The Department of Petroleum Resources (DPR) has transferred Oil Mining Licence (OML) 98 to the Nigerian Petroleum Development Company (NPDC), stating the federal government is considering transferring five others, which were recently revoked.
DPR had earlier revoked the previously operated by Pan Ocean Oil Corporation and five others belonging to Allied Energy Resources Nigeria (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110), and Summit Oil International (OPL 206).
The federal government had ordered the revocation, justifying the decision as a move to “recover legacy debts” owed by the companies operating the licences.
In an event to transfer the asset, Director of DPR, Sarki Auwalu, who stressed that move was in the economic interest of Nigerians, especially the shareholders, stated that there are about 42 million barrels oil deposit in the block.He added that there are 20 million barrels of condensate as well as 393 billion standard cubic feet of gas.
Auwalu warned NPDC to put the asset to best use, stressing that government would not fail jail individuals, who treat the oil assets with levity.”If there any failure we will not hesitate to jail whoever is responsible,” Auwalu said. He said government is interested in helping investors make returns on investment, stressing that organisation must take advantage of alternative dispute resolutions instead leaving investment in limbo.
“We are not for any legal battle. Everything can be settled with alternative dispute resolutions because we need our assets to work for the interest of stakeholders,” Auwalu stated, while urging investors to be proactive and always consider economic value.
While reassuring the regulators of Pan Ocean’s commitment to a smooth transition, Mr. Olajide Ishola, chief operating officer, Pan Ocean said, “since last year when the revocation of the asset came into effect, a lot of things were left in limbo. This meeting set the tone for the handover and future of the asset. In the months ahead, we will continue to work closely with regulators to ensure that there is no significant disruption in production as a result of change in ownership.”
Pan Ocean has engaged in economic activity on OML 98 since 1973. Within the period, the company created jobs, contributed to the development of critical national oil and gas assets, and improved infrastructure in host communities.
Petrol Imports: Marketers Raise Concerns Over Dollar Shortage
While the landing cost of petrol has tumbled on the back of the sharp drop in crude oil prices, major fuel marketers are not keen to resume the importation of the product as access to dollar is seen as a major hurdle.
The Nigerian National Petroleum Corporation (NNPC) has been the sole importer of petrol into the country for more than two years, after private oil marketers stopped importing the commodity due to crude price fluctuations, among other issues.
The federal government had on March 18, 2020 directed the NNPC to reduce the pump price of petrol to N125 per litre, noting that the expected open market price of imported petrol had fallen below N145 per litre.
The Petroleum Products Pricing Regulatory Agency said it would continue to monitor trends in market fundamentals and announce a monthly guiding/expected open market price at the beginning of every month, effective April 1, 2020.
After a meeting on March 19, industry stakeholders resolved to await the decision of the PPPRA board meeting slated for March 20 on the new petrol template for price modulation.
They declared support for the opportunity given to private sector players to resume importation of the PMS, according to a statement signed by the Major Oil Marketers Association of Nigeria, the Depots and Petroleum Products Marketers Association of Nigeria, the PPPRA and the NNPC.
“Nobody has told us where we are going to get foreign exchange from,” the Chairman, MOMAN, Mr Adetunji Oyebanji said, noting that the significant drop in the landing cost had made it profitable to import petrol.
He described the availability of dollars as critical, saying one cargo of petrol could cost up to $20m.
He said, “In the past, people would open letters of credit but they would not get the dollars to liquidate the LCs for a long time and sometimes, by the time they got the dollars from the banks, naira might have fallen. So, it means you have to go and look for more naira to liquidate the LCs.
“That is why I said availability of dollars is very key, so that when you are making the order for the product, you can make the payment immediately.”
Oyebanji noted that with the fall in crude oil prices and the actual reduction in sales, the availability of dollars would go down.
The Central Bank of Nigeria (CBN) had on March 20 adjusted the official exchange rate to N380/$1 from N307/$1, a development many analysts have described as naira devaluation.
The MOMAN boss said the adjustment would enable everyone to buy the dollar at the same rate “but the problem now is availability.”
He said the meeting held on March 20 was inconclusive, adding that the new template for petrol pricing had not been issued.
We’ll Sustain Power Transmission Despite COVID-19 – TCN Workers
Employees of the Transmission Company of Nigeria (TCN) branch of the Senior Staff Association of Electricity and Allied Companies have vowed to sustain the evacuation of electricity despite challenges posed by the spread of coronavirus.
