Sweetcrude Weekly 23, 2019 by Sweetcrude reports

Oil marketers yet to get N800bn subsidy payment from govt - MOMAN

agos -- The Major Oil Marketers Association of Nigeria, MOMAN, says it is yet to get the N800 billion subsidy payment from the Federal Government, over one month after the government had issued N236 billion promissory note to the marketers as part-

payment of the subsidy debt to the oil marketers. The government had, in issuing the promissor y note midDecember, promised to offset the balance of the debt later. It was a last minute effort to avert the threat of strike by the oil marketers.

Chairman of MOMAN, Mr. Adetunji Oyebanji, told SweetcrudeReports in Lagos that the marketers were yet to receive the money. “There are still issues yet to be resolved with the banks as to how to convert the promissory note into

cash. We expect second tranche of the payment to come in no distant future as promised by the F e d e r a l Government, ” he said. H e disclosed that t h e

government had already told the banks to freeze interest rates on loans to the oil marketers from July 2017 and that reconciliation was ongoing between the government and the marketers to determine the

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

WEEKLY

January 23, 2019

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UU PP D D A A TT EE SS WEEKLY BASKET PRICE JAN-18 JAN-11 JAN-04 DEC-28 DEC-21 DEC-14 DEC-07 NOV-30 NOV-23 NOV-16 NOV-09 NOV-02 OCT-26 Daily | Weekly | Monthly | Yearly

58.95 58.4 53.40 51.34 55.20 59.05 59.95 58.80 62.83 66.52 70.51 74.16 76.37

59.63U$

82 78 74 70 66 62 58 54 50

OCT18

NOV18

DEC18

JAN19

Ogoni clean-up: HYPREP calls for collaboration between contractors, communities

MKPOIKANA UDOMA

ort Harcourt -- The Hydrocarbon Pollution Remediation Project, HYPREP, has called for collaboration between the contractors involved in the clean-up of Ogoniland and the host communities. The call came as the agency handed 16 polluted sites in Ogoniland to contractors for remediation. Out of 21 polluted sites marked for remediation, 16 has been awarded for clean-up while the remaining five sites, according to HYPREP, will be handed over shortly after approval by the Federal Executive Council. Speaking at the hand over ceremony in K-Dere Community, Gokana Local Government Area of Rivers State, HYPREP Coordinator, Dr Mar vin Dekil, called for

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Oil vessel at sea

Nigeria’s Bonny Light, Qua Iboe see highest prices in one year OPEOLUWANI AKINTAYO

agos -- Nigerian crude oil grades, Bonny Light and Qua Iboe, were offered at their highest levels in almost a year last week, loading schedules and reports from traders have shown. Cheaper freight rates and shorter supply of competing grades such as Libya’s light,

sweet crude were cited as reasons behind the rise in prices. Libyan crude was under force majeure due to the closure of the country's Sharara oilfield briefly in December. Also, the Organization of the Petroleum Exporting Countries, OPEC’s, cut deals have reduced Libya's output. Bonny Light and Qua Iboe are Nigeria’s major grades and were

offered as high as $2 a barrel above dated Brent - the highest since March last year. However, traders' reports showed that export of Qua Iboe would likely drop to 215,000 barrels per day, bpd, in March, from 238,000bpd in February. There are still about 15 cargoes left for sale from the February Nigerian programmes, but, most

NERC harps on March deadline for enumeration of electricity consumers …To focus on market liquidity this year

agos -- The Nigerian Electricity Regulator y Commission, NERC, has said the March 2019 deadline electricity distribution companies or Discos in the countr y to conclude the enumeration of customers under their units still stands. According to the commission,

Discos have until March 31 to complete the exercise. NERC had last year ordered all the distribution companies to submit list of customers under their jurisdiction in order to aid the metering exercise, and to allow for easy planning. The ultimatum was contained in a statement by the commission in

November 2018, in which it directed the utility companies to carry out an extensive customer enumeration to determine their actual customer base. According to NERC, customer enumeration will “improve metering” and help Discos

