Sweetcrude Weekly January 16, 2019

MKPOIKANA UDOMA

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ort Harcourt -- A nongovernmental organisation has petitioned the National Oil Spills Detection and Response Agency, NOSDRA, calling for proper remediation over an oil spill which occurred in Otuokpoti community in Bayelsa State in 2016.

Group petitions NOSDRA over SPDC oil spill The group, known as Oil and G a s Pr o d u c i n g A r e a s Enlightenment and Empowerment Initiative, OGPAEEI, in the petition o b t a i n e d b y SweetcrudeReports, said that while the spill had polluted the Ekoli River and spread the oil

discharge across communities along its bank, SPDC restricted its community engagement to O t u o k p o t i c o m m u n i t y, excluding other communities.

Recall that a massive oil leak from an oilfield operated by the company had on November 2, 2016, discharged an

unquantified volume of crude oil into Ekoli Creek around Agbura and Otuokpoti communities in Ogbia and Yenagoa Local Government Areas of Bayelsa State.

Community residents had claimed that crude oil deposits from the spillage, measuring

about five centimetres thick on the surface of the water, destroyed farmlands and aquatic lives in the communities.

SPDC had on November 7, 2016 through its then

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A Review Of The Nigerian Energy Industry facebook.com/sweetcrudereports

WEEKLY

UU PP D D A A TT EE SS WEEKLY BASKET PRICE JAN-11 JAN-04 DEC-28 DEC-21 DEC-14 DEC-07 NOV-30 NOV-23 NOV-16 NOV-09 NOV-02 OCT-26 OCT-19

Daily | Weekly | Monthly | Yearly

58.04 53.40 51.34 55.20 59.05 59.95 58.80 62.83 66.52 70.51 74.16 76.37 78.85

January 16, 2019

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Nigeria spends N1.02tr on fuel import in three months

60.00U$

82 78 74 70 66 62 58 54 50

OCT18

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DEC18

JAN19

No need for emergency OPEC meeting, says Saudi Arabia OPEOLUWANI AKINTAYO

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agos -- Saudi Arabia has said there is no need for an extraordinary meeting of the Organization of the Pe t r o l e u m E x p o r t i n g Countries, OPEC, before April.

An emergency meeting would be required if OPEC and its allies, known as OPEC+, needed to make extra cuts apart from the 1.2 million barrels per day, mb/d, agreed in December and which took effect from January 1, this year.

Saudi Energy Minister, Khalid al-Falih, who said there was no need for an emergency meeting, maintained that the oil market is “on the right track” and prices will bounce back, adding that if need be, oil

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Oil vessel at sea

IKE AMOS

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buja -- Nigeria spent N1.016 trillion importing petroleum products in the third quarter of 2018, according to data released by the National Bureau of Statistics, NBS. The NBS, in its third quarter 2018 Foreign Trade Statistics, declared that Nigeria’s petroleum products import appreciated significantly by 41.03 percent from N720.4 billion recorded in the second quarter of 2018.

Fo r J u l y, A u g u s t a n d September 2018, the NBS report stated that N343.25 billion, N378 billion and N295.03 billion-worth of fuel was imported respectively, compared to N241.61 billion, N225.15 billion and N276.06 billion recorded in July, August and September of 2017 respectively.

Giving a breakdown of

some of the imported petroleum products, the NBS report explained that N854.59 billion was spent on the importation of Premium Motor Spirit, PMS, also known as petrol, while N80.13 billionworth of gas oil was imported during the period.

In addition, lubricating oil import stood at N32.46 billion while kerosene/jet fuel import stood at N17.77 billion in the

period under review.

The report further disclosed that fuel import in the third quarter of 2018 accounted for 24.4 percent of Nigeria’s total imports in the period under review.

Specifically, the report stated that total imports into Nigeria in the third quarter of 2018 stood at N4.172 billion, rising by 73.8 percent from N2.4 trillion in the second quarter of 2018.

UN reports 82 crime incidents in Gulf of Guinea

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agos -- The United Nations says there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea between January and November last year.

