Two Neo-Nazis Charged With Plan To Attack U.S. Energy Grid

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6th February 2023

The EU member states and the G7 industrialised countries and Australia said on Friday that they have reached an agreement on a two level price caps for Russian petroleum products.
The caps involve two price levels, $100 per barrel for more expensive fuel like diesel and $45 on lower-quality products such as fuel oil, according to officials.

Sweden, which holds the rotating EU presidency, called it an “important agreement as part of the continued response by EU and partners to the Russian war of aggression against Ukraine”, a report by AFP said.

The EU in December imposed an embargo on Russian crude oil coming in by sea and — together with its G7 partners — set a $60-dollar-per-barrel cap for exports around the world.

The second embargo, on Russian fuel, is set to come into force on Sunday or soon after. It targets Russian refined oil products such as petrol, diesel and heating fuel, arriving on ships.

At the same time, the EU and the G7 group of wealthy democracies have also agreed to impose a price cap on Russian shipments of those products to global markets.

The G7 and Australia statement added that the price cap coalition will undertake a review of the crude oil cap in March. The price caps on those transported products work by establishing a ceiling for the cost of fuel that can be transported on ships.

The caps agreed were in line with a proposal from the European Commission, the EU’s executive arm.

Also Read: US/EU Sanctions: When The New Gear Set In Against Russia

It had to balance tough demands from sanction hawks, such as Poland and Baltic nations, against the need to ensure the West does not cut off Russian supplies to world markets entirely, which would send global prices soaring.

EU diplomats called the agreed price levels “well-balanced” and hitting the goal to “reduce Russia’s income while guaranteeing access for third countries”.

In a separate statement, US Treasury Secretary Janet Yellen applauded the latest decision and said it built on earlier efforts.

“The caps we have just set will now serve a critical role in our global coalition’s work… we are forcing Putin to choose between funding his brutal war or propping up his struggling economy,” she said.

The Kremlin lashed out at the EU ahead of the embargo coming into force, insisting it will “lead to a further imbalance of the international energy markets”.

“We are taking measures to hedge our interests against the risks associated,” Kremlin spokesman Dmitry Peskov told reporters.

Also Read: 3 Days To Dateline, EU Fails To Agree On Russian Oil…

Moscow’s war in Ukraine has provided a harsh wake-up call for the EU, which for years had been reliant on cheap fossil fuels from Russia to power its industries.

Brussels says the embargo on crude oil has seen the bloc cut out some 90 percent of Russian imports, after exceptions were granted for supplies flowing by pipeline to landlocked countries like Hungary.

European Commission president Ursula von der Leyen on Thursday estimated during a visit to Kyiv that the existing price cap on Russian oil was already costing Moscow around €160 million ($175 million) every day.

On Friday, she said the bloc was readying a new round of sanctions against Russia — its 10th package since the war started a year ago.

“We must continue to deprive Russia of the means to wage war against Ukraine,” she said, also highlighting the EU’s import ban on Russian petroleum products from Sunday.

Also Read: Western Sanctions Shrink Russia’s Economy By 2.7%

“With the G7 we are putting price caps on these products, cutting Russia’s revenue while ensuring stable global energy markets,” she said.

AFP

Otedola Votes N40bn To Buy FG’s iPower Plant.

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6th February 2023

The Nigerian government is set to sell five National Integrated Power Projects (NIPPs), and have shortlisted 16 firms. Among the front runners is Geregu Power owned by Femi Oteldola, son of a former governor of Lagos state.

Observers believe that Geregu Power made provision in its 2022 financials, and has raised over N40 billion for the bid. Government sources said the NIPPs are being sold to raise about N260 billion.
Bureau of Public Enterprises (BPE) sources said about 16 companies are bidding to acquire the power generation companies. They include Calabar Generation Company Limited, Omotosho Generation Company Limited, Olorunsogo Generation Company Limited, Benin Generation Company Limited Geregu Generation Company Limited, Kogi state.

Others are Ardova Plc, Sifax Energy, Quantum Megawatt Consortium, Geoplex Drillteq Limited, and Mota-Engil Nig. Globeleq Africa Limited, Pacific Energy Company Ltd., Asfalizo Acquisition Limited, and Central Electric and Utilities Ltd.

Also Read: 2023: Nigeria’s Outlook For Upstream Oil & Gas Sector Positive

There are also Launderhill PJB, North South Power Consortium Unicorn Power Genco Limited, ENL Consortium Limited, Lauderhill Tata, and Connaught Energy Services Limited. Check on Geregu’s financial statement for the period of 2022 submitted on the Nigerian Exchange shows that Otedola company approached the debt market to raise N40.08 billion to finance its bid and boost its chance of acquiring the firm’s preferred power plant.

A part of the Geregu’s financial statement reads: “In July 2022, the company issued N40.085billion unsecured corporate bond for a 7-year tenor and at a coupon and effective interest rate of 14.5% and 14.7% respectively.

“The net proceeds would be used to finance the acquisition of one of the power generation companies which is currently in the final stage of bidding processes by the Bureau of Public Enterprises (BPE).”

Fuel Subsidy Removal In Nigeria Is A Big Opportunity To Switch To Solar Inverters In 2023 – Bome Ojoboh

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6th February 2023

In this exclusive interview with Nairametrics, the chef executive officer (CEO) of Extreme Mutual Technique, Bome Ojoboh, talks about why the solar energy sub-sector could be ready for mass solar adoption following the removal of fuel subsidy.
He also touches on other important issues relating to the renewable energy sector. Enjoy the conversation.

Excerpts…
NAIRAMETRICS: Are upstream and downstream renewable energy players ready for the upsurge of solar technology adoption after fuel subsidy is removed? Why?
Bome Ojoboh: I can say we are; however, the truth remains that the government needs to play a vital role by actively investing in the renewable power sector by encouraging local manufacturing of solar panels, inverters and batteries.
Our biggest expense is the importation of these products and the challenges around sourcing forex has thinned out our margins significantly.

NAIRAMETRICS: What are solar-powered inverters?
Bome Ojoboh: Solar-powered inverters are inverters whose main source of power supply/input is generated by solar modules. They are inverters that have the capability of using solar panels as a charging source to charge the batteries connected to the inverter.
This kind of inverter uses a charge controller which is a device that controls the frequency and current generated by the panels to feed the inverter and enable battery charge and energy discharge.

