Category: Nigeria

Plans by Nigeria, Africa’s biggest oil producer, to review offshore production contracts signed with international oil companies two decades ago, have added to uncertainty in an industry already lacking regulatory clarity, said analysts including Philippe de Pontet of Eurasia Group. The objective is to increase Nigeria’s earnings from the fields, according to Emmanuel Kachikwu, group managing director of the Nigerian National Petroleum Corp. Yet, declining crude oil prices take away some of the incentive for investments that would’ve given the government more leverage in negotiations. “With Brent below $50 a barrel, the timing is not ripe for big contract negotiations.,” de Pontet said. “If the administration is not careful its agitation for contract review could prove counterproductive at a time when the oil sector is already stagnant at best.” Nigeria depends on crude exports for two-thirds of government revenue and more than 90 percent of export earnings. NNPC, as […]

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Former Minister of Petroleum Diezani Allison-Madueke. Photo: Premium Times An enterprise resource solution for accountability in the Nigerian National Petroleum Corporation, NNPC’s business processes, turned a spin project for crooked top officials to steal billions, a report reveals. The project, which had 86 weeks completion time-line, has dragged for more than three years, after gulping almost double the contract sum originally approved by the Nigerian presidency, with nothing to show. The resource solution is called SAP Enterprise Resources Planning (ERP). It is an electronic management solution deployed by most global organisations to monitor real-time operations of a network of subsidiaries and affiliates irrespective of their locations. All-in-one solution The solution is an all-in-one package, comprising different modules for standard business, financial, contracts management and personnel information, data and processes in the business value chain. The automated tool is usually deployed once and run globally through an integrated network that […]

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Former Minister of Petroleum Diezani Allison-Madueke. Photo: Premium Times The Westminster Magistrate’s Court on Marylebone Road, London, on Monday granted an application for seizure of 27,000 pounds seized from a former Minister of Petroleum Resources, Diezani Alison-Madueke. Mrs. Alison-Madueke was arrested and later released on bail on Friday for alleged corruption-related offences. The cash was seized under Section 295 of Proceeds of Crime Act 2012. By granting the application, which was filed by the UK’s National Crime Agency, the money would be held in the custody of the court until April 5, 2016. PREMIUM TIMES gathered that although the former minister did not appear today in court, her mother, Beatrice Agama, and another woman, Melanie Spencer, appeared in today’s sitting. Reports also said a separate application was also made against Ms. Agama for the seizure of an undisclosed amount of money. PREMIUM TIMES learned that there were indications the […]

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Shell starts third phase of operations at deepwater prospect off the coast of Nigeria. Photo courtesy of Royal Dutch Shell ABUJA, Nigeria, Oct. 5 (UPI) — Royal Dutch Shell said it started operations at the third phase of operations in the deep waters off the coast of OPEC-member Nigeria. Shell said its Nigerian exploration and production company started production at the third phase of the offshore Bonga prospect . "This new start-up is another important milestone for Bonga, adding valuable new production to this major facility," upstream director Andrew Brown said in a statement. Shell last year started oil production from the deepwater Bonga North West development off the coast of Nigeria. At its peak, the company said the third phase of operations offshore Nigeria should be around 50,000 barrels of oil equivalent. Nigeria was among the member states contributing most to the production from Organization of Petroleum Exporting […]

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There were indications, yesterday, that a former Petroleum Minister, Diezani Allison-Madueke, arrested and released in the United Kingdom, on Friday, on money laundering allegations, may be charged to court, this week. And feelers showed that she will not be the only person in the dock. Sunday Vanguard learnt that besides the four other persons arrested with the former minister, more suspects may also be arraigned. Meanwhile, Economic and Financial Crimes Commission (EFCC) detectives, who raided the Abuja home of Allison-Madueke, just at about the time of her arrest in the UK, on Friday, reportedly recovered cash running into millions of Naira. The trial is expected to be conducted in London and is likely to draw thousands of Nigerians resident in the United Kingdom (UK) but no date was specified, last night, when Sunday Vanguard made contacts with the National Crime Agency (NCA), which arrested and released Diezani and the […]

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By George Agba, Kunle Olasanmi, Reuben Buhari, Chika Otuchikere Hours after the immediate past Minister of Petroleum Resources, Diezani Alison-Madueke was arrested by the United Kingdom National Crime Agency, and her residences in Abuja and Lagos simultaneously raided by the Economic and Financial Crimes Commission (EFCC), the Federal Government has started mulling the idea of having her extradited back to Nigeria. Diezani was arrested yesterday alongside four other people on offences related to bribery, corruption and money laundering. Even though the names of the other four couldn’t be ascertained, but just after the arrest of Diezani in London, EFCC operatives who stormed her home in Abuja also stormed the home of one Jide Omokore, a business friend of hers while she held sway as oil minister. There were reports that Omokore’s 9 Turnbull Street home in Ikoyi, was raided by EFCC operatives. His office on Glover Street, also in […]

