The interim order of forfeiture granted the antigraft agency, the Economic and Financial Crimes Commission (EFCC) in respect of the Oil Prospecting License OPL 245 otherwise known as Malabu oil block to the Federal Government was Friday reversed by an Abuja Federal High Court.
It would be recalled that, the court gave the forfeiture order on January 26, based on a motion ex-parte filed by EFCC, retrieving the ownership of the oil block from two multinational oil companies. Shell and Eni.
Following the forfeitiore order, Shell and Eni approached the court with an application challenging the ruling.
They argued that, the rights of parties to fair hearing was not properly followed before the ruling and prayed for a reversal and to enable the parties address the issue legally.
Delivering ruling Friday in two seperate applications of Shell Nigeria Exploration and Production Company Limited and Agip Exploration Limited, Justice John Tsoho, held that, the order of forfeiture ought not to have been granted EFCC boss in the first instance.
Tsoho said, the reversal was predicated on the fact that EFCC did not meet the required conditions to enjoy such forfeiture order.
The court upheld that, having vacated the interim forfeiture order, it issued to the Federal Government, there is no longer a suit on the matter pending before him.
As it stands, Nigeria has lost the Malabu oil block which is believed to be the richest oil block in Afrrica to the two oil multinationals, Shell and Agip.
Lagos Filling Stations To Operate From 9am To 4pm
The Lagos State Government has directed filling stations operating along major roads in the state to curtail their services to reduce traffic gridlock along the roads.
The move comes as fuel scarcity has persisted in the state, leading to the forming of long queues of vehicles along the road by the filling stations, despite claims of improved distribution of petroleum products by the Nigerian National Petroleum Corporation (NNPC).
The statement was disclosed by the Lagos State Commissioner for Transport, Frederic Oladeinde, who said the move serves to check the indiscriminate activities of motorists forming long queues in search of petrol.
The commissioner stated that major and independent petroleum marketers with filling stations sited along major highways and areas prone to traffic will not be allowed to operate beyond 4 pm and will not open earlier than 9 am until the situation improves.
According to Oladeinde, the Lagos State Traffic Management Authority (LASTMA), Vehicle Inspection Service (VIS), Transport Operations Compliance Unit (TOKU), and other law enforcement operatives have been asked to ensure the free flow of traffic in the state.
Reports say Oladeinde urged major and independent marketers operating across Lagos to comply with the directive to avoid sanctions.
No Approval For Increase In Petrol Price – FG
President Muhammadu Buhari has not approved any increase in the price of petrol, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said last weekend.
He stated in a statement in Abuja that the current increase in the pump price of petrol, which started on Thursday, was the handiwork of mischief makers and those planning to discredit the achievements of the president.
The pump price of petrol rose on Thursday from N179 in major marketers’ filling stations to N199 per litre in Abuja and other northern states, while Lagos and neighbouring states raised their prices to N185 per litre.
“President Muhammadu Buhari has not approved any increase in the price of PMS or any other petroleum product for that matter.
“There is no reason for President Muhammadu Buhari to renege on his earlier promise not to approve any increase in the price of PMS at this time.
“Mr President is sensitive to the plight of the ordinary Nigerian and has said repeatedly that he understands the challenges of the ordinary Nigerian and would not want to cause untold hardship for the electorate.
“Government will not approve any increase of PMS secretly without due consultations with the relevant stakeholders.
“The President has not directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) or any agency for that matter to increase the price of fuel. This is not the time for any price increase in the pump price of PMS,” Sylva stated.
The minister noted; “I appeal to Nigerians to remain calm and law abiding as the government is working hard to bring normalcy to fuel supply and distribution in the country.”
Meanwhile, the Major Oil Marketers Association of Nigeria (MOMAN) has said the present petrol queues being noticed across the country were caused by exceptional high demand and bottlenecks in the fuel distribution chain.
The association also said another major cause is the shortage and high (US dollar) cost of daughter vessels for ferrying products from mother vessels to depots along the coast.
It also blamed the situation on inadequate number of trucks to meet the demand to deliver product from depots to filling stations nationwide.
These high logistics and exchange rate costs continue to put pressure on prices at the pump, it said in a statement.
While sympathising with customers and Nigerians over the challenges, it said, over the past three months, staff & management of MOMAN companies have worked diligently at depots and filling stations to relieve the stress faced by customers through the Christmas and New year period.
Upstream Spending Will Rise To $485bn In 2023
Over the past three years, the majority of U.S. energy companies have avoided spending big to expand production in the aftermath of the 2020 oil crisis, prioritising returning more cash to shareholders in the form of dividends and share buybacks.
Most oil and gas companies have only announced small increases in their capital spending for the current year, and also plan to grow production modestly.