NAIRAMETRICS: What is the lifespan of the battery and solar panels your company offers?
Bome Ojoboh: The panels we install have a lifespan of between 20-25 years and for the batteries, it depends on the usage/maintenance by the consumer and varies but on average our batteries have a life span of 4-5years after which they gradually deteriorate and can no longer provide the adequate power supply.

NAIRAMETRICS: What damages are likely to occur if solar panels and batteries are moved from one house to another?
Bome Ojoboh: Ideally there should be no damage during relocation as we pride ourselves in ensuring a professional decommissioning of panels and batteries in cases of relocation. However, the nature of damage likely to occur is the breakage of the glass covering the panels.

NAIRAMETRICS: What can a user do to increase solar tech capacity if their load increases subsequently?
Bome Ojoboh: Another very interesting question. You see every solar engineer that is ‘worth his salt’ usually factors expansion into his solar design. This is because most commonly our energy needs tend to increase than decrease in the near future. So, with increased need, the system would be expanded on the users’ request to accommodate the new additions.
To achieve this, it means you will most likely increase the capacity of your inverter to manage the new load. Additionally, the capacity of the panels and batteries will need to be increased to enable enough battery backup time.

NAIRAMETRICS: What are the basic types of solar inverters available in Nigeria? How do they affect home appliances?
Bome Ojoboh: There are two basic types – Modified sine wave inverter and Pure sine wave inverter.
The modified sine wave inverters are the less sophisticated type of inverters and are usually not advised to be used with sensitive appliances because their output power is not clean and as such could cause damage to these appliances over some time.
The good side is that these types of inverters are relatively cheaper in comparison to their Pure sine wave counterpart.
Pure sine wave inverters on the other hand are a very sophisticated type of inverters with very clean power output (that is, less total harmonic distortion, THD). In some cases, the power output of these inverters is cleaner than that of the grid. However, these inverters come at a slightly extra cost than the Modified sine wave inverters.

NAIRAMETRICS: What are the upgrades that have been done in inverter technology that users should know?
Bome Ojoboh: The solar industry has seen rapid technological advancements within the last ten years. With regard to inverters, significant upgrades have been made to their surge abilities, overload protection sensing, temperature regulation and overall performance efficiency.
Panels have more cells to accommodate a higher wattage, therefore, helping to reduce the number of panels to be used per installation. Previously, some panels generated lower wattage resulting in the need to buy more panels to accommodate the load, but technology has significantly increased the cells per panel hence increasing the wattage and reducing the number of panels used to generate a particular amount of energy.
Battery capacity used to be as low as 150 amp/h but technology has improved the efficiency and maintenance of batteries and we now have lithium technology.
Lithium batteries are rechargeable batteries which use the reversible reduction of lithium ions to store energy. Most lithium-ion batteries last five years or more while the average lead-acid battery lasts two years.

NAIRAMETRICS: How much will it cost the average Nigerian to subscribe to off-grid solar power?
Bome Ojoboh: The cost depends largely on the power backup time and the capacity of the equipment to be powered by a Solar system. For example, is it powering a fridge, freezer, ACs, fans, TV, computer, or laptop? etc. The higher the capacity load, the higher the cost involved. Average systems start from as low as N300,000.00.

NAIRAMETRICS: Talk to me about your company’s market penetration, market size, and focus as well as the level of investments in the renewable energy sector in Nigeria.
Bome Ojoboh: Our corporate headquarters is located in Lekki, Lagos. Additionally, our mainland branch is in Anthony, Maryland, Lagos. We also have a presence in the Northern and Eastern parts of Nigeria to serve the markets in that region. Our branches are located in the FCT, Abuja and Asaba, Delta state respectively.
We are scaling up market share by leveraging our online platforms – Instagram, WhatsApp, Facebook page etc. and via our website. We also have business development executives at our four branches in Nigeria spreading the gospel of the Solar energy system.
Over eight years, Extreme has done upwards of a thousand installations, upgrades and maintenance across all geopolitical zones. Market size continues to expand due to our proven track record and through referrals, social media platforms, field marketing etc.

NAIRAMETRICS: How can we make solar inverters more affordable to Nigerians?
Bome Ojoboh: The process will need a holistic review of the power sector, taxes on the importation of solar panels and inverters and heavy investment in the manufacturing industry to help in the research and manufacturing of panels and inverters in the country.
Possible subsidy of the importation to help in reducing the cost of importation and this will most definitely spiral down to help in creating affordability.

NAIRAMETRICS: What markets does your company currently operate in?
Bome Ojoboh: We currently run in the low and medium sectors of service Mostly in urban cities. We are driven to help encourage the gradual and steady diversification of interest from the already existing power scheme to an eco-friendlier renewable power source

NAIRAMETRICS

Nigerdock Adopts Renewable Energy At Snake Island Integrated Zone

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6th February 2023

Nigerdock management has confirmed that the company had completed the first phase of its shift to renewable energy sources through the installation of solar solutions at Snake Island Integrated Free Zone.

Nigerdock is a leading Nigerian maritime company operating the largest multipurpose terminal and shipyard in Lagos servicing customers in the energy, logistics, offshore and shipping sectors.
Chief executive officer, Nigerdock, Maher Jarmakani, said in a statement last weekend that the company is focusing more on renewable energy.

Jarmakani also said that with the installation, Nigerdock would also reduce CO2 output by about 2,000 metric tons and achieve significant emission reduction targets.

“Current solar operations enable Nigerdock to displace 40% of its daytime energy consumption, reduce CO2 output by about 2,000 metric tons, and achieve significant emission reduction targets.
“As a self-sustaining economic hub, improving our energy consumption and reducing our carbon footprint is pivotal to our long-term operations and success. Our renewable energy solution will provide us and our growing clientele with consistent power and greater ease to conduct business,” he said.

Jarmakani said the installation of solar solutions at Snake Island Integrated Free Zone project was part of a wider push by Nigerdock to develop 20megawatts of sustainable, cost-effective, and reliable power within the free zone.

