OIL PRICE NG

The Federal Government is set to shut down all its oil refineries in its effort to secure funding and a model to upgrade them, the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) said yesterday.

In statements posted on Twitter, Kyari said the oil industry will look to cut costs and extend payments wherever possible to survive oil prices that hit 18-year lows late last month.

“Today, after proper scoping, which was not done in the past, we know exactly what to do to get them back on stream,” Kyari said.

The three Nigerian refineries have worked only sporadically due to years of underinvestment. The government has been working to revamp them but has struggled to find external financing to do so. Running the refineries has proved costly for Nigeria, as they are decades old and poorly maintained.

While Kyari said they had secured funding without providing details, several previous deals to fund repairs have fallen through, and a source close to the discussions told Reuter’s other funding had yet to be confirmed.

Aside from proper scoping, we’re also going to have an Operation & Maintenance (O&M) contract, a different model of getting the refineries to work. We are looking at the NLNG structure where world-class processes will always be in play. We’ve seen it work before with success.

The Nigeria LNG model is run by international companies such as Shell, Total and Eni alongside NNPC.More in Home

Kyari also expressed optimism that a meeting this week between OPEC and other producers could yield a fresh deal to shore up oil prices. “We believe the ongoing engagements between global oil producers will bring back demand and once that happens, the market will balance and fully recover by year-end,” he said.

 Vanguard

The Nigerian National Petroleum Corporation says demand for Nigeria’s crude oil in March dropped by 6.8 million barrels due to the COVID-19 pandemic.

The Group Managing Director of NNPC, Mele Kyari, said this on Channels Television’s Sunrise Daily programme on Wednesday.

Kyari said the drop in the demand for oil was not peculiar to Nigeria but global.

When asked how Nigeria’s crude is doing on the international market, he said, “Well, it is doing badly but it is improving. Last week, it went down to close to $15 per barrel but as I speak this morning, we are at $32.79 to a barrel.

“So, we think with all the engagements going on, countries going back to work like in Europe means consumption will come back, demand will rise because we have lost about 6.8 million barrels of demand in March alone.

“And when things come back, the market will balance and make sure that the market recovers. I am sure you are aware of all the engagements that have gone on internationally with OPEC, producers and the partners to make sure that there is balance.”

Kyari expressed optimism that things would rebound before the end of the year.

source: Punch

According to Anna Belova, senior oil and gas analyst at GlobalData: “Gas flaring is not only a pollution issue, but also represents significant forgone revenues and economic loss. Ten countries flared over 9.5 billion cubic feet of gas per day (bcfd) in 2019, which exceeded Germany’s demand for natural gas that year. The value of gas flared by top ten countries exceeds US$9.5bn if priced at the US Henry Hub gas prices and adds to $19bn if priced at the UK National Petroleum Board (NPB) prices.”

Belova said lack of access to markets and small volumes of gas produced at individual sites typify the main reasons behind significant flaring volumes globally. Low domestic gas prices in the US, Russia, Iran, Nigeria and Algeria further exacerbate the situation.

In Nigeria, however, the federal government has approved the Nigerian Gas Flare Commercialisation Programme. The programme which was launched in 2016 will offer flare gas for sale by the government through a transparent and competitive bidding process.

A structure has been devised to provide project bankability for the buyers of flared gas.

The purpose of the gas flare commercialisation programme is to reduce the flaring and venting of associated methane gas.

The Department of Petroleum Resources (DPR) recently extended the Bid Submission Due Date (BSDD) of the Request for Proposal (REP) of the Nigeria Gas Flare Commercialisation Programme (NGFCP) by six weeks.

Paul Osu, Head, Public Affair at DPR, who made the announcement in a statement said the extension was sequel to the bidder’s conference which held on February 17, 2020 in respect to the NGFCP.

“Accordingly, the new submission due date shall be April 10. Consequently, qualified applicants should note that inputs, comments and observations on the draft Gas Sales Agreement (DSA) Milestone Development Agreement (MDA), Connection Agreement (CA) and Deliver or Pay Agreement (DoPA) posted on the portal were expected on or before March 5.

“Furthermore, the DPR shall provide relevant updates for data prying and leasing in the data room as necessary within the next one week,” he said.

Osu said that in a bid to further incentivise the programme, the minimum floor price for flared gas would be $0.25 per million standard cubic feet (mscf) for land sites; swamp and shallow offshore sites would be $0.15/mscf, while the minimum floor price for deep offshore would be $0.10 /mscf.

Source: Business Day