Wednesday, April 14African Business News
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Oil & Gas

Refinery: A cautioning tale for ambitious revival

Refinery: A cautioning tale for ambitious revival

Oil & Gas
If Nigeria’s refineries were a private project, a fresh profitability analysis would certainly be required before an additional naira is released for the rehabilitation. That will require a detailed analysis of the expected cash flow and funding options. But the analysis would not stop at that. The refineries have a rich history of contentious capital expenditures that would interest any individual who wishes to make a sound final investment decision (FID). Such a decision cannot be made without an extensive profile of their previous investment outlays and the entrenched culture of net losses, which have run into billions of naira. According to available records, about $25 billion has been spent on the turn-around maintenance (TAM) of the refineries so far. Successive administra...
FG to expand national grid size, leverage hubs for gas pricing

FG to expand national grid size, leverage hubs for gas pricing

Oil & Gas
• Over 30km of welding completed on AKK project, says NNPC The Federal Government, through the Nigerian National Petroleum Corporation (NNPC), has announced plans to increase the size of the national grid by leveraging the country’s 203.16tcf gas potential in order to resolve lingering power sector issues nationwide.  Similarly, the oil company hopes to address pricing issues in the gas value-chain to increase adoption and utilisation in the industrial sector.   Gas pricing and dollarisation have remained a challenge among gas providers and industrial users.   Besides, the NNPC noted that the AKK project is well on course, stressing that over 30 kilometers of welding have been achieved. “We do not see anything that will stop the project. We are hoping to cross the River ...
Nigeria engages other countries as OPEC moves to ease production cut

Nigeria engages other countries as OPEC moves to ease production cut

Oil & Gas
As Nigeria engages key African countries ahead of the Organisation of Oil Exporting Countries and allies ((OPEC+) meeting due next week, indications emerged yesterday that the cartel may consider a reduction of the over seven million barrels per day suppressed crude to stabilise the price of crude oil.   Minister of Petroleum Resources, Timipre Sylva has been on OPEC diplomatic mission Equatorial Guinea, Gabon, Congo Brazeville and South Sudan on consultations over OPEC production cut. The consultation was said to be mandated by the Joint Ministerial Monitoring Committee (JMMC) of OPEC over the production cuts.While OPEC and its allies are meeting on March 4, 2021, the possibility of increasing crude oil production levels is in focus after crude oil price rebalances to a peak of $67 per b...
ExxonMobil, Chevron CEOs discussed potential merger in 2020: report

ExxonMobil, Chevron CEOs discussed potential merger in 2020: report

Oil & Gas
ExxonMobil and Chevron executives discussed the possibility of a merger last year as the two oil giants were battered by the pandemic, The Wall Street Journal reported Sunday. Chevron CEO Mike Wirth and his Exxon counterpart Darren Woods discussed merging as demand for oil and gas plummeted due to restrictions to stem the spread of the coronavirus, the paper said, citing sources close to the issue. The sources added that the “preliminary” discussions are no longer taking place but could resume in the future. The combined market value of the two companies would exceed $350 billion, according to the Journal, with ExxonMobil worth $190 million. “Together, they would likely form the world’s second-largest oil company by market capitalization and production, producing about 7 milli...
Oil prices rally as IEA sees lower production this year

Oil prices rally as IEA sees lower production this year

Oil & Gas
The International Energy Agency (IEA) has adjusted the crude oil demand recovery outlook for this year by 300,000 barrels per day (bpd) to 5.5 million bpd in its latest Oil Market Report, yesterday. The agency said it expected demand to average 96.6 million bpd in 2021, after crashing by an all-time high of 8.8 million bpd in 2020, under the weight of the COVID-19 pandemic. On the supply side, the IEA projected a recovery of over one million barrels per day, most of it to come from OPEC members after last year’s supply fell by 6.6 million bpd. It also sounded a positive note, leaving space for further improvement in supply during the second half of the year, with the rate of improvement reaching 1.2 million bpd. The report noted, however, that “OPEC+ has taken a more flexib...
Nigeria’s cooking gas target wobbles as consumption hovers at 1mmt