According to him, the solar power expansion is the next step in Nigerdock’s journey towards green port status. The company boss highlighted the company’s vision and commitment to Nigeria’s climate change act, the blue economy, and the United Nations’ Sustainable Development Goals.
As a wholly-owned subsidiary of Jagal, a diverse Nigerian conglomerate, the company has achieved substantial growth while developing into the largest fabrication facility and ship repair yard in West Africa

Also Read: Nigeria, Egypt Sign Pact On Electricity Sector Development

It was the dream of becoming a shipbuilding nation that prompted the Nigerian government to build Nigerdock on Snake Island in 1986.

And the shipyard was thriving until 2002, when government decided to privatise the once sprawling entity.

Before it was privatised, the company had graduated from merely repairing ships to actual shipbuilding, especially small craft, boasting a total of 28 vessels it had constructed over the years.
By 2001, it had also repaired over 600 vessels of various specifications, with more than 1,500 staff on its payroll, out of which 600 were permanent workers.

2002, when government announced its intention to privatise the company for which its foreign technical partners, Navimor from Poland, indicated interest as the core investor, Nigerdock held great promise for the country’s industrial growth
As Navimor already had issues with the federal government, due to alleged claim of 30% ownership of the firm prior to privatisation, it made no sense to the authorities to hand over the company to it as a core investor.

Thus, Global Energy Company consequently won the bid before it handed the shipyard over to the current managers, Jagal Nigeria Limited, which is now focusing more on fabrication of oil and gas equipment, rather than ship repair for which the company was known.

At this stage, the company had a floating dock constructed in Poland with lifting capacity of 3000/1800 tons and was equipped with ultra modern machineries and an off-shore construction areas for the building of structures, oil rigs equipped with 60 tons capacity, mobile cranes and 150 tons crawler crane for handling even the heaviest construction pieces.

Also Read: Nigeria: Equinor Ready To Divest $1bn Stake In Agbami Offshore Field

From Nigerdock, the premier dockyard in Nigeria, there has been an emergence of other privately owned shipyards in Lagos and Port Harcourt.

Presently, the country has nine shipyards, some of which are fully operational. They are 25,000 tones capacity Nigerdock on Snake Island, Lagos, Starzs Marine and Engineering Ltd. (Starzs Shipyard) in Onne area of Port Harcourt.

Others are West Atlantic Shipyard, also in Onne, Naval dockyard in Lagos, which is mainly used to service military vessels and a few commercial ships, non-functional continental shipyards in Lagos, a non-functional Naval Shipyard in Port Harcourt, non-functional Technitrade Shipyard in Warri, West African ventures and Nestoil in Port Harcourt, though still under development.

But these facilities seem not enough to service the over 1,200 vessels operating within Nigerian waters. They are of low capacity and cannot handle large vessels, especially those operating offshore.

By Bosco Agba

Don’t Lose Sight Of Vision 30:30:30, Minister Urges REA

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6th February 2023

…Use Renewable Energy To Bridge Nigeria’s Energy Gap

The Nigerian government has charged its electricity agency to consider focus and use of renewable energy as quick solution to bridge the electricity gap in the country.Speaking during the weekend in Abuja, minister of state, power, Goddy Jedy-Agba, said the Rural Electrification Agency [REA] should not lose sight of it Vision 30:30:30, which is aimed at raising the electricity generation capacity to 30,000MW by 2030, of which 30 per cent will be from renewable sources.

Also Read: NUPRC to End Inaccurate Accounting for Nigeria’s Oil, Gas Production

The minister was the guest at the REA management and board retreat held in Abuja. According to him, projects implemented through will go a long way in closing the energy gap and enlivening unserved and underserved Nigerians.Speaking under the theme of the retreat, which was, “Institutional Strengthening for Sustainable Development”, Agba said that renewable energy was the quick solution to bridge the electricity gap in the nation, pointing out that that was reason why the federal government planned to continue to optimise it.

“We must not lose sight of Vision 30:30:30, aimed at raising the generation capacity to 30,000MW by 2030, of which 30 per cent will be from renewable sources.“ While drawing in quality investments and private sector participation in the space, this administration’s efforts to improve energy access through on – and off-grid electrification solutions are commendable.

Also Read: Nigeria: The Bane of Diesel Economy

Already, we can see how pivotal this agency is to this vision and the critical roles it must continue to play in the global conversation on energy transition and off-grid electrification, ‘’he said.He reiterated that REA was undertaking a series of reforms to enhance the workforce, improve the institutional systems, and pursue innovative programming strategies.

“I am delighted that the REA has consistently proven to be a forward-leaning agency, open to learning and continuous improvement. I am confident in the current REA management and board. We all witness the positive effects of their leadership and dedication to the agency’s unprecedented growth and impact.

“Beyond the quality exchange of knowledge and optimisation of expertise, a healthy and productive collaboration is desirable for an agency such as the REA, ‘’ he said.

By Kene Okafor

US/EU Sanctions: When The New Gear Set In Against Russia

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6th February 2023

EU Agree On $100 Russian Diesel Price Cap To Third Party Countries

Last weekend the EU agreed to support a price cap level of $100 per barrel on Russian diesel sales to third-party countries.

The regional body’s ban on Russian seaborne crude oil products imports, including diesel and naphtha, is scheduled to go into effect yesterday.

Bloomberg reported that the EU’s proposal, submitted last week, called for capping the price of Russian diesel sold to third countries at $100 per barrel for products that trade at a premium and $45 for those that sell at a discount.

Similarly to the price cap on Russian crude, buyers outside the EU would continue to have access to Western insurance and financing for cargoes if they comply with the price cap.

The proposal also included setting a price cap of $45 per barrel for discounted products such as fuel oil, which sources suggest has also been approved.

The idea behind the price caps is to limit Russia’s revenues and at the same time limit their chances of winning the war against Ukraine.

Despite the ban and price cap mechanism that are set to go into effect yesterday, [Sunday], Russia’s energy minister said he saw no reason to reduce the country’s output on petroleum products, nor was it considering a reschedule for its refinery maintenance to make use of possible reduction in Russian demand.

Even as the price cap went into effect yesterday, there is a grace period for cargoes loaded before the cap agreement was made, that would run until April, the report said.