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There are indications that Nigeria’s crude oil exports may fall by about 10 per cent in November, as loading were assessed to be on the lower scale. Indeed, loading programmes continued to emerge on Monday, with exports on track to fall from October’s high. The provisional loading programmes showed that Nigeria plans to export a total of 56.66 million barrels of oil, or 1.89 million barrels per day (bpd) of crude oil in November, which is a decline from the 63.1 million barrels, or 2.04 million bpd, planned initially for October loading. On a per-day basis, the November programme is on track to be the lowest since July, according to available data. Traders said the November loading programme was on track to show a decline from the yearly high hit in October, but trading was limited as the market processed the new offers. Few trades surfaced as the market […]

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The oil refinery in Warri, Nigeria, is roaring back to life after years of neglect. WARRI, Nigeria—Newly elected Nigerian President Muhammadu Buhari’s plans to overhaul the world’s most populous petrostate include pushing people like Bombo Okpe out of the oil business. Mr. Buhari recently dispatched soldiers to torch the rusted oil drums and steel piping Mr. Okpe had rigged to refine stolen crude into gasoline and kerosene in a mangrove swamp here. Mr. Okpe says he is too afraid to rebuild. The president’s move marks a major reversal in a country where thieves used to set fire to government refineries and build their own from spare parts. Now Mr. Okpe’s operation is in ashes, while a few miles away engineers are revving up a refinery that hasn’t worked properly in years. “They see light at the end of the tunnel,” said Hippolite Amadi, an executive director at Warri’s troubled […]

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There has been a steady surge in fuel importation to Nigeria with more inflows expected from Europe in the months to come. Trading sources told Platts, a global energy information website, at the weekend that one of the main reasons for the strong demand has been the increased buying interest from Nigeria. The country has four refineries which could reduce petroleum products importation by up to 50 per cent but the refineries have struggled to remain afloat and have been unable to churn out products in appreciable quantities since the Nigeria National Petroleum Corporation (NNPC) announced they were back. For instance, the 37-year-old Warri refinery has remained shut since August due to some technical hitches in one of its units. The NNPC Group Managing Director, Dr Ibe Kachikwu gave a 90 days ultimatum to the refineries to stream back to full active service or be sold. There are plans […]

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Nigeria gets financial support for onshore and offshore oil and gas exploration campaigns from Chevron subsidiary. File photo by A.J. Sisco/UPI LONDON, Sept. 21 (UPI) — Nigeria’s national oil company said it secured more than $1 billion in financing for onshore and offshore drilling operations from a Chevron subsidiary. An agreement signed during the weekend in London envisions $1.2 billion for the development for 23 onshore and 13 offshore wells in Nigeria. The Nigerian National Petroleum Corp. said the funding is an integral part of an exploration and production financing program meant to address "the perennial challenge" on the part of the government’s support for upstream activities. The company said the projects could combine for between $2 billion and $5 billion in revenue for the federal government. Stage one, consisting of 19 wells, could deliver up to 21,000 barrels of oil and 120 million cubic feet of natural gas […]

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IBADAN, Nigeria–The state-run Nigerian National Petroleum Corporation has secured $1.2 billion to drill wells offshore and onshore under a joint venture with Chevron Nigeria, the NNPC said Sunday. Nigeria has been criticized for failing to meet obligations to its oil JV partners, which has affected efforts to reach production targets of over 4 million barrels a day and reserves to 40 billion barrels. The $1.2 billion package will finance the development of 23 onshore and 13 offshore wells. The NNPC/CNL Joint Venture is the third largest oil producer in Nigeria, the statement said. Nigeria, Africa’s largest oil producer, relies on crude exports for over 90% of its foreign exchange earnings and 70% of government revenue, according to the International Monetary Fund.

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IBADAN, Nigeria–Nigeria will seek to renegotiate the fiscal terms of existing production-sharing contracts with some international oil and gas companies to seek more favorable terms, the new head of the Nigerian National Petroleum Corp. said. “In the weeks and months ahead, the corporation will be renegotiating the contracts to extract as much benefits as possible for Nigeria,” said NNPC chief Ibe Kachikwu, according to a statement. Speaking in Paris ahead of the state visit of Nigerian President Muhammadu Buhari, Kachikwu said: “The NNPC is allowed to make use of the window which creates space for renegotiation.” The major African oil exporter is facing hefty budget pressures after international oil prices plunged and as the Buhari administration looks for funds to execute an ambitious reform program. The new government had been expected to seek to renegotiate some contracts. Since assuming office in May, Buhari has sought to overhaul the NNPC […]