It also reported that oil-

In addition to the N1.016 trillion spent on fuel import in the quarter under review, the report stated that N1.94 trillion was spent on the importation of machinery and transport equipment, representing 46.5 percent of total import, while chemical and related products accounted for N388.3 billion or 9.3 percent of the total imports during the quarter under review.

The report further attributed the sharp rise in total import in the third quarter to the importation of an oil rig.

Particularly, the report said the floating or submersible drilling or production platforms worth N1.159 trillion was imported from South Korea in August 2018.

“In the same way, there was a rise of 67.7 percent when compared with the import value of the corresponding quarter in 2017. The huge increase in import value during the quarter resulted in a decrease in the country's trade balance from N2.103 trillion in the second quarter to N681.3 billion in the third quarter representing a decrease of 67.6 percent. The year to date total trade amounted to N23.14 trillion,” the report noted.

November 23, there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea," a new ‘Report by the Secretary-General on the activities of the United Nations Office for West Africa and the Sahel (UNOWAS)’, released in New York, said.

related crimes led Nigeria to a loss of about $2.6 billion in revenue during the year.

“Oil-related crimes resulted in the loss of nearly 2.8 billion dollars in revenues last year in Nigeria, according to government figures. CONTINUES ON PAGE 02 “ B e t w e e n J a n u a r y 1 a n d CONTINUES ON PAGE 02

SWEETCRUDE WEEKLY, 16 JANUARY, 2019

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Group petitions NOSDRA over SPDC oil spill

Oil

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Oil, gas operators contravening regulatory guidelines — DPR IKE AMOS

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buja -- The Department o f Pe t r o l e u m Resources, DPR, has disclosed that oil and gas operators are increasingly contravening regulations and guidelines of the Nigerian petroleum industry, noting that their refusal to comply was bringing about increasing safety challenges in the downstream sector.

Speaking in Abuja, at the DPR annual general stakeholders' meeting, Mr. Mordecai Ladan, warned that the DPR would not sit and allow indiscipline in the industry.

Ladan, who was represented

by Mr. Idris Ali, DPR Zonal Controller, Maiduguri, noted that the DPR would utilise the powers vested on it by the constitution to ensure that all oil and gas operators conformed to national and international industry practices and standards.

He assured stakeholders that the oil and i n d u s t r y guidelines and regulations were investorfriendly, designed to help operators operate safely, efficiently and e f f e c t i v e l y, w h i l e protecting investments.

Mr. Mordecai Ladan "Consequentl y, w e h a v e made laudable achievements Speaking in the same vein, in the downstream gas Group Managing Director of the utilisation. The presence of Nigerian National Petroleum investor-friendly guidelines Corporation, NNPC, Dr. Maikanti and standards for the gas sector Baru, bemoaned the refusal of issued by DPR have seen the operators to comply with rapid growth of gas outlets in regulations in the petroleum the country. The effort is in Top industr y, stating that it is Gear to incorporate the gas hampering the growth of the applications into our industry. automated system," he added.

Gas

NNPC to halt export of propane, butane …Says move will lower LPG price

Cylinders of propane and butane

OPEOLUWANI AKINTAYO

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agos -- The Nigerian National Petroleum Corporation, NNPC, has said it is set to implement an effective commercial framework that would halt the export of propane and butane which are major

Power

components in the production of Liquefied Petroleum Gas, LPG, also known as cooking gas.

The corporation is aiming through this to bring down the LPG price in the country.

It explained in a press release by its Group G e n e r a l M a n a g e r, Group Public Affairs Division, Ndu Ughamadu, that the move to stop the export of propane and butane which is anchored by the Crude Oil Marketing Division of the corporation would enable the corporation boost supply of LPG to the domestic market thereby leading to a natural downward slide in the price of the product in the country.

T h e N N P C s p o ke s m a n quoted the Group General

Manager, Crude Oil Marketing Division, COMD, Mallam Mele Kyari, as saying: “Currently, some of our butane and propane entitlements are exported largely due to lack of vessels to make sure that these things come into the domestic markets and the absence of a commercial framework.