Earlier in the week, Russian diesel prices stood at $90, below the cap. Midweek, Wood MacKenzie predicted that a $100 cap may not have a significant effect on Russian refiners, but could bring its diesel exports down about 200,000 bpd.

Also Read: 3 Days To Dateline, EU Fails To Agree On Russian Oil…

Russia’s Oil Revenues Slumps

Following the grip of the EU/US sanctions against Russia, the country’s budget revenues from oil and gas plunged in January by 46% compared to the same month last year.

The country’s revenues from energy sales – including taxes and customs revenues – reportedly went down last month to the lowest level since August 2020, according to data from its finance ministry compiled by Reuters.

In January 2023, the price of Russia’s flagship Urals grade averaged 42% lower than in the same month of 2022, as its discount to Brent Crude grew wider following the EU embargo and the G7 price cap, which came into effect on December 5.

The average price of Urals in January, at $49.48 per barrel, was 1.7 times lower than in January 2022, when it averaged $85.64 per barrel, Russia’s finance ministry said earlier last week.

Russia is considering taxing its oil firms based on the price of Brent – instead of Urals – to limit the fallout on the Russian budget revenues due to the widening discount of Urals to Brent, Russian daily Kommersant reported on Friday, quoting sources.
Russia is believed to be looking at ways to reduce the steep discount on Urals and to stabilize its oil revenues. President Vladimir Putin reportedly ordered the government at January end to submit within a month proposals to change the methodology for calculating the taxes from oil, Kommersant’s sources said.

Finland-based Centre for Research on Energy and Clean Air (CREA) said in a report last month that the EU oil ban and price cap are costing Russia an estimated $174 million (160 million euros) per day due to the fall in shipment volumes and prices for Russian oil.

The revenue losses are expected to rise to $304 million (280 million euros) per day with additional measures that are being implemented as of yesterday [February 5], according to CREA.

Also Read: Iran, Russia Integrate Mutual Banking Systems To Evade SWIFT Sanctions

Putin Sees No Need To Cut Oil Output

Despite the effect of the first phase of the sanctions against Russia by the EU and its US allies, and while the threat of the second stanza starred at the country, reports last Friday said the country does not see need to reduce the country’s petroleum products output.

Russian energy minister, Nikolai Shulginov was quoted last Friday saying, Russia “will analyze what the effects of the embargo will be.”
According to him, “So far we have no reason to believe that we will see a sharp reduction in the processing or production of petroleum products,” Russian news agency Interfax quoted Shulginov as saying.

Russia is not considering postponing or rescheduling refinery maintenance because of the EU embargo, either, the energy minister said.
On the side of the EU, the new sanctions, effective yesterday, banned seaborne imports of Russian refined oil products and around 1 million barrels per day (bpd) of Russian diesel, naphtha, and other fuels need to find a home elsewhere if Moscow wants to continue getting money for those products.

More than half of those Russian fuel exports to the EU are diesel. Ahead of the embargo set to kick in on Sunday, Europe continues to be the biggest buyer of Russian diesel, and it has been stocking up on Russian supply in recent months ahead of the ban.

Also Read: Western Sanctions Shrink Russia’s Economy By 2.7%

Russia Considers Taxing Oil Firms To Limit Losses

As part of afloat-sailing devices, Russia is reported to be considering taxing its oil firms based on the price of Brent – instead of its flagship grade Urals.
The idea is to limit the fallout on the Russian budget revenues due to the widening discount of Urals to Brent, Russian daily Kommersant reported on Friday, quoting sources.

Russia is looking at ways to reduce the steep discount on Urals and to stabilize the oil revenues.
The price of Urals has slumped to a discount of nearly $40 per barrel to the price of Brent Crude, which reduces Russia’s budget revenues from oil export taxes. Since the start of the EU embargo on crude oil imports from Russia and the G7 price cap, the per-barrel crude export duty for the Russian state has shrunk due to the plunge in the price of the Urals grade.

Urals crude traded at $49.48 per barrel in January, with rising transportation costs compounding a discount that has seen the country’s flagship crude price plunge year over year.
The average price of Urals in January, at $49.48 per barrel, was 1.7 times lower than in January 2022, when it averaged $85.64 per barrel, Russia’s finance ministry said earlier this week.

The lower the price of Urals is, the lower the export duty on crude and petroleum products is, thus reducing revenues for the Russian budget.
According to Kommersant, seeing a threat to the most important budget revenue stream – oil, Russian authorities are now considering amendments in the tax legislation. The leading idea is to tie the calculation of the export duty to the price of Brent instead of Urals.

The price cap hasn’t impacted materially Russia’s crude oil export volumes, yet, but it has impacted revenues, due to the hefty discount of Urals to Brent. Per Russian finance ministry’s data cited by Kommersant, the tax collected from companies fell by 10% in December compared to November, to $6.75 billion (474.8 billion Russian rubles).

PENGASSAN Urges FG To Revoke Licenses Of Marketers Hoarding Petrol

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3rd February 2023

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on the Federal Government, through the management of the Nigerian Midstream and Downstream Petroleum Regulatory Authority [NMDPRA] to revoke the license of oil marketers causing artificial scarcity and petrol price hike.

PENGASSAN called on NMDPRA to mobilise all their staff across the country to monitor compliance, stating that anyone found wanting should have their license revoked to serve as deterrent.

Also Read: Nigeria Blames Cross-Border Smuggling For Fuel Scarcity

In a statement on Wednesday, PENGASSAN warned that should the collusion go on unchecked, the union would not hesitate to partner with other stakeholders in ensuring that Nigerians are not further exploited.
President and secretary general of PENGASSAN, Festus Osifo and Lumumba Okugbawa, who in the statement, empathized with Nigerians on the hardship currently faced with the scarcity and drastic hike in the price of petrol, urged NMDPRA to compel all marketers and retailers to make the products available at approved price.

The union said it has been following up with its members in NNPC Trading Limited, who are responsible for assigning the products to marketers and from NMDPRA in various depots and terminals across the country that are responsible for issuing cargo clearance, monitoring compliance, routing inspection, metering calibration/maintenance, accurate delivery to trucks and record keeping on the need to carry out their functions expeditiously.