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major grades were said to have been sold, a report by Reuters had said earlier this month. As Nigeria enjoys more sale of its crude grades and at higher prices, the country stands a better chance of meeting up with funding of its N8.83 trillion 2019 national budget. The countr y had set a benchmark of $60 per barrel oil price and a target of between 2.22.3 million barrels per day production in the budget. International oil benchmark, Brent, hovered around $61.98 per barrel while the United States' West Texas Intermediate crude sold at $52.91 per barrel and OPEC’s daily basket price was at $59.63 per barrel last week. Oil industry watchers differed on the prospect of oil prices this year, with some projecting that

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SWEETCRUDE WEEKLY, 23 JANUARY, 2019

Nigeria’s Bonny Light, Qua Iboe see highest prices in one year

Oil

Average price of diesel up by 0.92% in December - NBS L

agos -- The National Bureau of Statistics, NBS, says average price paid by consumers for automotive gas oil, also known as diesel, increased by 0.92% month-on-month to N221.56 in December 2018 from N219.54 in November 2018. The NBS stated in its newlyreleased statistics that states with the highest average price for the product were Anambra with N239.41, Ebonyi (N239) and Sokoto (N236) while those with the lowest average price were Bayelsa (N200), Bauchi (N207.50) and Plateau (N209). On the other hand, the bureau said average price per litre paid

by consumers for kerosene decreased by 2.54% month-onmonth and increased by 0.04% year-on-year to N290.74 in December 2018 from N298.32 in November 2018. States with the highest average price per litre were Abuja (N355.56), Imo (N332.46) and Enugu (N330.45), NBS said, as it listed states with the lowest average price as Lagos (N260.78), Taraba (N257.69) and Niger (N257.50). Similarly, according to the agency, the average price per

Diesel dispenser gallon paid by consumers for kerosene increased by 0.98% month-on-month and 8.72% yearon-year to N1156.41 in December 2018 from N1145.21 in November 2018. While states with the highest average price per gallon of the product were Jigawa (N1342.86), Ekiti (N1377.37) and Zamfara (N1294.44), those with the lowest average price per gallon were Rivers (N1015.63), Niger (N995) and Bayelsa (N991.67).

Gas

Underwater pipeline

Israel-Egypt underwater pipeline for construction next year

ews Wires -- Israel's plan to build an under water natural gas pipeline to Egypt as part of efforts to transform the eastern Mediterranean into an energy export hub on Europe’s doorstep could commence next year. The pipeline will transport gas

from Israel’s offshore Leviathan and Tamar fields to Egypt’s existing liquefied natural gas plants for processing and reexport. Israeli Energy Minister Yuval Steinitz, who disclosed that construction could begin as early as next year, said the new line

would allow Israel to export much more to Egypt than the maximum 7 billion cubic metres per year that can flow through the existing EMG pipeline connecting southern Israel to Egypt’s Sinai peninsula. “There’s no final decision yet, but there are talks,” Steinitz was quoted by Bloomberg as saying in an interview in Cairo, where he took part in the first East Mediterranean Gas Forum. The event was aimed at boosting cooperation among the region’s nascent gas producers, consumers and transit countries. The next meeting will take place in April. Oil ministers from Egypt, Israel, Greece, Cyprus, Jordan, Italy and the Palestinian Authority joined the gathering, where they agreed to work together to monetise reser ves by using existing infrastructure and adding more capacity.

Power

CONTINUED FROM PAGE 01 prices would average $70 per barrel and others saying prices would be below the figure. Multinational banking and financial services companies, United States' Morgan Stanley and Britain's Standard Chartered voted for $78 per barrel price. Citibank went for the lower end - $59.50 per barrel. Oil analysts, including banks, surveyed by Bloomberg reckoned on a rebound in prices as fears of a recession prove misplaced. The Brent crude will average $70 a barrel in the year, almost a third higher than its price towards the last week of December 2018, the Bloomberg survey of oil analysts showed. According to Reuters poll, however, crude oil prices look likely to trade below $70 per barrel in the year as oversupply and faltering growth weigh on prices. Specifically, it said, surplus production, much of it from the United States, and slowing economic growth are expected to undermine OPEC-led efforts to shore up the market. The Reuters' survey of 32 economists and analysts forecast the Brent crude will average $69.13 per barrel in 2019.