"What we are going to do is to make sure we put the right commercial framework in place so that those exports are converted into domestic consumption”.

Kyari, who disclosed this at a strategy session, said the division was working in concert with stakeholders to create the enabling environment for incountry production of LPG and cessation of export of the country’s equity butane and propane entitlements due to absence of in-country vessels for transport and other considerations.

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spokesman, Mr. Precious Okolobo, confirmed the spill and said the source of the oil leak was being investigated. " T h e S h e l l Pe t r o l e u m Development Company of Nigeria Ltd (SPDC) is investigating reports of a leak around Otuokpiti community waterfront situated downstream the Ekoli River, where a section of SPDC’s Nun River-Kolo Creek Pipeline is buried.

"Preliminary site visits did not indicate any spill. SPDC has, however, shut the pipeline as a precautionary measure pending further investigation," SPDC had said.

But, OGPAEEI, in its petition addressed to the DirectorGeneral of NOSDRA, Dr. Peter Idabor dated December 24, 2018, maintained that SPDC’s response to the incident fell short of industry standards as spelt out in the NOSDRA Act, and urged NOSDRA to compel the oil firm to comply with industry standards in the spill.

The group further urged NOSDRA to compel SPDC to, as a matter of urgency, deploy spill response and containment teams for cleanup and remediation of polluted sites, for short and long term, to bring lasting relief to the impacted communities "This spill affected more than 500 communities in

Ogbia, Nembe, Brass and Southern Ijaw Local Government Areas of Bayelsa.

This is moreso because these areas are in ebbs and tides within the floods plain.

"We have not seen and felt a proper procedure of contentment and mitigation of this spill by following international best practices.

We have also not seen a report of this spill to appropriate agencies of the Federal Government. " T h e r e w a s n o comprehensive physical ecological and social mapping of the affected areas and ecosystems, we are yet to see any report of NOSDRA and its participation in containment and mitigation of short and long time impact," the group stated in the petition.

"Our call therefore is for NOSDRA to compel SPDC to involve the regulatory agency namely NOSDRA and other agencies involved in spill monitoring and management in the site visit to impacted areas.

"We call for immediate comprehensive and holistic mapping of the impacted area in Yenagoa, Ogbia, Nembe, Brass and Southern LGAs, a Joint Investigation Visit could still be done to meet international best practices," the group said in the petition," it added.

UN reports 82 crime incidents in Gulf of Guinea CONTINUED FROM PAGE 01

The report noted that compared to the situation reflected in the previous report, there was an increase in drug trafficking throughout West Africa and the Sahel.

“In Benin, the Gambia and Nigeria, more than 50 kilogrammes of cocaine were seized between July and October by joint airport interdiction task forces.

“During the same period, joint airport interdiction task forces seized more than six k i l o g r a m m e s o f methamphetamines, eight kilogramme of heroin

(double the amount in the first half of 2018) and 2.6 tonnes of cannabis.

“Drug production across the region was also reportedly on the rise, with more than 100 kilogrammes of ephedrine and phenacetin seized by competent authorities,’’ the report said.

During the reporting period, it said that conflicts between farmers and herders resulted in loss of lives, destruction of livelihoods and property, population displacements and human rights violations and abuses.

Kaduna Electric tops 2018 power sector safety ranking

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agos -- Kaduna Electricity Distribution Plc has emerged first among the 11 power distribution companies and the Transmission Company of Nigeria in safety for the year, 2018, according to the monthly safety report by the National Electricity Management Service

Agency, NEMSA. The report indicated that based on all the indices for measuring safety, including death and Injuries, the company was not found wanting.

Kaduna Electric came tops eight times in the monthly ranking for year, emerging tops in

January, February, June, July, August, September, October and November 2018.

Though the report for December is expected later this month, Kaduna Electric is already poised to come first, a statement by the company said.

The statement by the

company’s Head, Corporate Communication, Abdulazeez Abdullahi, said that Kaduna Electric beating ten other Discos to win the coveted position was a testimony to the fact that the company took safety seriously.