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Investors hoping that Nigeria’s central bank Governor Godwin Emefiele will succumb to pressure to devalue the naira weren’t aware of one crucial factor: he has the backing of President Muhammadu Buhari. In his first public comments on the currency since taking office in May, Buhari, 72, said on Wednesday he opposes a weakening of the currency. His stance endorses Emefiele’s policy of restricting foreign-exchange trading to stabilize the naira despite a plunge in oil revenue in Africa’s biggest crude producer. It also raises questions about the central bank’s independence and puts the two men at odds with foreign investors, local businesses and some members of the Monetary Policy Committee who say the naira is overvalued, deterring capital inflows and hindering economic growth. “There appears to be some unwritten agreement between the presidency and the central bank that the naira will not be devalued, in spite of the deteriorating fundamentals,” […]

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Nigerian states have drawn from a 300-billion naira ($1.5 billion) emergency fund at the central bank and are asking for more money as they struggle to pay civil service salaries after the oil-price slump. Eighteen states have tapped the intervention fund and more requests are being processed, Central Bank of Nigeria Governor Godwin Emefiele said in a statement e-mailed by the presidency on Thursday. Debts worth a total of 574 billion naira have been restructured for 23 states since August, it said. At least half of Nigeria’s 36 states, which rely on monthly federal handouts for the majority of their funding, have been unable to pay bureaucrats’ wages after Brent crude prices fell by half in the past year. Nigeria is Africa’s largest oil producer.

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* Oil price plunge hits Nigerian revenues, currency * Central bank rations dollars to hold naira peg * Yields on some Nigerian Eurobonds near record * Loans, dividends may be more problematic than bonds By Alexis Akwagyiram and Karin Strohecker LAGOS/LONDON, Sept 16 (Reuters) – Already feeling the pinch from slumping oil prices and slowing economic growth, Nigerian companies are finding it increasingly hard to get hold of foreign currency due to central bank restrictions and may struggle to repay their debts. Yields on a number of dollar corporate bonds have risen close to record highs this week, reflecting investors’ anxiety despite an assertion by Nigeria’s richest businessman that no borrower will default due to the currency shortage. Since 2007, Nigerian financial and energy firms such as FBN Holdings and Seven Energy have issued more than $5 billion of dollar-denominated debt on international capital markets, including almost $3 billion […]

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PREMIUM TIMES has uncovered one of the most fraudulent crude oil deals carried out by the administration of Goodluck Jonathan, which saw cronies of the president pocket billions of naira through a domestic crude oil transportation contract that violated Nigeria’s procurement and economic regulations. Our estimates indicate that the contracts, which the Nigerian National Petroleum Corporation has now admitted were unnecessarily exorbitant and inappropriately awarded, cost Nigeria N509.3 billion. How much service the companies offered to pocket that amount remains unclear even to the state oil company, insiders say. The deal, later disguised as security contract and channeled through the Nigerian National Petroleum Corporation, saw two companies belonging to Idahosa Okunbor and Tunde Ayeni, illegally rack up billions of naira to purportedly transport crude oil from Escravos to Warri refinery, and Bonny Island to Port Harcourt refinery, by ship, since 2011. The deal involved the transportation of five millions […]

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Esso Exploration & Production Nigeria Ltd. , a subsidiary of ExxonMobil Corp., has started oil production ahead of schedule at the Erha North Phase 2 project 60 miles offshore Nigeria ( OGJ Online, June 23, 2015 ). The deepwater subsea development lies in 3,300 ft of water and 4 miles north of Erha field, which has been producing since 2006 ( OGJ Online, May 2, 2006 ). The project includes seven wells from three drill centers tied back to the existing Erha North floating production, storage, and offloading vessel, reducing additional infrastructure requirements. Phase 2 is estimated to develop an additional 165 million bbl from the currently producing Erha North field. Peak production from the expansion is estimated at 65,000 bo/d, increasing total field production to 90,000 b/d. ExxonMobil expects to increase its global production volumes this year by 2% to 4.1 million boe/d, driven by 7% liquids growth. […]

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(file photo). Photo: Premium Times The Nigerian National Petroleum Corporation (NNPC) has finally bowed to the pressure mounted by the International Association of Independent Tanker Owners (INTERTANKO) and lifted a ban on 113 foreign vessels, mostly very large crude carriers (VLCCs) into Nigeria’s territorial waters less than two months after the ban was imposed. Acting on the directive of President Muhammadu Buhari, NNPC imposed the ban shortly after Buhari assumed office over concerns that most of the tankers were complicit in incidents of crude oil theft from Nigerian oil terminals. INTERTANKO, whose members were mostly affected by the ban of the 113 vessels, is one of the largest groups in the shipping industry with 207 full members and 285 associate members, and a registered fleet of over 3,000 tankers of over 270 million DWT (deadweight). In his capacity as the then Group General Manager of NNPC in charge of […]