Also Read: NAEC Calls For Immediate End Of Fuel Scarcity In Nigeria

According to PENGASSAN “even though we have some good marketers who tend to play by the rules, others who are overbearing have deployed methods of creating artificial scarcities in order to hike the price of the product uncontrollably as the prices of the product now sells between N185 and N650 depending on your location and outlet.

“From data available to us from our members, there is over 30 days PMS sufficiency in the country; hence there is no basis for the current scarcity and hardship that Nigerians are being subjected to.”

The Guardian

NNPC Ends 24-year PSC Contract With Addax Petroleum

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3rd February 2023

…Recovers 4 Oil Wells

The Nigerian National Petroleum Company Ltd (NNPC) has confirmed the take-over of the Production Sharing Contract (PSC) for four oil wells from Addax Petroleum Development Nigeria Ltd.

The development marks the end of a 24year business relationship on the listed PSCs between the NNPC and Addax Petroleum Development.

In a statement yesterday, the state oil company, now a limited liability company, said the contract was amicably terminated three months after the execution of the Addax Transfer, Settlement, and Exit Agreement (ATSEA) for the PSC oil blocks, OMLs 123/124 and 126/137, operated by Addax all closing obligations have been concluded and the assets have been transferred to the concessionaire, NNPC Limited.

Also Read: NNPC Issues Timeline For Completion Of 14 Oil Wells in 2023

“Consequently, NNPC has taken necessary steps to take over the assets and oversee a clean, amicable, and speedy exit for Addax Petroleum Ltd., operate the asset on interim basis as a first step and subsequently appoint a competent replacement PSC contractor while NNPC continues to remain the Concessionaire of the assets in line with extant laws and regulations,” it noted.

While the TSEA was signed in November 2022, the transfer of the oil wells to NNPC took place on Tuesday January 31, 2023.

Addax reportedly transferred the operatorship of OMLs 123/124 and 126/137 to Antan Producing Limited on interim basis through the transition period pending the emplacement of a substantive replacement PSC in compliance with the directive of Mr. President

Also Read: NNPC Lawyers Walk Out In Ararume’s Suit Challenging Sack From Board

NNPC Ltd has also appointed the Transition Team lead, Mr Sagiru Jajere, as the managing director of Antan Producing Ltd. Before his appointment, Jajere was the head of PSC investment management at the NNPC upstream investment management services (NUIMS).

He will be supported by a team of highly competent personnel with in-depth knowledge of the peculiarities of the Addax Assets. The company and NNPC had a long running battle over the operation before the latest amicable settlement.

By Ken Okoye

Wabote Receives Leadership Local Content Champion Award

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3rd February 2023

“We have taken NCDMB to become the best agency in the country. We will continue to excel, and I hope the staff will continue to be proud of the organisation they belong to” – Wabote

The season of Excellence Awards seem to be renewed 2023 for Executive Secretary, Mr. Simbi Kesiye Wabote and the management of the Nigerian Content Development Management Board [NCDMB] as the drums rolled out once again for award of Leadership Local Content Champion of the Year Award at the 14th Leadership Conference and Awards held at the International Conference Centre, Abuja.

It was the second leadership in a very short time. Last week, the Board was adjudged and voted a “Level 5 Platinum Level organization” in a summary report of the Bureau of Public Service Reforms (BPSR) Self-assessment Tool (SAT) released yesterday

The rating made by a federal government bureau translates as “Exceptional Performance with a performance level of 90.5%.”

Also Read: Guinea Delegation Visits NCDMB To Understudy Local Content Management

The Leadership Local Content Champion of the Year Award was presented to Mr. Wabote and his team by the minister of the Federal Capital Territory [FCT], Alhalji Mohammed Musa Bello, at an event that was chaired by Vice President Yemi Osinbajo, with former Kenyan Prime minister, Mr. Raila Amolo Odinga as the guest speaker.

Speaking after receiving the awards, ES announced the dedication of the honour to the management and staff of the Board, whom he credited with delivering the sterling accomplishments that attracted the attention of the award adjudicating panel and other stakeholders.

He said: “Every award is dedicated to the staff of NCDMB because they do the heavy lifting. My role is to provide direction and leadership. We have taken NCDMB to become the best agency in the country. We will continue to excel, and I hope the staff will continue to be proud of the organisation they belong to because it has been a rewarding journey, and being recognised is also very exciting.”

Also Read: NCDMB Boss Bags Nigeria’s Excellence in Public Service Award

Some of the reasons the ES was selected for the award included completing the 17-storey Nigerian Content Tower within four years, raising the level of Nigerian Content performance in the Nigerian oil and gas industry from 26% in 2016 to 52% in 2022.

Wabote was also honoured for the development of the Nigerian Content 10-year strategic roadmap, with the key target of achieving 70% Nigerian Content in the oil and gas industry.

The NCDMB under ES also established hubs in-country for manufacturing of equipment, components, and accessories required by the industry and for championing the promotion of local content across the African continent.

US Monthly Crude Oil Production Falls

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3rd February 2023

New data from the Energy Information Administration shows that crude oil production in the United States fell in November

The data shows that U.S. crude oil production fell to an average of 12.375 million bpd in November—down 35,000 bpd from the month prior. It is the latest monthly production data to be released by the EIA. It is the highest average monthly production level since March 2020.

According to the report, in November 2019, U.S. crude oil production reached an all-time high of 13 million bpd, but fell spectacularly in early 2020 after the pandemic set in.

Also Read: U.S., EU Mobilize $8.5bn Support For South Africa’s Energy Transition

EIA figures for the weekly production of crude oil in the United States painted a different picture of November production, with each week reportedly averaging 12.1 million bpd. Weekly production shows December production nearly the same, with a slight 100,000 bpd uptick so far during the first three weeks of January.

Meanwhile, EIA data showed that demand for U.S. crude oil—and the petroleum products associated with it—rose 178,000 bpd in November to 20.59 million bpd.

In its most recent Short-Term Energy Outlook, the EIA projected that the United States would produce 12.4 million bpd this year and 12.81 million barrels of crude oil per day by 2024—with both years breaking the annual record average of 12.3 million bpd reached in 2019.

