Oil & Energy
Oil Market: Nigeria’s Crude Output Drops
The Organisation of Petroleum Exporting Countries (OPEC), has put Nigeria’s February, 2021, oil output at 1.4 million barrels per day, mb/d, excluding Condensate.
This, according to the March Oil Market Report, yesterday, showed a drop of 17.6 per cent when compared to the 1.7 mb/d produced in the corresponding period of 2020.
The cut in output is mainly driven by the quest of Nigeria to comply with the OPEC oil reduction directive, targeted at achieving stability in the global market.
Nevertheless, at the current price, Nigeria would not be under pressure to raise adequate funds for the execution of its 2021 budget, which was based on $40 per barrel, and 1.8 mb/d.
However, the report stated, “For 2021, world oil demand is expected at 5.9 mb/d, to stand at 96.3 mb/d. Oil requirements in the first half (1H21) are adjusted lower, mainly due to extended measures to control Covid-19 in many key parts of Europe. In addition, elevated unemployment rates in the US slowed the recovery process.
“In contrast, oil demand in the second half (2H21) is adjusted higher, reflecting expectations for a stronger economic recovery with the positive impact of vaccination rollouts.
“In regional terms, OECD oil demand is expected to increase by 2.6 mb/d in 2021 to stand at 44.6 mb/d, while non-OECD demand is seen rising by 3.3 mb/d to average 51.6 mb/d.”
Meanwhile, the price of Brent and Nigeria’s Bonny Light, which had risen to $70 per barrel, because of a recent drone attack on Saudi Arabia’s oil facility, has dropped to $69.31 and $66.03 per barrel respectively.
However, OPEC expects that the global oil demand would rise from 93.22million barrels per day, mb/d to 97.94 mb/d, thus recording an increase of 5.06 per cent between the first and fourth quarter of 2021, as many countries continue to tackle the Coronavirus pandemic.
It stated that Quarter on Quarter, QoQ, the global oil demand would stand at 93.22 mb/d in the first quarter (January – March) of 2021, showing an increase of 0.13 per cent compared to 93.10 mb/d recorded in the corresponding period of 2020.
It further showed that QoQ, it would rise to 95.92 mb/d in the second quarter (April-June) of 2021, indicating an increase of 14.4 per cent, compared to 83.82 mb/d recorded in the corresponding period of 2020.
Also, it showed that the demand would hit 97.02 mb/d in the third quarter (July-September) of 2021, showing an increase of 6.4 per cent, compared to 91.18 mb/d, recorded in the corresponding period of 2020.
The report also showed that the demand would further rise to 97.94 mb/d in the fourth quarter of 2021, indicating an increase of 4.3% compared to 93.89 mb/d recorded in the corresponding period of 2020.
The target or prediction is to rising from its crucial meeting recently, OPEC also stated, “The meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on April 12, 2020 to adjust downwards overall crude oil production and subsequent decisions.
“The ministers noted, with gratitude, the significant voluntary extra supply reduction made by Saudi Arabia, which took effect on February 1, for two months, which supported the stability of the market.
“The ministers also commended Saudi Arabia for the extension of the additional voluntary adjustments of one mb/d for the month of April, 2021, exemplifying its leadership, and demonstrating its flexible and pre-emptive approach.
“The ministers approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which will be allowed to increase production by 130 and 20 thousand barrels per day respectively, due to continued seasonal consumption patterns.
“The meeting reviewed the monthly report prepared by the Joint Technical Committee (JTC), including the crude oil production data for the month of February.
“It welcomed the positive performance of participating countries. Overall conformity with the original decision was 103 per cent, reinforcing the trend of aggregate high conformity by participating countries.
“The Meeting noted that since the April, 2020 meeting, OPEC and non-OPEC countries had withheld 2.3bn barrels of oil by end of January, 2021, accelerating the oil market rebalancing.
“The meeting extended special thanks to Nigeria for achieving full conformity in January, 2021, and compensating its entire overproduced volumes.
“The ministers thanked Minister of State for Petroleum Resources of Nigeria, Timipre Sylva, for his shuttle diplomacy as Special Envoy of the JMMC to Congo, Equatorial Guinea, Gabon, and South Sudan to discuss matters pertaining to conformity levels with the voluntary production adjustments and compensation of over-produced volumes.
“In this regards the ministers agreed to the request by several countries, which have not yet completed their compensation, for an extension of the compensation period until the end of July, 2021.
“It urged all participants to achieve full conformity and make up for previous compensation shortfalls, to reach the objective of market rebalancing, and avoid undue delay in the process.
“The meeting observed that in December, stocks in OECD countries had fallen for the fifth consecutive month.
“The meeting recognized the recent improvement in the market sentiment by the acceptance and the rollout of vaccine programs and additional stimulus packages in key economies, but cautioned all participating countries to remain vigilant and flexible given the uncertain market conditions, and to remain on the course which had been voluntarily decided and which had hitherto reaped rewards.”
Oil & Energy
‘NNPC Spent N15b To Reconstruct Lagos-Badagry Expressway’
The Nigerian National Petroleum Company Limited (NNPC Ltd.) has disbursed N15 billion for the reconstruction of the Lagos Badagry Expressway under the Federal Government Road Infrastructure Tax Credit (RITC) Scheme.