According to the President, TCN Branch of SSAEAC, Abidemi Dairo, the management of the transmission company has been proactive since the outbreak of the virus by ensuring the protection of workers.
Dairo disclosed this while speaking on the failure of the national body of SSAEAC to release the N25m check-off dues that was meant for the association’s branch at the TCN.
He noted that the TCN workers on essential duty had sustained the wheeling of electricity across the country to ensure Nigerians got supply, as latest industry report showed that transmission infrastructure did not hinder power generation.
The report stated that on March 27, 2020, “4,144.5 megawatts (of electricity) was not generated due to unavailability of gas.
“Zero megawatt was generated due to unavailability of transmission infrastructure, while 211.1MW was not generated due to high frequency resulting from unavailability of distribution infrastructure.”
Meanwhile, Dairo described the non-payment of the check-off dues of the TCN workers by the national body of SSAEAC as illegal.
US Crude Dips Below $20 As Lockdowns Hit Demand
Oil prices fell sharply, yesterday with U.S. crude briefly dropping below $20 and Brent, hitting its lowest level in 18 years, on heightened fears that the global coronavirus shutdown could last months and demand for fuel could decline further.
Brent crude, the international benchmark for oil prices, was down $2.09, or 8.4 per cent, at $22.84 by 0917 GMT, after earlier dropping to $22.58, the lowest since November 2002.
U.S. West Texas Intermediate (WTI) crude fell $1.11, or 5.2 per cent to $20.40.
Earlier in the session, WTI fell as low as $19.92.
The price of oil is now so low that it is becoming unprofitable for many oil firms to remain active, analysts said and higher-cost producers will have no choice but to shut production, especially since storage capacities are almost full.
“Global oil demand is evaporating on the back of COVID-19-related travel restrictions and social distancing measures,’’ said UBS oil analyst, Giovanni Staunovo.
“In the near term, oil prices may need to trade lower into the cash cost curve to trigger production shut-ins to start to prevent tank tops to be reached,’’ he added.
Rystad Energy’s Head of Oil Markets, Bjornar Tonhaugen said the oil market supply chains are broken due to the unbelievably large losses in oil demand, forcing all available alternatives of supply chain adjustments to take place during April and May,’’ including cutting refineries runs and increasing storage.
Besides demand destruction, oil markets have also been slammed by the Saudi Arabia-Russia price war that is flooding markets with extra supply.
An official from Saudi Arabia’s Energy Ministry said last Friday that the kingdom was not in talks with Russia to balance oil markets despite rising pressure from Washington to stop the rout that has cut prices by more than 60 per cent this year.
With world demand now forecast to plunge 15 million or 20 million barrels per day, a 20 per cent drop from last year, analysts say massive production cuts will be needed beyond just the Organisation of the Petroleum Exporting Countries.
“OPEC, Saudi Arabia and Russia could mend their differences, but there’s not that much OPEC could do
“…. The demand shock from COVID-19 is just too big,’’ said Lachlan Shaw, National Australia Bank’s head of Commodities Research.
The contango spread between May and November Brent crude futures reached its widest ever at $13.45 a barrel, while the six-month spread for U.S. crude broadened to minus $12.85 a barrel, the widest discount since February 2009.
Prompt prices are lower than those in future months in a contango market, encouraging traders to store oil for future sales.
Asian shares also slipped on Monday despite the all-out efforts of central banks to bolster markets with rate cuts and asset-buying campaigns.
China’s central bank unexpectedly cut the rate on reverse repurchase agreements by 20 basis points on Monday, the largest in nearly five years, as authorities ramped up steps to relieve pressure on an economy ravaged by the coronavirus pandemic.
Niger Delta3 days ago
Returnee Nigerian Assaults Health Workers Over Self-Isolation
Featured3 days ago
FG Orders Abuja, Lagos, Ogun Lockdown …Suspends Operations Of Passenger Planes, Private Jets …Promises Relief Materials As Positive Cases Hit 111
Editorial3 days ago
No To Generator Ban Bill
Niger Delta3 days ago
Contractor Threatens To Shut Down Isolation Centre
Politics2 days ago
Wealthy Nigerians, Religious Groups Must Give Back To The People -Commissioner
Business3 days ago
Dollar Sells For N402 As CBN Suspends Forex Sale
Politics3 days ago
Buhari, Jonathan, Others Congratulate Tinubu At 68
News3 days ago
Reduce Fuel Price To N90 Per Litre, PDP Urges FG