Oil marketers yet to get N800bn subsidy payment from govt - MOMAN CONTINUED FROM PAGE 01 real amount to be paid. “We are currently negotiating with the government. We are also reconciling the forex rates as at when the loan was taken to determine what to pay. Nobody can say the exact amount the Federal Government will eventually pay, however, we are hopeful our members will get the money soon and be able to pay their debts (to the banks),” he said. Members of MOMAN include Conoil Plc; 11 Plc, formerly Mobil Oil Nigeria; Forte Oil Plc; MRS Oil Nigeria Plc; OVH Energy Marketing Limited, an Oando licensee; and Total Nigeria Plc.

Ogoni clean-up: HYPREP calls for collaboration between contractors, communities CONTINUED FROM PAGE 01 collaboration between the contractors and the communities. Dekil also explained why HYPREP had to award contract for remediation without setting up the integrated soil management centre as recommended by the United Nations Environment Programme, UNEP. He said: "I am aware that some people are saying that we are handing over sites for remediation without the integrated Soil Management Centre, as recommended by UNEP. "These sites handed over to contractors are less complex sites and do not require an Integrated soil management centre before they can be remediated." Dekil also urged the impacted communities to collaborate with the contractors for smooth remediation of the impacted sites, while appealing to those against the exercise to have a change of mind. He assured that the provision of potable water, livelihood training and the setting up of the integrated soil management centre will take off simultaneously with the clean-up exercise. "If you prevent HYPREP from cleaning up your communities, HYPREP will take the resources and go to another community. "If there are few people who feel the clean-up exercise should not happen, for their own selfish reasons, we will not be joining issues with them because there are isolated issues that do not reflect the broad view of the Ogoni people who overwhelmingly want this clean-up to take place," he added.

Nigeria: National grid records improvement in frequency fluctuation L

MICHAEL JAMES

agos -- Nigeria's national grid has achieved frequency control of between 49.80Hz and 50.20Hz for 64.47% of the time and frequency control between 49.75Hz and 50.25Hz for 85.55% between December 27, 2018 and January 12, 2019. The frequency control is the best ever achieved in the history of Nigeria and is also the best in West Africa as at today, according to the Transmission Company of

Nigeria, TCN. TCN said, in a statement, that the frequency control achieved from January 8-12, 2019, was the best so far by any power utility in West Africa. The management of TCN decided to further stabilise the frequency after the workshop on frequency control organised by the West African Power Pool, WAPP, in Nigeria from December 17-19, 2018. The Nigerian Grid Code

Frequency Standard is 49.75Hz and 50.25Hz while the WAPP frequency standard is 49.80Hz and 50.20Hz. Currently West African Power Pool operates three islands due to poor frequency control. To ensure the entire region is synchronised into one, the executive board of WAPP obtained grant from the World Bank to support the effort. The workshop which took place in Nigeria recently, is one of the

Power sub-station s e r i e s o f s u c h Wo r k s h o p s supported by the World Bank. The World Bank grant will also

procure some specialised equipment to be installed in various international interface points.

SWEETCRUDE WEEKLY, 23 JANUARY, 2019

Power

ECOWAS approves WAPP 2018 master plan L

agos -- The meeting of the heads of states and government of the Economic Community of West African States, ECOWAS, has approved the West African Power Pool, WAPP, 2018 Transmission and Generation Master Plan. The WAPP 2018 Master Plan is expected to provide 330kV line from Nigeria to Senegal and will enable grid connection between WAPP and Central Africa Power Pool on the one hand and North Africa Power Pool on the other hand. The WAPP 2018 Master Plan includes the Eastern Transmission Backbone which will put in place 330kV double circuit transmission lines and

substations from Calabar-IkomOgoja-Kashimbila-Jalingo-YolaHong-Biu-Damaturu-PotiskumAzare-Dutse and terminate in Jogana (Kano). As part of WAPP priority, the Eastern backbone will attract more concessionary funding from multinational resources of donor agencies. The Median Transmission Backbone, which comprises 330kV DC line from ShiroroZ u n g e r u - K a i n j i - Pa r a ku o t o Northern Ghana and finally end in Cote D’ ivoire, is also part of the approved master plan. It was learnt that the frequency control collectively achieved with the active support of generation companies needed to be

sustained as it would assist significantly in further stabilising the grid to meet the need of electricity customers in Nigeria. As the frequency becomes more stable, more electricity customers who are hitherto outside will seek to be connected.

NERC harps on March deadline for enumeration of electricity consumers CONTINUED FROM PAGE 01 “respond to electricity issues quickly”.