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An oil pipeline in Nigeria. Growth in the Nigerian economy, Africa’s largest, slowed in the second quarter due to the slump in oil prices, the country’s statistics office said. Gross domestic product expanded 2.35 percent on an annual basis, compared with 3.96 percent a quarter earlier, the head of the National Bureau of Statistics, Yemi Kale, said on his Twitter account on Tuesday. The oil industry contracted 6.8 percent, Kale said. “This is not a good result for Nigeria,” Alan Cameron, a London-based economist at Exotix Partners LLP, said in e-mailed comments. “Moreover, with policy rates stuck at high levels, and fiscal policy being tightened automatically through lower statutory oil disbursements, it is hard to see any catalyst for improvement.” The central bank raised its key interest rate to a record high of 13 percent in November, since when inflation has accelerated beyond the bank’s target band of 6 […]

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Warri and Port Harcourt — Barely two weeks after it resumed operation, the Warri Refining and Petrochemical Company (WRPC) has been shut down. The development is coming on the heels of public excitement that followed news of the nation’s moribund refineries kicking back to life. The Guardian learnt that the refinery was shut down few days ago, as crude oil stored in its receptors ran out. "It goes to show the rot that has been embedded in the system over the years. Now that you have a Buhari government in place, everybody is running helter-skelter to do the needful and in the process they have forgotten to do proper planning. And as they say, when you fail to plan, you plan to fail. "Right now, you have a situation where everybody is in a hurry to do the right thing and they forget that you have to follow a […]

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editorial The lingering decline in crude oil prices, which has greatly affected Nigeria’s revenue from crude oil exports, has taken another dimension in recent months. About 35 million barrels of the country’s crude oil remained unsold at the international market as at December 2014. Sales have been low this year as the fortunes of August and September deliveries remain uncertain, even as oil prices continue to hover on the lower band of $50 a barrel. As it stands, the nation is on a financial cliff and can fall off except a miracle happens. The one commodity that provides life support for the economy has not only seen its price at the international market fall to as low as $48 per barrel, the volume sold is shrinking as well. There is no sign that things will get better soon. The International Energy Agency (IEA) has even predicted that crude oil […]

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Current data on refineries production in Nigeria indicate that more heavy or fuel oils (low and high fuel oil/black oil) are being produced from the four refineries than other high demand products like premium motor spirit, PMS, otherwise known as petrol. The revelation comes despite assurances by the Nigerian National Petroleum Corporation, NNPC, which said last week that two of its refineries were working between 60 and 80 percent of their installed capacities. NNPC had promised that the four refineries would be re-streamed by July end, when the turn around maintenance, TAM, of the hitherto almost comatose refineries would have been rounding up, thus, buoying high hopes for imminent relief from products scarcity in the country. Capacity utilisation However, status of the refineries operations as at July 31, 2015, exclusively obtained by Sweetcrude, indicate that the refineries cannot still meet the daily consumption requirement of between 40 and 42 […]

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The nation’s crude oil exploration and production activities may have hit a record low, going by the latest report from the Nigerian National Petroleum Corporation (NNPC). Specifically, only Shell Petroleum Development Company (SPDC) and Addax carried out exploration/drilling activities during the month of March, according to available data from NNPC’s monthly report obtained by The Guardian yesterday. The country has been recording low production activities since November last year, as several oil and gas firms began scaling down production due to the uncertainties surrounding the Petroleum Industry Bill (PIB) and the declining crude oil prices. Many oil and gas firms have also been recording losses, which made them to resort to cancelling or deferring projects. According to OPEC in its monthly oil market report, among member countries, Nigeria recorded the second sharpest drop in rig counts in March with production of 1.69mbpd in the month compare to the 2.21mbpd […]

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Nigerian President Muhammadu Buhari. Photographer: Brendan Smialowski/AFP/Getty Images As oil minister during military rule in the 1970s, Muhammadu Buhari oversaw the birth of the Nigerian National Petroleum Corp. Now, as democratically elected president, he intends to break up the opaque bureaucracy, which manages the oil assets of Africa’s biggest crude producer, to ensure taxpayers get their fair share. History isn’t on his side. “No Nigerian leader, including Buhari himself from the 1980s, has managed to sanitize the oil sector,” said Philippe de Pontet, head of the Africa practice at the Eurasia Group in New York. “Buhari’s challenge is not only to depoliticize NNPC but to disentangle its vested interests and its rogue commercial operations, which won’t be easy.” For all its importance to Nigeria, the NNPC is largely inscrutable Buhari made cleaning up the 24,000-employee colossus — the largest government-owned company — a key plank in the election campaign […]

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Nigeria must urgently reform the way it sells oil to prevent Africa’s biggest crude producer losing billions of dollars of revenue, according to a new report. The approach of the national oil company, Nigerian National Petroleum Corp., “suffers from high corruption risks and fails to maximize returns for the nation,” the New York-based National Resource Governance Institute said in a 73-page report published on Tuesday. The NNPC should end the practice of allocating about 445,000 barrels of oil a day to Nigeria’s four domestic refineries, which process less than a quarter of that total. The allocation has become the “main nexus of waste and revenue loss from NNPC oil sales,” according to the report. Nigeria’s President Muhammadu Buhari said last month the U.S. will help trace and recover funds from the sale of about 250,000 barrels of oil that are stolen each day in the country. The oil industry, […]

