...refuses to disclose exact spot of spill

The Kuwait Oil Company has declared a state of emergency following an oil spill in the west of the country. The company is state-owned by one of OPEC’s frontline producers.

AFP reported that no persons or infrastructure have been injured or tampered with following the oil spill. Also there have not been any oil production disruption after the incident, the agency quoted the company.

Kuwait’s Al Rai newspaper published a photo of oil gushing out of an oil well, also saying that there have not been injuries reported or any disruption to production.

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No toxic fumes have been reported, either, company spokesman Qusai al-Amer was quoted as saying.
The leak “occurred on land but not in a residential area”, the spokesperson later told AFP, but declined to specify the exact location of the spill.

Kuwait Oil Company said it has already sent emergency response teams to determine the source of the leak and contain the oil spill, the spokesman added. Previously, the company reported oil spills from the fields it operates in 2016 and in 2020.
Kuwait, one of the largest producers in OPEC, pumps around 2.7 million barrels of per (bpd) of crude oil. At 2.683 million bpd production in February, per OPEC’s secondary sources, Kuwait is the fourth-largest OPEC producer after Saudi Arabia, Iraq, and the United Arab Emirates (UAE).

Kuwait, alongside Saudi Arabia and the UAE, is one of the few major oil-producing countries to target an increase it its oil production capacity. Kuwait has a plan to boost its production capacity to 4.75 million bpd by 2040.

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Scott Sheffield, CEO at the largest pure-play shale producer, Pioneer Natural Resources, told the Financial Times on the sidelines of CERAWeek earlier this month, “I think the people that are in charge now are three countries — and they’ll be in charge the next 25 years.” “Saudi first, UAE second, Kuwait third.”

By Bosco Agba

It is estimated that by today, Monday, four out of France’s six refineries will shut down as strikes escalate after French President Emmanuel Macron pushed through with a controversial pension reform without a vote in Parliament.

Earlier last week, the president pushed to pass the reform without a vote in Parliament under a parliamentary clause known as 49:3.
The pension reform proposes to raise the retirement age in France by two years to 64. Macron’s move without a parliamentary vote sparked even more protests and street blockades in Paris and other cities in the country.

The strikes in France against the reform began in February and escalated this month, with workers in many sectors, including refinery workers, joining the industrial action.

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Refinery workers told Argus last Friday that the strikes have disrupted power supply, refining operations, and fuel deliveries for nearly two weeks. 

Now most of France’s refineries are expected be closed down by March 20, also because of a lack of crude deliveries due to strikes among port workers which prevent the discharging of crude cargoes.

Two refineries run by supermajor TotalEnergies, the 219,000 bpd Donges and the 246,900 bpd Gonfreville refineries, as well as ExxonMobil’s 207,100 bpd Port Jerome facility and the 210,000 bpd Lavera refinery of Petroineos are all expected to be shut down by Monday, workers tell Argus.

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In ExxonMobil’s case, it is said that the refinery is stopping operations because it lacks the crude needed to keep the facility running. 
Apart from refining operations, the strikes have disrupted LNG imports into France as LNG import terminals have been shut down. France has four LNG receiving terminals, Dunkirk, Montoir, Fos Cavaou, and Fos Tonkin. 

As the strikes entered their second week, at least seven LNG cargoes heading to France have changed course and are now headed to import terminals in the Netherlands, the UK, and Spain since the strikes started.

By Ken Okoye

The Ghana National Petroleum Authority (NPA) has confirmed that the country has implemented controversial regulatory measures, including the removal of fuel subsidy to ensure stability across its downstream sector.
The Authority said the removal of the subsidy is part of the country’s implemented regulatory measures to ensure stability across its downstream sector.

Chief executive officer of NPA, Mr. Abdul Hamid, dropped the hint during a presentation at the ongoing Africa Refiners and Distributers week 2023, in Cape Town, South Africa.

“We have removed subsidies and deregulated our markets. Industries were shutting down because the government was finding it hard to find the money to provide subsidies and to this day industry is being powered by investments in the private sector and there are no complaints of supply.

“We are ensuring affordability and security for the vulnerable consumers through the removal of energy subsidies,” he said while speaking on more reforms implemented in the NPA,” he said

According to Hamid, “the Ghanaian government has eliminated energy subsidies through the NPA.”
He disclosed the plans were implemented in response to the global oil and gas market volatility caused by the Russian-Ukraine war and energy transition-related policies.

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“For the first time in 30 years, we have installed fuel caps as a measure to intervene and to control market instability,” he disclosed.
Hamid added that the NPA has also created a special fund to assist refineries in boosting Ghana’s production capacity to 50 barrels of oil in order to meet the country’s growing internal demand.

Hamid explained further that the removal of subsidies and deregulation of the markets have led to more investment in the private sector, which has in turn boosted the industry, resulting in a more stable market without supply complaints.

The NPA told the audience that before now the Ghanaian government’s inability to provide subsidies led to industries shutting down.
“These plans were put in place in response to global oil and petrol market volatility caused by the Russian-Ukraine war and energy transition He added that “the NPA is now ensuring affordability and security for vulnerable consumers through the removal of energy subsidies.
“This is part of the reforms implemented by the NPA to improve policies.”

To further justify its actions, the National Petroleum Authority (NPA) called a press conference in Accra yesterday stressing that the subsidy on Residual Fuel Oil [RFO] had become unsustainable because the subsidy on it was affecting its supply.