M e a n w h i l e , t h e commission said its primary focus this year would be on improving market liquidity and funding of the revenue gap and accumulated tariff deficits in the books of the

electricity distribution companies. The commission revealed this in a communique issued at the end of its 2nd meeting with the Nigerian Electricity Supply Industry, NESI, stakeholders held recently in Lagos. It reiterated the urgency to close metering gap and highlighted the strategies put in place for accelerated metering of end-use customers under the Meter Asset Provider, MAP, regulations. Other key initiatives planned for 2019 include the completion of the ongoing enumeration of customers, promotion of embedded generation and creation of new investment opportunities through distribution franchising.

Finance thgierF

Active energy-focused funds fall by 98 in 2018 …Oil & gas funds down by 15

OPEOLUWANI AKINTAYO

agos -- The umber of active energy-focused funds fell by 98 last year, statistics from

industry tracker Eurekahedge Global Hedge Fund database have shown. The statistics showed the

number fell to 738 in 2018 through September, from about 836 in 2016. As a result, energy fund managers swam in huge losses last year after they staked wrongway bets on the prices of oil and natural gas, leading to a wave of closures in the already tensed fund sector. Eurekahedge houses 12,336

North American funds, 4,077 Asian funds, 11,859 European funds, 845 Latin American funds, and 4,037 emerging market funds. A breakdown showed that the oil and gas sector lost 15 funds. The sector’s funds tumbled to 179 in 2018 from 194 in 2016. Funds that have suspended operations included high-profile names such as Jamison Capital’s

Seplat extends closed period on Stock Exchange to March 1

agos -- Seplat Petroleum Development Company Plc has extended its closed period on the Nigerian Stock Exchange, NSE, by a day. The notice, contained in a memo to the NSE, was signed by

the company’s Secretary, Dr. Mirian Kene Kachikwu. According to the memo, the extra day is pursuant to Clause 17.2 of the Amendments to the Listings Rules of the NSE, and in the run-up to the

Solid Minerals

announcement of Seplat’s audited financial statement for the period ended December 31, 2018. Seplat Plc had on 27 December 2018 announced the commencement of a closed p e r i o d f r o m M o n d a y, 3 1 December 2018 to Thursday, 28

February 2019. However, the company said following the scheduling of a meeting of its board of directors for 28 February 2019, the closed period is consequently extended to twenty-four hours after the audited financial statement has been released to the public.

macro fund, T. Boone Pickens’ BP Capital and Andy Hall’s main hedge fund at Astenbeck Capital Management, along with smaller niche funds such as Casement Capital. Funding in the sector is now volatile, and according to founder of Casement Capital, “there is a massive decline in the number of funds, and no replacements”. “There has been a near ‘extinction event’ in commodities hedge funds”. “We had about 16 large hedge funds trading natural gas in Houston a few years ago,” he said. “That number is now reduced to a small number of managers,” the report said, according to Reuters.

11 firms bid for Ajaokuta Steel ...Govt prefers Nigerian bidders, says Minister

agos -- The Minister of State for Mines and Steel Development, Abubakar Bwari, has revealed that 11 companies have shown interest to operate the Ajaokuta Steel Company, but, said the Federal Government would prefer the winner to be a Nigerian firm with both financial and technical capability. The minister disclosed this in a statement giving a three-year

account of the performance of the ministry from 2016 to 2018. According to him, the government was not ready to hand over Ajaokuta now, as all infrastructure required for its takeoff, such as rail line as well as dredging of Lokoja and Warri ports were yet to be completed. Ajaokuta Steel had become a source of controversy in recent times, with an Indian company,

Global Steel Holding Limited, o w n e d b y Pr a m o d M i t t a l , claiming control over it on the ground that it allegedly has an existing contract on the plant. At a time, reports said the Federal Government was likely to concession the company to its original Russian builders. “The policy of the government is that it will not release Ajaokuta Steel just like that. What we are

Ajaokuta Steel plant planning to do is to regulate and create enabling environment for

the company to strive”, the minister said.