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Nigerian would have been buoyant enough to finance its 2015 budget of N4.36 trillion and still pay off its external debts of N2.03 trillion if it had not lost more than that amount — $32 billion (N6.4 trillion at N200/$1) — to massive corruption that characterized oil sales by the Nigerian National Petroleum Corporation during the last administration, a new report has said. An independent investigative analysis by the Natural Resource Governance Institute (NRGI) has revealed that over $32 billion oil revenue was lost to NNPC’s mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements. The report offered a deep, independent analysis of how NNPC sells its oil, and found that the national oil company’s discretionary spending from domestic crude oil sale revenues has skyrocketed, exceeding $6 billion a year for the 2011 to 2013 period (i.e. over $18 billion in three years). […]

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Ughelli — The two suspects arrested by security agents in connection with the explosion that rocked an oil pipeline belonging to the Nigeria Petroleum Development Company, NPDC at Ighwrenene community, Ughelli North Local Government Area of Delta State, have stated that they blew up the pipeline in a bid to coax NPDC into awarding them a pipeline surveillance contract. The suspects identified as Dennis Oneya aka ‘General Touch’ and Emmanuel Joseph aka Ajegunle, both of Uduere and Afiesere communities respectively, told newsmen at the 222 Battalion headquarters, Agbarha-Otor that they embarked on the mission having being promised job slots by their sponsors when awarded the contract. Speaking on their modus operandi, while Dennis Oneya admitted digging the spot on the pipeline to be bombed in company of others, Emmanuel Joseph described himself as an expert in handling of dynamites used in the explosion as well as other similar blasts. […]

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Rampant stealing of petrol, mostly from along the pipes conveying it, costs Nigeria huge losses in financial terms and in impact on the environment Okon Mbom (not his real name) wakes up 4.00am every morning from his house in Ibuluya, Okrika local government area of Rivers State with one thing in mind: nothing and no one will come between him and his take-home package every sunset when he is relieved. Okon receives N10,000 every day from stern looking operatives of an oil pipeline in the deep forest. Okon of course had discovered with time that his paymasters were not government officials. Sometime last year when he was engaged, he was given strict instructions to shoot any stranger at sight. Okon had known that what he was protecting was crude oil, Nigeria’s cash cow, used to be pumped by the same pipes to various oil refineries before now but which, […]

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Asaba — Delta State Governor Ifeanyi Okowa has appealed to communities to be vigilant against pipeline vandalism which he said led to loss of three million barrels of crude oil in the state recently. Addressing a delegation of Ukoko R’Ivie R’Urhobo, the umbrella body of traditional rulers from Delta-Central Senatorial District, said in April, 2015, the state lost three million barrels of crude oil as a result of attacks on oil pipelines. "I want to say to Deltans that we should be more vigilant against pipeline vandals. They are doing us a lot of disservice, because based on the indices that have been sent to us, we are losing a lot and it will reflect in this July allocation that will be sent to us", he said. The governor added that the amendment bill for the Delta State Oil Producing Area Development Commission (DESOPADEC) which has passed through second […]

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Presidents Obama and Buhari with aides following Oval Office meeting. Whichever documents we are able to get and subsequently trace the sale of the crude or transfer of money from ministries, departments, Central Bank, we will ask the cooperation of those countries to return those monies to federation accounts and we will use those documents to arrest those people and prosecute them. This, I promise Nigerians He said his administration will recover the mind-boggling funds stashed in foreign bank accounts. The President, who made the vow during his meeting with members of Nigerians In Diaspora Organization, NIDO, resident in the United States and Canada at the Nigerian Embassy in Washington DC, also expressed difficulty in identifying genuine Boko Haram leaders with whom to negotiate for the release of Chibok girls, disclosing that the sect was plotting to exchange some of their leaders being held by the government with the […]

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At least N11.55 trillion or $84.52 billion expected revenue into the coffers of the nation’s Excess Crude Account for the eight-year period from 2007 to 2014 are unaccounted for, according Continue Reading

Shell Petroleum Development Company, SPDC, yesterday, lifted its more than two months force majeure on exports of Nigeria’s Forcados crude oil stream, following the repair of the Trans Forcados Pipeline. According to a statement by the company, the Joint Venture had earlier declared force majeure on the evening on May 5 following a series of leaks in the Trans Forcados pipeline that brings the oil to the export terminal. The Trans Forcados pipeline has a capacity of 150,000 barrels per day. Specifically, the Nigerian Petroleum Development Company, NPDC, a subsidiary of the NNPC, uses the pipeline to transport around 11,000 barrel per day of crude and 6.5 million cubic feet of gas per day, while Seplat Petroleum uses the pipeline to transport its over 60,000 barrel per day of crude oil output. Despite the fact that the bigger, 28-inch and 48-inch sections of the pipeline are operated by Shell, […]