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It explained that the suspension of the subsidy was to ensure regular supply of the product to the industry, since the high price of fuel and the continuous depreciation of the Cedi against the dollar have made it unsustainable to keep the subsidy on RFO.

The press conference was addressed by the head of economic regulation of NPA, Mr. Abass Ibrahim Tasunti. He said the revenue the country was generating from the Price Stabilization and Recovery Levy had not been enough to pay for the subsidies accruing from RFO and premix fuel.

“The suppliers of this product (RFO) are refusing to supply because the subsidies are not being paid on time. Also, because the subsidies are not being paid on time, the companies have refused to supply the product.

“They sell and they are not recovering the full cost, and they are also not getting the subsidies paid to them,” he said.
The government paid GHc136 million as a subsidy on RFO in 2021 and again paid GHc52 million out of the total subsidy of GHc154 million for the period January to September 2022, leaving a balance of GHC102 million.

He said the NPA had engaged players in the manufacturing sector on the challenge in the supply of RFO and the resolution was that in the meantime, the subsidy on RFO should be removed so that they could pay the full cost to ensure regular supply of the product and get their factories running.

“The industry prefers to pay the full cost of RFO, so they can continue running their factories than not to have their products at all,” Mr. Tasunti said.

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He said the alternative product that the manufacturing industry could use was diesel but the cost of the product was very high now.
When the Price Regulation Policy was introduced in July 2015, the government decided to keep subsidies on RFO and premix fuel.
And to ensure that these subsidies are funded, the Energy Sector Levies Act introduced a levy called the Price Stabilization and Recovery Levy to pay for subsidies on RFO and premix.

Mr. Tasunti said the revenue that would be generated from the Price Stabilization and Recovery Levy would be focused on only premix fuel for now, while the subsidy on RFO would be taken off until things change.

However, the government through the NPA has suspended the subsidy on Residual Fuel Oil (RFO), the fuel used by the manufacturing sector, effective November 1, 2022.

By Ken Okoye

Oil price fell on Wednesday to $72 a barrel for the first time in more than one year. Brent crude, the global oil benchmark, fell over 5% to $72.39 a barrel — first time since December 2021.

The US West Texas Intermediate also fell over 5 percent to $67.06 a barrel. According to Reuters, the price of the commodity dropped as worries about Credit Suisse shook global markets and countered expectations of a recovery in Chinese oil demand.
Credit Suisse shares slumped by 30% on Wednesday after Saudi National Bank (SNB), its largest shareholder, said it could not provide further support.

“It doesn’t matter what your risk asset is, at this point people are pulling the plug on across different instruments here,” Robert Yawger, director of energy futures at Mizuho in New York, told Reuters.

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“Nobody wants to go home with a big position on anything today… you have nowhere to hide really.”
Also speaking on the dip, Dennis Kissler, senior vice-president of trading at BOK Financial, said hedge funds were liquidating due to rising interest rates and economic uncertainty.

He said heavy pressure on the United States stocks earlier today, was adding to the fund liquidation in crude.
The current price of the commodity is now below the $75 benchmark in Nigeria’s 2023 budget. In 2020, when a similar situation occurred, Mrs. Zainab Ahmed, minister of finance, said Nigeria would lower the $57 benchmark.

“What the impact will be on that is that there will be reduced revenue to the budget and it will mean cutting the size of the budget. The quantum of the cut is what we are supposed to assess as a committee,” she had said.

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If Ahmed’s words are to be considered, it means the federal government may consider revising the country’s benchmark to fit the global oil price — if the downward trend is not reversed.

An oil and gas analyst Meristem Securities Ltd, Bolade Agboola, told newsmen yesterday in Lagos that the advantage of the global oil price remaining above Nigeria’s benchmark is that the federal government will earn more revenue to finance its budget.

By Bosco Agba

TotalEnergies’ has said that the $20billion LNG export facility it is handling in Mozambique would not start operations until 2027 at the earliest.

This is not withstanding if the French supermajor quickly lifts the force majeure on the works and proceed with development. While on a visit to the construction site in North Eastern Mozambique, TotalEnergi3es project director, Stephanie Le Galles, told Bloomberg, “From the time we restart to production, we need another four years to build the facility.”

According to her, exports from the plant could start “2027 at the best.”
TotalEnergies suspended works on the project in 2021 following Islamist militant attacks in towns close to the site. The project site is close to the town of Palma in the Cabo Delgado province, where Islamic State-affiliated militants have been active for a few years.

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In the spring of 2021, Islamic State-affiliated militants raided the town of Palma in attacks that left dozens of people killed. TotalEnergies has yet to decide when to resume the project, with several conditions needed for a positive decision, Le Galles said.

Those include the same project costs, an improved security situation, Mozambique government officials returning to the towns of Palma and Mocimboa da Praia, and an assessment of the human rights conditions in the Cabo Delgado province.

Last month, TotalEnergies CEO Patrick Pouyanné visited Cabo Delgado and entrusted Jean-Christophe Rufin, an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in the province.

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Saipem, the Italian engineering group, which is a subcontractor for TotalEnergies in the Mozambique project, expects to “gradually restart” work on the project, “according to the information received by our clients, starting from July this year,” Saipem’s CEO Alessandro Puliti said on an earnings call at the end of February.

While insurgents and attacks have stalled TotalEnergies’ project in Mozambique, Italy’s Eni in November started Mozambique’s first LNG exports from the Coral gas field in the ultra-deep waters of the Rovuma Basin.

By Ken Okoye