Also Read: WoodMac Predicts That $100 Price Cap On Russia’s Oil Products Won’t Crush Refiners

The EIA’s projections see output from the Permian increasing by 470,000 bpd to a record 5.7 million bpd this year—a figure that has been questioned by some industry analysts.

The EIA has estimated that the price of a Brent barrel will drop by 18% this year compared to 2022 levels, with WTI falling to $77 per barrel this year.

The millions of barrels of crude oil sold into commercial inventories from the nation’s Strategic Petroleum Reserves came to an end in the first week of January, and in combination with falling production, could be seen as a bullish signal.

By Bosco Agba

3 Days To Dateline, EU Fails To Agree On Russian Oil Products Price Cap

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3rd February 2023

Member nations of the European Union are hoping to strike a deal on a price cap for Russian oil products this Friday, after delaying a vote on Wednesday due to disagreements among member states.

A fortnight ago, the European Commission had put forward a proposed price cap of $45 per barrel for discounted Russian oil products, such as fuel oil.

The EC also proposed a $100/barrel restriction on premium Russian oil products, such as diesel.
Reuters reported yesterday that a settlement is hoped for on Friday, but optimism is not running high as all 27 members of the bloc must agree on the final price cap figures in order to move forward by February 5th, when the price cap is set to go into effect.

Also Read: Iran, Russia Integrate Mutual Banking Systems To Evade SWIFT Sanctions

A similar chain of events took place last week, when EU officials failed to reach an agreement on Friday, January 27th. Last week, EU officials also discussed the G7’s $60/barrel price cap on Russian crude, which is set to be reviewed every two months.

In December, the EU agreed that the price cap set on Russian crude oil (currently $60) should be maintained at a minimum of 5% below average market rates.

The Baltic states of Estonia and Lithuania, along with Poland, are all pushing for a lower price cap on Russian crude, while simultaneously pressuring the bloc for a higher price cap on Russian oil products starting on February 5th. These countries are seeking a $40-$50 price cap on Russian crude to hamper Moscow’s revenue collections, which are financing Putin’s war against Ukraine.

Also Read: Western Sanctions Shrink Russia’s Economy By 2.7%

With regards to the February 5th price cap on Russian oil products, diesel remains a significant hurdle in the agreement. According to the European Commission, the $100 price cap on Russian diesel may be high enough to ensure that Moscow continues to export, but could result in Asian buyers balking at prices and opting instead to buy cheap Russian crude and refine diesel at home, Reuters reported.

By Ken Okoye

Iran, Russia Integrate Mutual Banking Systems To Evade SWIFT Sanctions

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3rd February 2023

Vladimir Putin, Hassan Rouhani — Russian President Vladimir Putin, right, and Iranian President Hassan Rouhani shake hands as they meet at the Shanghai Cooperation Organization summit in Dushanbe, Tajikistan, Friday, Sept. 12, 2014. Iran has an observer status at the Shanghai Cooperation Organization summit. (AP Photo/RIA Novosti, Mikhail Klimentyev, Presidential Press Service)

Iran and Russia are believed to have integrated their interbank communication and transfer systems to help enhance trade and financial operations, and possibly evade the strict US/EU economic sanctions on their financial infrastructure.

Following an agreement, so far 52 Iranian and 106 Russian banks are connected through the Russian Financial Message Transfer System, which will facilitate economic relations between the two countries, said deputy governor of the Central Bank of Iran, Mohsen Karimi.

“This system is immune to sanctions as it is based on the infrastructures of both countries,” Karimi said, according to Iran’s Mehr news agency.

Also Read: Western Sanctions Shrink Russia’s Economy By 2.7%

It would be recalled that the global consortium SWIFT, the world leader in secure financial messaging services, excluded Iranian banks from its system following the reimposition of economic sanctions by the United States on Iran in 2018.

As a result of that suspension of services, the Iranian banking system is disconnected from the international one, making banking transactions with other countries difficult. Russia was partially excluded from SWIFT last year due to its invasion of Ukraine.

While economic relations between the two countries have grown to 4 billion in recent years, Tehran has sold drones to Russia, which it has used in its invasion of Ukraine.

Observers note that official trips between the two countries have also multiplied in recent months, with Iranian President Ebrahim Raisi visiting Russia in January 2022 and Iranian Foreign Minister Hosein Amir Abdolahian making two trips to the Russian capital in less than a year.

Also Read: Libya: Oil Ministry Kicks $8bn Gas Deal With Eni, Saying It Is Illegal

“In today’s world, a country’s status is largely related to its economic power … We need economic growth to maintain our regional and global position,” Iran’s top authority, Supreme Leader Ali Khamenei, said in a televised speech.

Additionally, deputy governor of Iran’s Central Bank, Mohsen Karimi, announced: “Iranian banks no longer need to use SWIFT… with Russian banks, which can be for the opening of Letters of Credit and transfers or warranties.”

By Ken Okoye

Shell Joins League Of Supermajors Flying Huge Earnings, Even As Profits Double

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3rd February 2023

Global energy giant, Shell has reported adjusted earnings of $39.9 billion for the business year 2022. This figure represents double the earnings from 2021.

This development published yesterday makes Shell the latest Big Oil firm to Deliver record shaking profits for last year.

The company said its adjusted earnings doubled to $39.9 billion in 2022 from $19.3 billion in 2021, thanks to higher realized oil and gas prices, high refining margins, and strong trading results mainly in the gas, chemicals, and renewables divisions.

Along with the results, the supermajor announced a 15% dividend increase for the fourth quarter, as well as $4 billion in share buybacks, which are expected to be completed by the Q1 2023 results announcement in early May.

Shell’s 2022 results include charges of $2.3 billion related to the EU solidarity contribution and the UK Energy Profits Levy—the windfall taxes Europe introduced last year for energy producers.

Also Read: Exxon Posts Record Breaking Profits In Western Oil Company History

Shell’s record profits and the record earnings at the U.S. supermajors could intensify calls for more taxation on oil and gas majors as consumers continue to see high energy bills.

ExxonMobil reported on Tuesday $55.7 billion in earnings for 2022 in a record-breaking earnings tally for any Western oil supermajor ever.