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Photo Lt. Gen. Kenneth Minimah, shown reviewing troops last month, was dismissed as leader of the Nigerian Army on Monday. Credit Agence France-Presse — Getty Images NIAMEY, Niger — Nigeria ’s new president, Muhammadu Buhari , dismissed all of his country’s top military officials on Monday, his spokesman announced, after weeks of mounting violence in which Boko Haram fighters have killed hundreds of civilians. The Nigerian military’s handling of Boko Haram’s bloody six-year uprising has been widely seen as dismal. It has been faulted not only for failing to stem the extremist group’s murderous rampages, but also for making the situation worse through widespread human rights violations. The country’s news media has been urging Mr. Buhari for weeks to get rid of the architects of what is seen in Nigeria as a failed campaign to stop the Islamist militant group. On Monday, some analysts questioned why Mr. Buhari, who […]

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Nigeria president Muhammadu Buhari. Photographer: Pius Utomi Ekopei/AFP/Getty Images It’s been five months since Johnson Umeadi and his wife, Adaku, received their salaries as government workers in southeastern Nigeria. With Nigeria’s finances shot by last year’s collapse in oil prices, they’re struggling with rent and can’t afford school fees for their three children. Shops and grocers are no longer willing to extend them the credit they need to buy basic items such as food and drinks. “It’s like we put all our eggs in one basket and then it went porous,” said Johnson, a 45-year-old employed by a department of Imo state responsible for infrastructure projects in Owerri. “If one of us was working in a private company, or even engaged in petty trading, we would’ve fared better,” he said, declining to disclose his salary. The plight of the Umeadis and others who haven’t received wages has hit everything […]

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Blog Even as Nigeria struggles to fight against Boko Haram insurgents in its northeast, a dangerous but forgotten conflict on the other side of the country is resurfacing. Before the rise of Boko Haram, the conflict in the southern Niger Delta region had long been considered the most potent threat to Nigeria’s security. Over the years, it has displaced thousands and cost the government a hundred billion dollars in lost oil revenue. Violence in the south has been at a low ebb since 2009, when Nigeria’s former President Goodluck Jonathan bought off rebel leaders with a generous package of stipends. But those amnesty payments are set to expire in December, and new President Muhammadu Buhari will have a harder time dealing with the region than his predecessor: unlike Jonathan, Buhari does not come from the Delta, and global declines in oil prices mean that he has far less cash […]

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Twelve people died and three were injured in an explosion during repair work at an Eni SpA crude oil pipeline in Nigeria. The victims worked on a maintenance team for a local service company, Rome-based Eni said in a statement Friday. The Tebidaba-Clough Creek pipeline in the Niger delta was previously “damaged by acts of sabotage.” The company said it is still investigating the cause of Thursday’s blast. Accidents are common in Nigeria, where pipelines are often breached in attempts to pilfer crude. The incidents interrupt oil and gas flows, affecting Nigeria’s energy exports and revenue for companies including Eni, Royal Dutch Shell Plc and Chevron Corp. Thursday’s incident was the worst since January 2012, when an explosion at Chevron’s Funiwa gas field killed two workers, according to a spokesman for a local environmental group. “The dead were unidentifiable,” said Alagoa Morris of Environmental Rights Action, the Nigerian affiliate […]

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Nigerian President Muhammadu Buhari denied that the oil savings account will be depleted to pay government debts, including civil servants’ salaries. The government will use a $2.1 billion dividend paid into the Treasury by Nigeria LNG Ltd., Africa’s biggest producer of liquefied natural gas, to pay wages, Buhari’s spokesman, Femi Adesina, said Tuesday in an e-mailed statement from the capital, Abuja. Nigeria’s 36 states and local arms of the government will also be able to draw “soft loans” from the central bank and have some debt restructured, he said. The comments seek to clarify statements made by Nigeria’s Accountant General Ahmed Idris on Monday that the Excess Crude Account, which holds the nation’s oil savings and has a balance of about $2 billion, will be drawn down by $1.7 billion. The funds will be shared by the federal, state and local governments to meet their financial obligations, Idris said. […]

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One of the first major tasks the administration of Gen. Muhammadu Buhari will have to contend with will be how to finance the 2015 budget in the wake of low oil price and rising threats from declining revenue. This becomes very critical when viewed against the backdrop of the tough economic conditions witnessed over the last couple of months in the country, especially in the area of declining crude oil and gas receipts and Federal Government’s inability to meet some of its financial obligations. Budget highlights It was bad enough that the 2015 budget was being passed more than four months into the year, and was passed by the House of Representatives some days ago at a higher spend rate. The House increased the budget to N4.493 trillion from the N4.358 trillion proposed by the Executive, without taking into consideration the prevailing volatility in crude oil prices. The House […]

