OIL AND GAS
More Nigerian crude heads to Asia as gas exports drops
Daniel Adugbo
The volume of crude from West Africa destined to Asia has increased to 1.77million barrels per day (b/d) in July compared with a total of 1.69m b/d last month, the lowest since October 2015, according traders and analysis of loading programmes obtained from Bloomberg.
Angola and Nigeria would account for more than 90 percent of the 1.77m b/d July increase, the survey showed.
Analysts say sustained appetite for West African crude has been helped by healthy refinery margins in the Far East.
A breakdown of the Bloomberg data showed that 58 cargoes of crude would be shipped to Asia in July from Angola, Nigeria, Equatorial Guinea, DR Congo, Republic of Congo, Chad, Ghana, Cameroon and Gabon.
402, 000 b/d of Nigerian crude was destined for Asia, the most volume since April.
In all, 52 consignments or 1.57m b/d were due for export in July to destinations worldwide.
Meanwhile, Liquefied Natural Gas (LNG) shipments from Nigeria to Japan dropped to 73,159 metric tons (MT) in May, the lowest since April 2011, data sourced from the Trade Statistics of Japan’s ministry of finance showed.
The lowest LNG shipment from Nigeria to Japan was 63,033 MT in February 2011.
Exports ever since have been well over 200,000 MT until May this year when it fell.
Nigeria is a regional gas/LNG powerhouse and export of LNG has been through the Nigeria Liquefied Natural Gas Ltd (NLNG).
NLNG cargoes have been delivered to the Far East, Middle East, South America and the UK with most volumes delivered to receiving facilities in Japan, South Korea, Taiwan, China and India as on-the-spot and short-term cargoes.
Oando concludes N70.5 bn downstream recapitalisation
From Mohammed Shosanya,Lagos
Oando PLC has completed the N70.5 billion recapitalisation of its downstream business with HV Investments II B.V., a joint venture owned by a fund advised by Helios Investment Partners, a premier Africa-focused private investment firm, and Vitol Group.
The deal was first announced on June 30, 2015, and would see an immediate injection of an estimated N70.5bn into Oando’s downstream operations and the larger Oando group.
Commenting on the successful transaction, Oando PLC Group Chief Executive, Adewale Tinubu, said that despite global economic headwinds, Oando took the proactive approach to establish a strategic partnership which would leverage the company’s sector dominance, considerable local knowledge and expertise, together with HVI’s vast international, financial, and technical capabilities.
He said: “This partnership will reinvigorate Nigeria’s downstream sector and create one of Africa’s largest downstream operations. We take great pride in our origins as a predominantly downstream company, and we are extremely confident in the success and potential returns this alliance will deliver.”
Under the new business structure, all Oando retail stations would retain the Oando brand.
However, Oando Downstream would be renamed OVH Energy (“OVH”) to reflect its new ownership structure and the commitment of its new shareholders.
OVH Energy would hold interests in Oando Marketing Limited, Oando Supply and Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited.
Oando PLC would retain a 49 percent shareholding in the newly formed corporate vehicle, with the HVI consortium also owning 49 percent.
A residual two percent would be owned by a local entity.
The company, recently, restructured a N94bn Medium Term Loan (MTL) facility for an additional five years while reducing its interest rate burden.
Other strategic deleveraging initiatives undertaken by the company to enhance its operations and financial positioning included the N2.8bn farm out of its EEZ 5 and 12 blocks, and the N3.7bn sale of its Akute Independent Power Plant.
‘Total invested $5bn in Nigeria in 5years’
From Mohammed Shosanya, Lagos
The Managing Director of Total Exploration and Production Nigeria Limited, Mr Nicolas Terraz, has said that his company has invested $5 billion in Nigeria in the last five years, despite the challenging business environment in the country caused by the fall in oil prices.
Terraz, who disclosed this when members of the House of Representatives Committee on Local Content paid a courtesy visit to his office in Lagos, weekend, also explained Total’s activities in Nigeria and the huge bouquet of projects contributing to the socio-economic development of the country.
He shed some light on the progress the company has made on its major projects such as the OML 58 Upgrade, Ofon Phase 2 and Egina.
Terraz said that his company would commence delivery of gas through its Northern Option Pipeline (NOPL) to Alaoji power plant this month to improve electricity supply to Nigerians.
The Deputy Managing Director, Deep Water District of Total, Mr Ahmadu-Kida Musa, expressed the company’s commitment to the development of local content and the country.
“As at the time we approved the Egina Project, all the other oil companies were running from Nigeria,” Musa said.
“When we took the bold step, others were asking what we were seeing that they were not seeing and, for Total, it was our absolute belief in Nigeria and Nigerians’ ability to manage the project. After three years, we are exceptionally proud of the project.”
Speaking, the chairman of the committee, Emmanuel Ekon, said that the journey to Total was a “friendly visit and not an oversight.”
He said that members of the committee were impressed with what Total has done in Nigeria in the last 50 years, adding: “We are impressed with your contributions to the development of our oil and gas industry, the training of Nigerians and the transfer of technology to Nigerians.”
‘Amendment of NLNG Act threatens Nigeria’s economy’
From Mohammed Shosanya, Lagos
Nigeria’s economy is threatened by the National Assembly’s insistence to amend the Nigeria Liquefied Natural Gas (NLNG) Act, the Petroleum Club said at the weekend.
The Petroleum Club described National Assembly’s intended action as an adventure in the wrong direction, warning that the proposed amendment would have far reaching negative consequences for the liquefied natural gas business and the entire petroleum industry in the country.
The club said that if the proposed amendment of NLNG Act sailed through, many oil companies and international lenders would no longer have confidence in Nigeria.
The Chairman of the Senate Committee on Niger Delta, Senator Peter Nwaoboshi, who sponsored the amendment of NLNG Act, lamented the gas company’s refusal to pay dues to the Niger Delta Development Commission (NDDC) for the past 16 years.
Nwaoboshi said: “It is not whether that they contributed certain percentage. The point is that they had refused to obey the law since year 2000.”
However, the Petroleum Club punctured the reasons adduced by the sponsors of the amendment of the NLNG Act as preposterous, saying that NLNG was never a gas producing company but only a processing firm and, therefore, should not be held responsible for the unnecessary gas flaring in the Niger Delta.
A memorandum to the National Assembly, signed by the chairman of the board, Otunba Funso Lawal and Dr G.S. Ihetu, the chairman of policy committee of the Petroleum Club, cited sections of the NLNG Act that it said were against the fiscal regime and called for their amendment.
Citi presents outlook for Energy markets to FG
By Daniel Adugbo
Leading global bank Citi has given a presentation to the Vice President Prof. Yemi Osinbajo and members of the Federal Government’s Economic Management Team (EMT) on the outlook for energy markets in the short, medium and long-term.
The presentation was designed to provide the government of Nigeria’s top economic managers with the forecast international market prices for oil, gas, power and renewables.
The Citi delegation was led by Citi Nigeria CEO, Mr Akin Dawodu.
Other members of the delegation were Citi’s Global Head of Energy Strategy, Mr. Seth Kleinman, Citi’s Chief Economist for Africa, Mr. David Cowan and Citi’s Regional Public Sector Head, Mrs Funmi Ogunlesi.
Following the presentation, Mr Dawodu said, “It has been a great privilege to provide this key data and information to the top-tiers of government through the EMT.”
Citi said Nigeria remains a key focus country for the bank within Africa and the Emerging Markets.
The Vice President Prof. Yemi Osinbajo expressed his appreciation to Citi for the very timely presentation, which he said would assist in future planning for the economy.