Workers tackle fault on a power line

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Power

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No need for emergency OPEC meeting, says Saudi Arabia

Electrical engineers want review of Nigeria's power policy

Electrical engineer MKPOIKANA UDOMA

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ort Harcourt -- The Institute of Electrical Electronic Engineers of Nigeria, IEEEN, has called on the Federal Government to urgently make provision for a review of the country's power policy for optimal service delivery.

President, Port Harcourt Chapter of IEEEN, Engr. Isaac Adekanya, said the present structure of the power sector did not reflect the country's local content development p o l i c y, a s t h e i n p u t o f indigenous experts in the sector was missing.

Adekanya explained that to achieve the objectives of local

content development in the power sector, IEEEN members should be given opportunities to make inputs in policy f o r m u l a t i o n a n d implementation.

He also attributed the lapses in the power sector to the manner of allocation of operational licences to operators - the power distribution companies or Discos, generating companies or Gencos and the transmission companies or Transiscos saying the allocations were not based on the consideration of effective service delivery.

According to him, "We, in the Institute of Electrical Electronic Engineering of Nigeria, are ready to make our

contributions for the development of the Nigerian power sector.

"We need to be given the right opportunity to make meaningful impact in the sector, and this calls for a stronger synergy between the institute and the government."

The institute also advocated that the Federal Government should make provision for increased electricity generation in order to stimulate sustainable economic growth in the country.

Adekanya stated that the major incentive needed for economic growth and industrialisation in Nigeria was effective power generation and transmission across the country.

He maintained that it was unsatisfactor y that power generated in the country was concentrated at Oshogbo for transmission across the

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producers would cut more.

“If we look beyond the noise of weekly data and speculators’ herd-like behaviour, I remain convinced that we’re on the right track, and that the oil market will quickly return to balance,” Falih said while addressing an oil conference in Abu Dhabi.

“If we find that more needs to be done, we will do so in unison with our OPEC and non-OPEC partners where collaboration is essential too,” he added.

In an effort to get rid of oil glut from the market and increase crashing oil prices, OPEC and its partners last December, agreed to cut a combined output of 1.2mb/d.

Parties to the cut, will freeze output to last October production - Nigeria’s production as at last October was 1.74mb/d, although the countr y targets between country, noting that such policy was not in the best interest of the nation’s economy, given the

2.3mb/d as stated in its N8.83 trillion 2019 national budget, and 2.2mb/d as recently stated by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.

A c c o r d i n g t o Fa l i h , secondary sources suggest OPEC production in December was already more than 600,000 barrels per day lower than in November.

Saudi Arabia has also signalled its readiness to reduce its market supplies in Februar y, lower than its expected cut quota in the Declaration of Cooperation, DoC. “We in Saudi Arabia went beyond our commitment, and have lowered both production and exports,” he said.

He, therefore, said no need for an extraordinary OPEC meeting before April, when the group is set to decide its output policy for the rest of 2019.

peculiar power needs of each state in the country.

Finance thgierF

Saudi Aramco to issue 10bn range bond

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agos -- Saudi Aramco will issue bonds which will be in the 10 billion range, Saudi Energy Minister, Khalid al-Falih, has disclosed.

According to the minister, who did not specify in which currency the bonds would be issued, the issuance will happen in the second quarter of this year.

The minister had, however, earlier stated that the bonds, Aramco’s first in the international debt markets, will

likely be denominated in U.S. dollars.

Another angle to the report indicated that Aramco could tap the bond market for about $10 billion to help fund the acquisition of petrochemicals giant Saudi Basic Industries Corp.

The kingdom will decide in the “next few weeks” about the size of the proposed bond, though the offering would not b e “ h u g e , ” A l - Fa l i h t o l d reporters in Abu Dhabi. “It will

be probably in about the 10 billion range.”

"I think $10 billion of issuance from Aramco will be just the start," said Zehan Mohamed Salleh, fixed-income portfolio manager at First Abu Dhabi Bank PJSC. "We definitely expect them to return later in 2019."