High oil and gas prices were the key reasons for higher profits at Exxon, which beat its own annual earnings record of $45.2 billion from 2008 – when oil prices hit a record $142 per barrel – and posted the highest-ever annual profit by a major Western oil firm.

The other U.S. supermajor, Chevron, on Friday also reported its highest annual profit ever as its adjusted earnings for last year more than doubled from 2021 to hit $36.5 billion on the back of higher oil and gas prices and record U.S. production.

Also Read: WoodMac Predicts That $100 Price Cap On Russia’s Oil Products Won’t Crush Refiners

Analysts have expected that ExxonMobil, Chevron, BP, Shell, and TotalEnergies will reap $200 billion in combined yearly earnings for 2022 thanks to the jump in oil and gas prices.

BP and TotalEnergies are due to release Q4 and full-year earnings on February 7 and February 8, respectively.

The record profits at the majors already drew criticism from the White House, which slammed Exxon’s record earnings for 2022 as “outrageous.”

NCDMB Begins New Year With Platinum Level Ranking

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2nd February 2023

The Nigerian Content Development and Monitoring Board (NCDMB) has emerged a “Level 5 Platinum Level organization” in a summary report of the Bureau of Public Service Reforms (BPSR) Self-assessment Tool (SAT) released yesterday

According to the federal government bureau, the rating translates as “Exceptional Performance with a performance level of 90.5%.”

Last September, the Board was adjudged the best among ministries, departments, and agencies (MDAs) in the Executive Order (EO1) performance ranking for Ease of Doing Business for January to June 2022.
After that ranking by the Presidential Enabling Business Environment Council (PEBEC), NCDMB’s executive secretary, Mr. Simbi Kesiye Wabote, was conferred with the “Distinguished Capacity Development Award” by President Muhammadu Buhari in October.

The Bureau of Public Service Reforms [BPSR], at a presentation ceremony at the NCDMB conference in Yenagoa, noted that the board structured to achieve its vision, mission and strategic objectives, which have been effectively communicated to relevant stakeholders and well understood by staff.

Also Read: Guinea Delegation Visits NCDMB To Understudy Local Content Management

Continuing in what it terms “validated assessment and in-depth analysis of processes and practices of the agency,” the Bureau reported that “NCDMB has adopted robust financial and accounting policies that comply with financial regulations and are clearly reviewed to ensure efficient and reliable financial reporting, such as e-payment for all transactions – supplies, contracts, salaries and entitlements of staff.”

On the Board’s ‘Key Areas of Weakness,’ the Bureau said among other things that “The governing board has not ensured the establishment of an anti-corruption policy with an entrenched whistle-blower mechanism for NCDMB,” and that “The organisation’s strategic plans did not incorporate generation of additional financial resources with mechanisms to ensure transparent management and reporting on performance such resources.”

To underscore its conviction that NCDMB would strive for higher levels of performance beyond its Level 5 Platinum ranking, the Bureau recommends that the Board “Develop formal code of conduct defining standards of behavior to which individual governing board members of NCDMB subscribe and adhere.’

Also, that “The procurement staff are encouraged to sign an affidavit regarding their commitment not to engage in practices involving conflict of interests to improve compliance with the provisions of PPA 2007 [Public Procurement Act, 2007.”

Also Read: NCDMB Commissions Quality Control Laboratories

Presenting the report, the director general, BPSR, Dr. DasukiArabi, hinted that NCDMB is the first agency under the ministry of petroleum resources that submitted itself willingly to undergo the assessment since the Bureau was mandated to deploy the tool in all federal ministries, departments and agencies.

Represented by the head, strategy, innovation and research, BPSR, Mrs. Mercy Okon, the director general confirmed that the assessment was free from any influences and recommended the Board work with the Bureau to deepen reforms.

In his closing remarks on behalf of NCDMB management, director of monitoring and evaluation, Mr. Akintunde Adelana, thanked the BPSR, particularly its director general for the painstaking assessment exercise and assured that the exceptional grade achieved by NCDMB would spur its staff to even do better.

Also Read: NCDMB Concludes ‘Entrepreneurship Skills Development, Access To Finance’ Training for…

While noting that getting the Platinum Level award is no mean feat, he promised that recommendations made by the BPSR would be carefully studied and implemented for even greater results.

WoodMac Predicts That $100 Price Cap On Russia’s Oil Products Won’t Crush Refiners

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2nd February 2023

WoodMac has predicted that the Western-invoked price cap on Russian refined products coming into effect on February 5 won’t “severely impact” Russian refiners, contrary to popular belief.

WoodMack, also known as WoodMackenzie, is a global research and consultancy group supplying data, written analysis, and consultancy advice to the energy, chemicals, renewables, metals, and mining industries.

WoodMac’s research director of short-term refining & oil products, Marke Williams, said that the oil products cap would have a minimal impact of Russia’s refining runs and distillate exports.

Also Read: EU Leaders Fail To Agree Over Price Cap On Russian Oil Products

“With Russian Urals trading at US$40/bbl on an FOB basis, capping the price at US$100 per barrel and US$45/bbl respectively would still see Russian refining margins of US$20-US$30 per barrel,” Williams said, adding that “At these levels, Russian refining economics are still very strong, so the incentive to refine crude into oil products remains high.”

According to WoodMac, Russia’s refiners could have a difficult time finding other barrels for its distillates that typically go to Europe. But if the price cap ends up being as high as it is proposed to be, Russia could still afford to discount its distillates by $200 a tonne vs. market benchmarks before it was uneconomical.

Gelder sees the next few months are particularly volatile as trade flows reshuffle, with potential buyers choosing to forgo their reputation to get their hands on cheap Russian diesel.

Also Read: Russia Hopes On Its $45bn Reserve In Yuan To Weather Plunge In Energy Revenues

Still, “We do not see the price caps having any additional impact on trade flows at the currently proposed levels, but if flows to new markets continue to develop as pricing discounts widen there remains an upside risk to both Russian refining crude runs and distillate exports in 2023,” Gelder added.

The $100 proposed price cap is being considered after the G7 came up with a range of prices based partially on the price of Russian crude oil, which is already subject to a price capping mechanism.