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Nigeria’s government plans to run down its oil savings to offset revenue shortfalls and pay debt, such as salaries for state workers. The Excess Crude Account, which has a balance of about $2 billion, will be drawn down by $1.7 billion to allocate to the federal, state and local arms of the government, Accountant-General Ahmed Idris told reporters on Monday in the capital, Abuja. Nigeria accumulates revenue in the ECA when the oil price exceeds the benchmark estimated in the budget. Those savings have dwindled from $21 billion in 2008, according to estimates from the International Monetary Fund. A lack of savings and an almost 50 percent slump in oil prices in the past year is putting pressure on the government of Muhammadu Buhari to deliver on promises that helped to sweep him into office on May 29. Buhari, 72, said last month his government is facing severe financial […]

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Nigerian National Petroleum Corporation (NNPC) spent nearly half of the money it earned in three years and remitted the other half to the federation account, it was revealed yesterday. The corporation earned N8.1trn from crude oil sales from 2012 to 2015, withheld N3.8trn and paid only N4.3 trillion to the national treasury. Officials of the corporation revealed these facts themselves while briefing members of the National Economic Council yesterday at the Presidential Villa, Abuja. They also said that former Minister of Finance and Coordinating Minister for the Economy Ngozi Okonjo-Iweala spent $2.1bn from the Excess Crude Account (ECA) without the approval of NEC. The governor of Edo State, Adams Oshiomhole, disclosed these while briefing State House journalists on the outcome of the four-hour meeting. President Muhammadu Buhari had inaugurated the National Economic Council chaired by Vice President Yemi Osinbajo. Oshiomhole said the NNPC and the office of the Accountant-General […]

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The Nigerian National Petroleum Corporation, NNPC, generated about N8.1trillion between 2012 and May 2015, but paid only N4.3trillion to the federation account, Edo State governor, Adams Oshiomhole, said Monday, citing new details from the federal economic council meeting. The balance of the oil money — about N3.8trillion — was withheld and spent by the NNPC unilaterally without approval or National Assembly appropriation, the governor told journalists. Also, the governor confirmed at the meeting that from November 2014, about $2.1billion was withdrawn from the excess crude account without the approval of the National Economic Council, NEC. Mr. Oshiomhole, who, alongside the governors of Kaduna state governor, Nasir El-Rufai, and Zamfara governor, Abdulazeez Yari, briefed journalists, said following the discovery, the NEC has set up a four-member committee to comb the books of the NNPC to confirm its remittances and how the excess crude account was utilised. President Muhammadu Buhari dissolved […]

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Nigeria’s ruling party recommended the government discard a long-delayed oil-industry bill, review fuel subsidies and sell off some units of the state petroleum company. The Petroleum Industry Bill should be scrapped and replaced by a new reform bill that’s based on discussions with international oil companies to “ensure all perspectives are adequately considered,” the All Progressives Congress said in a report obtained by Bloomberg on Monday. Kayode Fayemi, the APC’s policy director, confirmed the authenticity of the document. The bill has been delayed in parliament for six years due to political wrangling and opposition by international energy companies against proposed tax and royalty terms, deterring investment into Africa’s top oil producer. The APC handed the report, which was based on closed-door meetings on May 20 and 21 in the capital, Abuja, to President Muhammadu Buhari, who took office on May 29 and is yet to appoint a cabinet. The […]

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Nigeria ’s new president, Muhammadu Buhari, on Friday dissolved the board of the state oil company from which billions of dollars is reported to be missing. A statement from the head of the Civil Service, Danladi Kifasi, announced the presidential directive regarding the Nigerian National Petroleum Co., the government agency in charge of nearly all aspects of the country’s oil industry , the seventh largest in the world. Mr. Buhari took office last month promising to halt corruption, and he said this week that Western governments had promised to help recover looted state money. The president’s action came before he has named a cabinet and amid speculation that he may be planning to take charge himself of the petroleum portfolio. A former Central Bank director last year largely blamed the state petroleum company for missing federal revenues of about $20 billion — an amount that the company disputes.