SWEETCRUDE WEEKLY, 23 JANUARY, 2019

Freight

32% of offshore vessels laid up globally

Offshore vessels

agos -- A recent report by V e s s e l Va l u e , a n intelligence service provider for the maritime and offshore

sectors, says 32% of global offshore vessels are laid up. The report, which explained that "vessels that have not

signalled for over a week are considered to be in layup", said: "It is no secret that the offshore sector is suffering. "Through obser ving the figures, we can see that some areas are experiencing more layup that others. The worst of the market seems to be in South East Asia (SEA), where layup is at more than 36% in each subtype. "More unexpectedly though, the US Gulf is closely following SEA in terms of layup consistency". It added that the Middle East and West Africa regions were in a similar state and that "least surprisingly, North West Europe remains the leading region globally". The report maintained that "sentiment may change but the figures are what matters and will truly determine the speed and likelihood of a full offshore market recovery".

NNPC seeks collaboration to end cross-border smuggling of petrol IKE AMOS

he Nigerian National Petroleum Corporation, NNPC, Sunday, called for increased collaboration with members of the African Union of Transportation and Logistics Organization to address the rising incidents of cross-border leakages of petroleum products. In a statement in Abuja, Group Managing Director of the NNPC, Mr. Maikanti Baru, said smuggling of petroleum products remained a blight in the nation’s fuel supply and distribution matrix. Baru, who stated this while receiving a delegation of the group led by its President, Mr. Mustapha Chaeun, at the NNPC Towers, noted that the collaboration would not only help to stop the menace but would help rid the West African corridor of other vices that are associated with the illicit fuel smuggling business. Baru also charged the regional transportation union to ensure that its members comply with extant laws and regulations on speed limits, the axial weight of haulage tankers and other sundry regulations necessary to ensure the safety of high ways across the African terrain. He said the NNPC was open to new areas of mutual collaboration with the organization while calling on transportation union members to take full advantage of NNPC’s vast business portfolio and strategic position in the West African sub-region and beyond to expand business interest and areas of cooperation. On his part, Chaeun pledged the readiness of its members to comply with extant laws and regulations in countries where they

N/Delta University to partner NCDMB on research and development P

ort Harcourt -- The Niger Delta University, NDU, in Bayelsa State, has sought for closer collaboration with the Nigerian Content Development and Monitoring Board, NCDMB, particularly in research and development. The Vice Chancellor of the university, Prof. Samuel Edonmiekumo, made the request when he visited the E xe c u t i v e S e c r e t a r y o f NCDMB, Engr. Simbi Wabote, at the board’s corporate headquarters in Yenagoa, Bayelsa State. The vice chancellor enumerated the research interests of the university and expertise which could form

the basis of strong partnership between the two institutions. Edonmiekumo also called on the board to always consider and give priority to NDU in all NCDMB programmes, particularly in research and development. "We commend the board for various capacity development inter ventions you have initiated in our university, including the donation of Econometric Centre, staff capacity building, among other support. "Part of the reason for the visit is to remind the board that since NDU was selected by the board as one of the Centres of Excellence for Research, the

Community

partnership was yet to be activated," he said. Responding, Engr. Wabote clarified that the Centre of E xc e l l e n c e p r o g r a m m e strategy was currently being fine-tuned by the board and that as soon as the roadmap was clearly articulated, it would commence in earnest. Wabote assured the NDU team that NCDMB would always give preference to the university as requested, and also promised to visit the school to see the state of affairs for himself and determine possible areas of collaboration. Research equipment

IYC urges govt to investigate local firms over Local Content violations

ort Harcourt -- The Ijaw Yo u t h C o u n c i l , I Y C , Worldwide has called on the Federal Government, through the Ministr y of Petroleum Resources, to investigate the activities of indigenous oil firms in the country over their noncompliance with the Local Content Law. President of IYC, Mr. Eric Omare, in a statement, said non-compliance by indigenous

EDITOR Chuks ISIWU

Welder at work

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oil firms operating in the Niger Delta region with the Nigerian Content law had relegated the region, entrepreneurs and contractors as well as impoverished the people of the host communities. Omare, who noted that the law was binding on all operators in the oil and gas industry, said the law, passed in 2010, had not seen an improvement in the situation in the Niger Delta in

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any ramification. He lamented that the poverty level in the oil and gas producing communities had increased exponentially, saying: "The indigenous owners of the divested assets, apart from acquiring the oil fields, have incorporated multitude of companies with which they execute nearly all contracts in the value chain of their operations.

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