Western Sanctions Shrink Russia’s Economy By 2.7%

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2nd February 2023

America believes that the result of Western sanctions against Russia is at the corner and would be noticed shortly. A US official said the sanctions have been “very effective” in cutting off Russia’s war machine, amid growing questions about Moscow’s ability to circumvent the measures.

In an interview with RFE/RL, Robin Dunnigan, a deputy assistant U.S. secretary of state, said the economic sanctions imposed after Russia invaded Ukraine in February 2022 were putting pressure on Moscow, and “we will see the results of that in the coming months and years.”

Russia’s economy has been squeezed by the Western sanctions, contracting around 2.7% in 2022, according to Western estimates, but not as badly as some Western governments had hoped.
The country continues to export oil and gas, despite Europe all but cutting itself off, and that’s allowed Moscow to bring in sizable revenues.

Also Read: EU Leaders Fail To Agree Over Price Cap On Russian Oil Products

The International Monetary Fund [IMF] predicted Russia’s economy will expand just 0.3% in 2023, which is an improvement from earlier forecasts of a contraction up to 2.3%.

The Russian economy is believed to have held up well due to long-standing conservative fiscal policies and revenues from natural-resource sales overseen by President Vladimir Putin himself.

Some experts say Moscow has at least three more years of funding to continue the war at the current pace of operations. Russia has also managed to circumvent many of the restrictions on dual-use technologies, such as semiconductors, through increased trade with countries like China, India, and other countries have also stepped in to replace supply chains for consumer goods like smartphones, appliances, and cars and trucks.

In the interview, Dunnigan also accused Belarus, which has provided logistical support for Russian troops, of being an “accomplice” in the war.

Also Read: Russian Oil Exports To India Heading New High In 2023

“I do not think that Belarusians want a war against Ukraine to be waged from their country. Therefore, I do not think that he represents the will of his own people,” she said. “And I think that’s tragic. I think that the consequences for the Belarusian people, who did not want to have anything to do with it, are truly terrible.”

She said the United States continued to press Belarus for free and fair elections. Strongman leader Alyaksandr Lukashenka claimed reelection to the presidency in 2020, sparking months of unprecedented streets protests and further isolation from the West.

Dunnigan was scheduled later to travel to Poland to meet with Polish officials about the situation in Belarus.

2023 Global Uncertainties, Yet U.S. Refiners Expect High Margins

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2nd February 2023

A number of permutations are coming in on the back of the EU ban on seaborne imports of Russian oil and a rebound in Chinese demand.

The EU will ban—effective February 5—seaborne imports of Russian refined oil products and around 1 million barrels per day (bpd) of Russian diesel, naphtha, and analysts say other fuels need to find a home elsewhere if Moscow wants to continue getting money for those products.

“Uncertainties remain around the pace and impact of China’s recovery, the magnitude of a potential US or global recession, and the impact of Russian product sanctions. But despite these unknowns, we believe that the current supply constraints and growing demand will support strong refining margins in ’23,” Marathon Petroleum’s CEO Mike Hennigan said on Tuesday.

Also Read: Russian Oil Exports To India Heading New High In 2023

“Given the dynamic nature of the situation in Russia, that supply assurance component is really a big unknown, but we feel well — very well positioned to take advantage of that, given our position in the Atlantic basin,” said Brian Partee, senior vice president, Global Clean Products Value Chain.

ExxonMobil’s CEO Darren Woods said that “If demand picks up, economies continue to grow, we’re going to see that tightness manifest itself in continued high refining margins, which I think will mean fairly high margins this year and potentially going into 2024 as well.”

The EU sanctions on Russian fuel imports are bullish for U.S. refining margins, although the timeline for the bullishness will likely be beyond the second quarter, due to Europe stocking up on diesel ahead of the ban, said Marathon Petroleum’s Partee.

Also Read: EU Leaders Fail To Agree Over Price Cap On Russian Oil Products

“We’re entering the sanction period of time at really historically high levels of inventory, particularly in Europe. So, we view it as 2Q and beyond timeline perspective. But, directionally, we see it as bullish for cracks.”

By Ken Okoye

Libya: Oil Ministry Kicks $8bn Gas Deal With Eni, Saying It Is Illegal

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2nd February 2023

Libya’s oil ministry has kicked the $8 billion oil deal that the Italian energy giant, Eni signed with the Libyan National Oil Corporation (NOC) last weekend. The agreement was signed in the presence of Italian prime minister, Giogia Meloni and her host Abdulhamid Dbeibah, who heads the UN-brokered Government of National Unity, which is contested by a rival administration in the east.

In the query raised by the oil minister, Mohamed Aoun, he posited that the $8billion agreement violated legislation and was not approved by the ministry prior to the signing.

Eni’s chief executive, Claudio Descalzi and the CEO of the National Oil Corporation of Libya, Farhat Bengdara, had agreed last Saturday on the development of “Structures A&E”, a strategic project aimed at increasing gas production to supply the Libyan domestic market as well as to ensure export to Europe.

Also Read: Eni Signs Energy Security Agreements With Algeria’s Sonatrach

Under the deal, the combined gas production from the two structures will start in 2026 and reach a plateau of 750 million standard gas cubic feet per day, Eni said in a statement. The overall investment is estimated at $8 billion, with a significant impact on the industry and the associated supply chain, allowing a significant contribution to the Libyan economy, the Italian group said.

However, Mohamed Aoun, Libya’s Oil and Gas Minister in the Tripoli-based government led by Al-Dbeibah, rejected the deal because, he says, it bypassed his oil ministry and cabinet approval and changed a previous deal signed in 2008.

Aoun and his supporter Fathi Bashagha, the rival eastern-based prime minister appointed by Libya’s Parliament, have now rejected the deal.

Also Read: Russia Denies ‘Noticing’ Price Cap On Its Crude Oil Sale

Aoun said in a video recording seen by Libya Herald the agreement is illegal and lacks equality between Libya and Italy, the oil minister

Libya’s inner political struggle could delay the start of gas flows from the project from Libya to Europe, which has pinned its hopes—especially through Italy—on increased gas supply from North Africa and the Eastern Mediterranean.

By Bosco Agbo

Exxon Posts Record Breaking Profits In Western Oil Company History

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2nd February 2023