Nigeria’s cooking gas target wobbles as consumption hovers at 1mmt

Oil & Gas
Although Nigeria has set a target to increase domestic Liquefied Petroleum Gas (LPG) consumption of five million metric tonnes (mmt) by 2021, only one million tonnes of the product was consumed in the country last year. The Federal Government had earlier in the year put the nation’s total gas reserves at 203.16 trillion cubic feet (TCF), a marginal increase of 1.16tcf or 0.57 per cent from the 202tcf recorded in 2019. Despite the huge resources, domestic consumption remain dismal. In the absence of gas, most Nigerians usually resort to firewood, a development that has continued to fuel deforestation and threaten the country’s aspiration of transiting to cleaner fuel. The Petroleum Products Pricing Regulatory Agency (PPPRA) said Tuesday in Abuja that Nigeria consumed about one ...
Nigeria overtakes US as India’s fourth biggest oil supplier

Nigeria overtakes US as India’s fourth biggest oil supplier

Oil & Gas
Nigeria emerged as the fourth biggest supplier of crude oil to India in December, pushing the United States down to the sixth position just after Brazil. Reuters reported on Wednesday that India’s crude oil imports in December soared to the highest levels in nearly three years to more than five million barrels per day as its refiners cranked up output to meet a rebound in fuel demand, data from trade sources showed. India’s year-end rush for crude supplies coincided with stronger demand from north Asian buyers during winter, boosting prices and an accelerating de-stocking of floating storage globally. December oil imports by India, the world’s third biggest crude importer and consumer, were about 29 per cent more than the previous month and about 11.6 per cent higher than a year e...
Heirs Holdings Significantly Expands Oil and Gas Portfolio

Heirs Holdings Significantly Expands Oil and Gas Portfolio

Oil & Gas
Heirs Holdings (“HH”), the leading African strategic investor, in partnership with affiliated company Transnational Corporation of Nigeria Plc (“Transcorp”), Nigeria’s largest publicly listed conglomerate, announced today the unconditional acquisition of a 45% participating interest in Nigerian oil licence OML 17 and related assets, through TNOG Oil and Gas Limited (a related company of Heirs Holdings and Transcorp), from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI. In addition, TNOG Oil and Gas Limited will have sole operatorship of the asset. The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1.1 billion, provided by a consortium of global and regional ...
NNPC cautiously hopeful about oil demand recovery, deepens gas devt

NNPC cautiously hopeful about oil demand recovery, deepens gas devt

Oil & Gas
The Nigerian National Petroleum Corporation (NNPC) has expressed cautious optimism about oil demand growth, adding that it had begun the process to diversify its portfolio beyond oil assets to hedge future crisis and align with global energy transition. The oil firm noted that the country’s huge unharnessed gas resources as well as condensate could provide additional revenue that will address shortfall in the 2021 budget. The Group Managing Director, NNPC, Mele Kyari, made this known on Wednesday while speaking at a virtual event, the Gulf Intelligence “Global” UAE Energy Forum 2021. Despite optimism about oil demand, Kyari said he does not see oil demand recovering to pre-Covid19 levels before the end of 2022. Even though oil prices are now at 11-month high, coronavirus-in...
OPEC+ meeting to decide oil production levels after a dismal 2020

OPEC+ meeting to decide oil production levels after a dismal 2020

Oil & Gas
Members of the OPEC group of oil producers and their partners will meet via videoconference on Monday to decide on production levels for February, hoping to turn the corner on a difficult year. The OPEC+ ministerial meeting comes after oil consumption tanked in 2020 due to the COVID-19 pandemic and a price war between Saudi Arabia and Russia. Despite a pickup in prices towards the end of last year, the market levels for black gold remain uncertain. After their last summit, from November 30-December 3, the OPEC+ members agreed to increase production by half a million barrels per day in January. The 13 members of the OPEC cartel, led by Saudi Arabia, and their six allies led by Russia, also agreed to meet at the beginning of each month to decide on any adjustments to producti...