But this does mean that these companies won’t try to capitalise on oil prices that remain at multi-year highs.
In its 2023 outlook, Energy Intelligence notes that global upstream capex will hit $485B in the current year, good for 12% Y/Y increase and a near 30% recovery from the 2020 trough.
The energy expert says that spending is unlikely to hit the $700 billion-plus level seen during the 2013-2014 peak in this decade, with most companies preferring to focus on the most advantaged “barrels’’ i.e. lower cost, lower carbon projects with faster timelines. NOCs, large independents and western majors are returning to advantaged offshore plays including the Guyana Basin, Brazil, Gulf of Mexico, North Sea and West Africa–the regions also expected to drive the lion’s share of non-OPEC growth.
A number of oil and gas majors have announced bigger-than-average capex hikes for 2023 and beyond. Last month, Chevron Corp. (NYSE: CVX) announced that FY 2023 capital spending budget will clock in at $17B, more than 25% from expected spending in 2022 and at the top end of its $15B-$17B medium-term range.
The company said that upstream capex includes more than $4B for Permian Basin development; ~$2B for other shale and tight assets and ~$2B to go into projects that lower carbon emissions or increase renewable fuels production capacity, more than double the 2022 budget.
Although Chevron’s spending for 2023 will be considerably higher than capital spending in the 2020-21 pandemic years, it’s still much lower than the $30B annual average of the 2012-19 period.
“Our capex budgets remain in line with prior guidance despite inflation,” Chairman and CEO Mike Wirth said.
Chevron’s peer ExxonMobil Corp. (NYSE: XOM) has not announced a drastic increase in spending, but has said that its capital spending for 2023 will be closer to the top end of its annual target of $20B-$25B, a level it expects to maintain through 2027.
Exxon says that more than 70% of its capital investments will be deployed in the U.S. Permian Basin, Guyana, Brazil and LNG projects across the globe.
These investments will help increase the company’s upstream production by 500K boe/day to 4.2M boe/day by 2027. Exxon also unveiled plans to boost spending on lower emission projects by 15% through 2027 to ~$17B through 2027.
Exxon also plans to expand its stock buyback plan to $50B through 2024, including $15B in 2022 So, where will all that money come from? Exxon expects to “double earnings and cash flow potential” by 2027 compared to 2019, and also expects to deliver ~$9B in structural cost savings by year-end 2023 from 2019 levels.
Meanwhile, Canada’s third-largest crude oil and natural gas producer Cenovus Energy (NYSE: CVE) has announced that it expects to spend C$4B-C$4.5B in FY 2023, higher than estimates of C$3.3B-C$3.7B for 2022, including ~C$2.8B of sustaining capital for maintaining base production and support operations.
Cenovus says it expects to direct C$1.2B-C$1.7B towards optimisation and growth, including construction of the West White Rose project in Atlantic Canada.
Cenovus has also guided for production of 800K-840K boe/day in the current year, an increase of more than 3% Y/Y, including oil sands production of 582K-642K boe/day and conventional output of 125K-140K boe/day.
Meanwhile, the company expects total downstream crude throughput to clock in at 610K-660K bbl/day, up nearly 28% Y/Y.
Back in June, Saudi Aramco revealed plans to keep raising capital expenditure until the mid-2020s as part of its strategy to grow oil production capacity to 12.3 million barrels per day by 2025 and to 13 million b/d by 2027.
To support production growth, Aramco plans to allocate capex by up to $50 billion, which will then increase from 2023 until 2025.
Brazil’s oil and gas supermajor Petróleo Brasileiro S.A. or Petrobras (NYSE: PBR) has announced that it will increase 2023-2027 investments by about 15% to $78 billion over the company’s 2022-2026 projected spending. Of the $78 billion planned for capex, 83% or $64 billion is earmarked for E&P activities while 67% of the E&P capex budget will go to pre-salt activities.
The company also plans to boost spending to reduce carbon emissions to ~6% of the total compared with 4% in the previous plan, and will see its decarbonisation fund more than double the current $248M.
Meanwhile, Brazilian mining giant Vale S.A.(NYSE: VALE) has announced plans to increase capex to US$6bn in 2023 from US$5.5bn in 2022 while exploration expenses are expected to reach US$350mn in 2026 compared to $180 million for 2022.
Vale says it expects iron production to only increase slightly to 320 million tonnes in 2023 compared to 310 million tonnes in the current year, but expects production to exceed 360 million tonnes by 2030.
Meanwhile, copper production is expected to jump to 335K-370K tons in 2023 from – 260K tons this year while nickel production is expected to exceed 300K tonnes from ~180K tons in 2022.
By: Alex Kimani
Kimani Reports for Oilprice.com
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