Aramco is in talks to buy 70 percent of Sabic from the Public Investment Fund, which could cost about $70 billion. Some had expected the potential

bond to rank among the largest issued by a company if Aramco planned to finance a large chunk of the Sabic deal with it, though Al-Falih last week played down chatter in the market that Aramco would fund the entire deal with the bond offering.

Saudi Energy Minister, Khalid al-Falih

Solid Minerals

Labour

Budget 2019: Cut down on frivolities, labour tells govt P

NUPENG appoints new acting General Secretary

ort Harcourt -- The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, says even if crude oil is sold below $50 per barrel, Nigeria can still conveniently fund its 2019 budget, if unnecessary expenses and frivolities are cut off from the budget.

PENGASSAN stated this in r e a c t i o n t o t h e Fe d e r a l Government's proposed N8.83 trillion budget for 2019, a bulk of which is expected to be funded by oil revenues.

The budget is predicated on $60

per barrel oil price and 2.3 million barrels per day crude production.

Speaking with our c o r r e s p o n d e n t , t h e Po r t Harcourt Zonal Chairman of PENGASSAN, Mr. Azubuike Azubuike, said that despite prices lower than the budget projection, the 2019 budget could still be well funded.

"The projection in the 2019 budget is $60 per barrel, but, today a barrel is less than $60.

We want a situation whereby the government can be able to cut down some of its expenses

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Francis-Johnson PENGASSAN-President that are not necessary.

"If we (government) can do this, even if crude oil sells at $50 per barrel, we can be able to fund the budget”.

agos -- The National Union of Petroleum and Natural Gas Workers, NUPENG, has named Mr. Afolabi Olufemi its acting General Secretary.

This was confirmed by Prince William Akporeha, NUPENG’s President, in a statement in Lagos.

Olufemi was until the new appointment, NUPENG’s Deputy General Secretary in charge of operations.

The statement said Olufemi took over from Mr. Adamu Song, on January 1, 2019, with Song having reached the mandatory retirement age.

“Olufemi is an astute trade unionist and has been in active service for over two decades in NUPENG at management level in areas of Tr a i n i n g / E d u c a t i o n , Alternative Dispute Resolution, and Negotiations.

“He is a thorough bred unionist and has his first degree in Philosophy at the University of Lagos in 1991 and Masters Degree in Industrial and Labour Relations at the University of Ibadan in 1997”.

SWEETCRUDE WEEKLY, 16 JANUARY, 2019

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Freight

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$2.7bn Ibom Seaport to solve congestion at Lagos ports MKPOIKANA UDOMA

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agos -- The $2.5 billion Ibom Deep Seaport, a public private partnership billed for take-off in April, will change the landscape of infrastructure in Nigeria, Ms Imeh Okon, the Senior Special Assistant to the President on infrastructure, has said.

Speaking at a stakeholders' retreat on public private partnership in Uyo, Okon said: “It will have solutions to traffic congestion in Lagos port

because those goods that normally go to Lagos will come here.’’

“I can assure you before April, the contract for Ibom Deep Seaport will be signed and the approved consortium will start immediately," she added, stating that the country had spent N2.7 trillion on infrastructure development in the last three years.

She said that N100 billion had been injected into rail projects.

“What we have done as a government is to go back to the 25-year master plan on the rail

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agos -- The Chairman a n d C h i e f Executive Officer of Dangote Group, Alhaji Aliko Dangote, and the Group Executive Vice Chairman of SIFAX Group, Dr. Ta i w o A f o l a b i , have hailed fresh initiatives by the Nigerian Maritime

Aliko Dangote

sector. All what you are seeing right now is in terms of rail infrastructure as a result of the Master plan that was on ground.”

She said that the essence of the retreat was to bring s t a ke h o l d e r s t o g e t h e r t o deliberate and develop on policies that would be suitable for the country.

She said that the Federal Government was committed to the development of infrastructure in the country, adding that infrastructural development would enhance

Section of the Ibom deep seaport growth.