The N15 billion represents a 100 per cent payment of the funding of the Lagos-Badagry Road rehabilitation under the tax credit funding of the NNPC Ltd.
Group Chief Executive, NNPC, Mr Mele Kyari, made this known when he led NNPC’s management team with some top government officials to inspect the ongoing rehabilitation and expansion of Lagos-Badagry Expressway (Agbara Junction-Nigeria/Benin Border).
The road under rehabilitation is being funded by the NNPC Ltd. under the Federal Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.
The execution of the scheme is being carried out in collaboration with the Federal Ministry of Works and Housing as the supervisor and Federal Inland Revenue Service (FIRS) for NNPC’s tax obligations deductions.
This is in response to address the plight faced by petroleum products marketers in transportation which affects nationwide distribution.
Kyari said the fund disbursed was part of the N621.24 billion earmarked for the reconstruction of 21 roads nationwide under the scheme.
He expressed satisfaction over the stage of the road development.
“We are covering 1,804.6mkm across the country and taking another set of over a trillion naira investment on infrastructure in Nigeria, believing that with the tax credit system which Mr President has put in place, very soon there will be massive change.
“NNPC as the enabler will consider from its cash flow and fund whatever FIRS and Ministry of works approve for the company”, he said.
The Minister of Works and Housing, Mr Babatunde Fashola, represented by the Director, Highways, Roads and Rehabilitation of the Ministry, Mr Folorunsho Esan, said the intervention of the NNPC sped up the reconstruction of the expressway.
Esan said the project was 40 per cent completed.
“In the next 12 months we should be able to deliver this project because the drainages are in place, just for earth works and pavement works, it cannot take us more than 12 months,” he said.
Speaking on the gridlock being caused by the Lagos-Ibadan Expressway project, he said the contractor would clear all impediments and move out of site by December 15 to make the highway free for Yuletide.
Oil & Energy
Oil Marketers Urge Buhari To Crash Diesel Price
Petroleum marketers under the platform of Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) rose from their 2nd National Executive Council (NEC) meeting last week, within a plea to President Muhammadu Buhari to direct the Central Bank of Nigeria (CBN) to make dollars available at official rate to oil marketers.
This, they said, will enable them import diesel, end petrol scarcity, and ultimately save the Nigerian economy from sinking, saying that dollar support should be available till Dangote Refinery comes on stream later in the year.
The association, among others, urged the National Assembly to immediately enact a Bill for the establishment of Energy Bank for easy transaction in petroleum products in the sector.
National President of the Association, Mr Benneth Korie, who briefed the media after the NEC meeting in Abuja, noted that the bulk of the operational challenge peppering marketers and depot owners spring from expensive diesel which hovers around N850/litre.
While thanking President Muhammadu Buhari for approving a higher bridging cost payment to transporters, Korie said the operators’ challenges were far from over as oil marketers and depot owners spend about N20 million weekly on diesel to power their operations, thus eroding their profits.
The association urges the National Assembly to review the policy of taxation as it affects petroleum products supply and distribution chain.
Oil & Energy
Senate To Honour Brave Petrol Tanker Driver
The Senate has resolved to honour Ejiro Otarigho, the brave tanker driver who drove a burning tanker from danger zone to avert a tragic fire incident in Agbarho, Delta State.
The Senate has also recommended Ejiro to President Muhammadu Buhari for National Honours.
This followed a motion moved by the Deputy President of the Senate, Senator Ovie Omo-Agege, and co-sponsored by Senator James Manager and Senator Peter Nwaoboshi, at plenary.
It would be recalled that in a rare act of bravery, Ejiro had last week driven a burning tanker from danger zone to avert what could have been a tragic fire incident in Agbarho, Delta State.
The incident happened last Friday when Ejiro drove the burning truck for 25 minutes from a densely populated area to Agbarho River where the tanker was completely razed in the inferno. The act was captured by onlookers and had gone viral.
Rising under Order 45 and 52 of the Senate Standing Order 2021 (as amended), Senator Omo-Agege stressed that but for Ejiro’s courage, a major fire disaster which would have claimed several lives and property could have happened in his senatorial district.
The Delta Central lawmaker noted that Ejiro’s “extraordinary display of courage, reflex application of special driving skills, and huge risk to his own life, prevented a huge national tragedy and catastrophe by driving a burning tanker loaded with inflammable petroleum products from residential areas to safety so that thousands of our people may not die in an inferno that would also have consumed so much property in Agbarho, Delta State on Friday, June 10, 2022”.
The driver’s audacious act of heroism, he stressed, has saved the nation from national tragedy and mourning.
Accordingly, the Senate resolved to “invite Mr. Ejiro Otarigho to the Chamber of the Senate for public commendation by the President of the Senate, Senator Ibrahim Lawan.
“Recommend Mr. Ejiro Otarigho to His Excellency, President Muhammadu Buhari, GCFR, President and Commander-in-Chief of the Armed Forces of Nigeria, for a befitting National Honour as Mr. President may deem fit for his extraordinary act of bravery, courage and skill that prevented the loss of human lives and property on a massive scale”.
President of the Senate, Senator Ahmad Lawan, who presided over plenary, hailed the driver for risking his life to drive the burning truck out of residential area to save lives.
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