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Nigeria will probably be hit by fuel shortages in three weeks as the government doesn’t have enough money to pay for gasoline subsidies, according to the head of Seplat Petroleum Development Co Plc. “In three weeks we will be back to scarcity because we simply don’t have the money to pay for the subsidy,” Austin Avuru, chief executive officer of Lagos-based Seplat, said on Thursday at a Bloomberg conference at the Nigerian Stock Exchange. Nigeria almost ground to a halt last month during the country’s worst fuel shortage in a decade due to a dispute between oil-product marketers and the outgoing government. The shortage left service stations closed, aircraft grounded, and businesses unable to operate. A lack of oil refining capacity means Nigeria subsidizes gasoline imports and suffers frequent fuel shortages even though it’s Africa’s biggest crude producer of about 2 million barrels a day. President Muhammadu Buhari, who […]

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As the nagging oversupply of physical oil takes its toll, official prices for Nigerian crude have hit their lowest in at least a decade. The Nigerian National Petroleum Corp (NNPC) lowered the official selling price for its largest crude oil stream, Qua Iboe, to dated Brent plus 35 cents per barrel, the lowest differential since May 2005. Bonny Light, once in demand for its high yield of valuable motor fuels, fell to dated Brent plus 23 cents, with the differential below May 2005 levels, traders said. According to a report by Reuters yesterday, the drop follows North Sea crude, which hit a 10-year low earlier this week as all Atlantic Basin sellers, particularly those with light, sweet oil, struggle to place cargoes. "They’re playing along now, towing the line with other OPEC members to try and capture market share," said Kash Kamal, senior research analyst with Sucden. Nigeria is […]

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Nigeria’s four refineries are set to roll back to life in July, the Nigerian National Petroleum Corporation has said. Ohi Alegbe, the spokesperson for the NNPC told PREMIUM TIMES on Saturday that the ongoing phased maintenance of the refineries was nearing completion and that the facilities would soon commence production. "I think by July, the four refineries should begin to work," Mr. Alegbe said. He said the two refineries in Port Harcourt are scheduled to begin to receive crude next week while those in Warri and Port Harcourt would follow shortly after. Mr. Alegbe said the turnaround maintenance of the refineries, which he said began in November 2014, was being undertaken by NNPC’s in-house engineers. "We had to resort to in-house engineers after the original builders of the refineries, who were called in to do the job, kept coming up with outrageous bills," he said. He said parts of […]

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The shale boom that’s reduced U.S. dependence on overseas crude is reverberating in Nigeria as Africa’s biggest oil producer cuts the pricing for its flagship grade to the lowest in a decade. The country, part of the Organization of Petroleum Exporting Countries, will sell July supplies of its Bonny Light crude at 23 cents more than Dated Brent, according to an e-mailed statement from state-run Nigerian National Petroleum Corp. That’s the smallest differential since 2005 and compares with a 50 cent premium in June and $2.55 a year earlier, data compiled by Bloomberg show. Surging output from U.S. shale formations contributed to a market glut that drove crude down almost 50 percent last year, roiling global markets as producer nations lost revenue and foreign-exchange reserves. While oil has pared losses this year, prices are still below what some producers including Nigeria and other OPEC members need to balance their […]

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Nigeria’s central bank will meet with banking executives and currency dealers on Friday and will probably discuss foreign-exchange trading restrictions, people familiar with the matter said. While the agenda hasn’t been disclosed, officials from the Central Bank of Nigeria may consult about easing currency trading rules, according to three people with knowledge of the matter, who asked not to be identified as the meeting is private. Traders and bankers have called for a loosening of controls enforced by central bank Governor Godwin Emefiele to protect the currency of Africa’s biggest oil producer against a 40 percent slump in Brent crude prices in the past year. The naira has weakened 18 percent against the dollar in that period. Central bank spokesmen Ibrahim Mu’azu and Ugochukwu Okoroafor couldn’t immediately confirm whether a meeting is taking place when contacted by phone on Thursday.

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The federal government and the oil and gas producing companies may have lost an estimated $11.5billion to the drop in the price of Brent crude oil from $115 per barrel in June to $68.62 yesterday, THISDAY has learnt. With Nigeria producing about 2.4 million barrels per day and exporting 2.2 million barrels per day, the country may have lost as much as $11.5 billion between June and November this year, forcing the federal government to introduce a raft of measures to shore up its revenue in the face of dwindling earning from crude oil, its main revenue source. The situation may even become more dire should the slide persist. When THISDAY called the Minister of Finance and coordinating Minister of the Economy, Ngozi Okonjo-Iweala late last night for confirmation of the amount lost so far, she said: “It is not a straight forward arithmetical issue. It is pretty late […]

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The Nigerian government should start selling off its stakes in oil joint ventures with foreign partners to ease the funding issues and leakage of cash due to corruption and waste which have impeded the country’s bid to increase production, oil industry auditors said Monday. The government through state oil firm Nigerian National Petroleum Corp. holds an average 57% interest in joint ventures with Shell, ExxonMobil, Chevron, Total and Eni, which account for about 90% of Nigeria’s 2 million b/d oil output. "This divestment will open the arrangement for private sector participation," auditor the Nigerian Extractive Industry Transparency Initiative (NEITI) said. "Above all, it will reduce the corrupt practices, waste and other leakages associated with the management of the JVs over the years," the agency said, adding that the recommendation, following a review of the industry by stakeholders, aimed to assist the reform program of the new government. Article continues […]

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