The presidential aide, however, said that revenue generation was a major challenge since the country depended on oil for revenue and the price of oil was not stable in the international market.

“The challenge we have seen is revenue; because we are largely dependent on oil to generate revenue and the price of oil has affected government spending.

Dangote, Sifax boss commend NIMASA on new maritime initiatives VINCENT TORITSEJU Administration and Safety Agency, NIMASA, towards realisation of a robust maritime industry.

Speaking in Lagos, Dangote expressed delight in the achievements the maritime sector had attained in recent times and applauded the leading role NIMASA was playing in ensuring an

all-inclusive administration of the sector.

“We are proud of the modest achievements the maritime sector has attained in recent times. NIMASA has continued to take the lead by providing direction for operators in the industry. On our part, we will continue to support the Agency’s drive to reposition the Nigerian

Environmental degradation caused by oil pollution, worse than insurgency - Wike MKPOIKANA UDOMA

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ort Harcourt -- Rivers State Governor, Nyesom Wike, has said that environmental degradation in the Niger Delta region caused by oil exploration is worse than insurgency.

The governor also decried what he described as deliberate neglect of the region and its suffering of untold environmental hardship to keep the country afloat.

Speaking during a courtesy visit by the Minister of

“So, we are going to partner with the private sector to develop most of our priority infrastructure projects.”

Mr Chidi Izuwah, the Acting Director-General, Infrastructure Concession Regulator y Commission, ICRC, noted that infrastructure deficit was the major challenge to the nation’s development.

According to him, increase in infrastructure will boost prosperity, growth and peace in the country.

Environment, Mr. Suleiman Hassan Zarma, at the Gover nment House, Port Harcourt, Governor Wike urged the Federal Government to withdraw funds from the Excess Crude Account to address the environmental challenges in Ogoniland, in the same manner funds were withdrawn to tackle insurgency in the north eastern part of the country.

Wike, who assured the Federal Ministr y of Environment of the support of

the Rivers State Government to achieve the goals of remediation of the Ogoni environment, said: "While we support the fighting against the insurgency, nothing is worse than environmental pollution.

We suffer because we are allowing Nigeria to survive. We are suffering for Nigeria to survive. It is through our oil that Nigeria is surviving.

"We are dying because we are keeping the country alive.

Nobody wants to give us the attention required. These people who are suffering because of the nation's survival, why not give them priority to

maritime sector,” Dangote said.

Speaking in similar vein, Afolabi noted that NIMASA had done well in the enforcement of safety standards in the sector and provided a level playing field for stakeholders in the industry to overcome various challenges by creating a mechanism that listens and gives feedback.

Community

survive?"

"They (Federal Government) took $1 billion from the Excess Crude Accounts to fight the insurgency. I say they should take $500 million from the Excess Crude Accounts for the Ogoni cleanup exercise.

"If you had told me earlier that you were coming, I would have provided a helicopter for you to fly over Ogoni land.

You will weep at the level of environmental damage ", the governor further said.

Gov. Wike

Regretting that the Ogoni clean-up exercise has been politicised, he pointed out that the Ministry of Environment is handing over sites to contractors three years after Vice Pr e s i d e n t Ye m i Imeabe, particularly, described as Osinbajo flagged off oppressive and nonchalant the attitude of the exercise. He Port Harcourt Refining Company, PHRC, said the activities which, according to him, shunned all efforts were taking place as made by the group to seek audience with the e l e c t i o n s company over its skewed employment approached. policy.

Youths decry discriminatory employment by oil firms

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Ogoni youths protesting

ort Harcourt -- A group known as Ogoni Youth Development Initiative, OYDI, has decried what it described as discriminatory employment policies by oil firms operating in Ogoni, Rivers State, towards the youths of the area.

The group said despite the presence of several multinational companies in Ogoni, unemployment rate was high among the youth, leading to social vices in Ogoniland.

President of the group, Mr. Oscar Saviour Imeabe, in a statement, urged oil companies operating in Ogoni to review their employment policies to cover all communities in the four local government areas of Ogoni.

EDITOR Chuks ISIWU

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