starts operation it should be able to meet up the arrears. I believe the banks that went into this project understood some of these constraints and didn’t break their balance-sheets in the move to finance Dangote refinery. I don’t envisage any bank having a liquidity challenge as a result of investing in Dangote refinery. If there is any challenge it would come from Dangote, but it should be resolved when the project takes off,” he said.Commenting on the possibility that NNPC over-valued or under-valued the project in its 20% equity, Chukwu opined that NNPC may be looking at an enterprise valuation while the other value could be the net value.“The enterprise value could be higher than the amount Dangote has invested in the project. However, I wasn’t involved in determining that, so anything I say will be purely speculative,” he said.Despite the massive support of the federal government on the refinery project, things have gotten so bad for the billionaire that even income from his other businesses may not be enough to cover the interest rates, talk less of the principal.The $8.4billion debt represents 75% of Dangote’s net worth at $11.1billion and Africa’s richest man has to seek innovative ways to prop up his business now as the refinery project continues to be consistently delayed.In a related development, Nigeria’s controversial PIB Amendment and the crude swap saga has been described by industry observers as another attempt by the federal government to give a monopoly of importation for petroleum products into the country to Messrs Dangote.

Is this a ploy to ensure Dangote can make the excessive and extra profits he needs to manage his rising debt profile for the refinery under the guise of ongoing refinery projects? Nigerians will bear the brunt of the higher costs in petroleum products at a time when subsidies are reduced, analysts posit.Meanwhile, in a bid to address the flaws in the PIB, Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) have noted some downstream observations and recommendations for the Senate and House Committee reports on the PIB.A copy of this report obtained by MMS Plus last week, pushed for the deletion of some clauses in the PIB such as; Clause 317 (8),  (1-3)The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining. To support this, license to import any product shortfalls shall be assigned only to companies with active local refining licenses and Import volume to be allocated between participants based on their respective production in the preceding quarter.Commenting on this, the groups noted that a licensing regime for importation be included in section 174 and the conditions for licensing be open and transparent, ensuring free market competition and a level playing field for all parties to enhance market efficiencies.The groups also highlighted Clause 317 (8)(4) “Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme” as a provision that should be deleted as it will destroy the private businesses that currently supply the market (through importation) diesel, Aviation fuel, Kerosene, Base oil, LPG etc, adding that the job and taxation losses will be huge.Meanwhile, Clause 317 (8) (5) “To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February, 2020 on adoption of the Afri- Fuels Roadmap” was also recommended to be deleted because technical specification for products are better not hardwired in legislation, should be done through regulation by the Authority.“A holder of a license or permit shall not, without the prior written consent of the Authority, assign or transfer its License or Permit or any right or obligation arising from the license or permit,” on Clause 117 (1) was also recommended to be expunged as it would amount to over-regulation of the downstream. This was a provision carried forward from the upstream due to its nature and implications for national security.Other parts of Clause 117 from 2-7 were highlighted for deletion; (2)An application for assignment or transfer of a license or permit shall be made to the Authority, which may require the applicant to publish a notice of the application in the form, manner and time prescribed by regulation under this Act. (3)The Authority shall, in the determination of whether a license or permit is to be assigned or transferred, (a) follow the same procedure with appropriate modifications; (b) apply the same rules and criteria; (c) consider the same issues as if the party to whom the License or Permit is being assigned or transferred is applying for a new License; and (d) consider the representations made to it by third parties in respect of the application.On the aspect that the Authority shall, subject to subsection (3) of this section, communicate in writing, its approval or refusal of an application for assignment or transfer of a license or permit within the time prescribed by regulation under this Act. (5)Where the Authority does not approve or refuse an application and fails to communicate its decision to an applicant for the assignment or transfer of a license or permit within the prescribed time, the application shall be deemed to be approved.Where the Authority refuses the grant of an application for an assignment or a transfer of a license or permit, it shall communicate to the applicant the reason for the refusal and shall give reasonable time within which further representation may be made by the applicant or by a third party in respect of the application. (7) Where the Authority grant consent to an assignment or transfer of a license or permit, it shall notify the applicant in writing, subject to any condition it may consider appropriate.

source:mmsplugng.com

Following GMD of NNPC Mallam Mele Kyari intervention in the National Association of Road Transport Owners (NARTO)/Petroleum Tanker Drivers (PTD) impasse, PTD has just announced the suspension of its planned strike until closure of discussion between both parties.