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UNITED STATE imports of Nigerian crude hit virtually three-year record high

UNITED STATE imports of Nigerian crude hit virtually three-year record high

U.S. imports of Nigerian crude last week jumped to 559,000 barrels per day (bpd), a weekly record going back to mid-2013 as refining firms turned to imports of West African crude that had previously been displaced by domestic grades during the U.S. shale boom.

Nigeria was the fourth largest supplier of foreign crude to the U.S. last week, displacing Mexico and also competing with Iraq and Colombia, according to preliminary figures from the Energy Information Administration (EIA).

Of the 11 cargoes of Nigerian crude that have arrived in the United States this month, eight went to the East Coast, while the remainder were sent to the U.S. Gulf Coast, according to Thomson Reuters Trade Flows data.

Along with typical cargoes of Nigeria’s Qua Iboe, Bonga and Forcados, two 500,000-barrel cargoes of Usan medium crude were delivered to Royal Dutch Shell at South Louisiana Port, marking the first time since May 2014 that this crude has entered the United States.

“More WAF (West African) and North Sea cargoes have been heading to the U.S. as light crude outputs decline,” consultancy Energy Aspects wrote in a note last week.

U.S. shale production in April is expected to fall by 106,000 bpd to 4.87 million bpd, the second-largest monthly decline on record, according to the EIA’s latest drilling productivity report.

From 2004 to 2007, Nigeria exported over 1 million bpd to the United States, but a surge of U.S. domestic production that is of similar quality – including shale oil – later forced African light sweet crude producers, especially Nigeria, to find new destinations for their exports.

In consequence, the United States only imported some 58,000 bpd from Nigeria in 2014 and 2015, the EIA data say.

-Thomson Reuters

Online Editor by — March 23, 2016 in Business News 0
FG says fuel scarcity to persist for two more months

FG says fuel scarcity to persist for two more months

The Minister of State for Petroleum, Emmanuel Ibe Kachikwu, on Wednesday said fuel scarcity may persist for two more months as oil produced in the refineries would not be sold but kept in a “strategic reserve”, Premium Times reports.

While addressing journalists after leading members of the National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to meet with President Muhammadu Buhari at the Presidential Villa, Abuja, Mr. Kachikwu said he had no “magic wand” to make fuel available overnight.

He however noted that; “We are going to put a new model to enable us increase the pace and actually get (oil) majors as part of the crew of those to bring in more products so that the NNPC will sort of go back to the capacity of what it used to do and the majors will take over the balance of importation. So over the next two months, we should see quite frankly a complete elimination of this (fuel scarcity). Our strategy is that whatever is produced in the refineries will not go for sale, we are going to keep them in strategic reserve. Because the key problem here is that there is no reserve . A ny time there is a gap in supply , it goes off”.

Online Editor by — March 23, 2016 in Business News 0
President Buhari Pledges Additional 10,000MW In 3 Years

muhammadu-buhari_650x400_71436563706

President Muhammadu Buhari has promised that his administration would ensure steady power supply before the expiration of his tenure through the provision of additional 10,000 megawatts.

He stated that 2,000 of the anticipated 10,000 megawatts will be added to the national grid in 2016.

“Nigerians’ favourite talking point and butt of jokes is the power situation in our country. But, it is no longer a laughing matter.

“We must and by the grace of God we will put things right. In the three years left for this administration we have given ourselves the target of 10,000 megawatts distributable power.

He said the nation was facing the classic dilemma of privatisation of the power sector, noting that no remarkable improvement in the quality of service had been recorded after the exercise.

However, he noted that the National Electricity Regulatory Commission (NERC) must ensure that consumers get value for money and over-all public interest is safe-guarded as government will complete the process of the privatisation.

Online Editor by — March 23, 2016 in Business News 0
Local Carriers to Spend N560billion on Aircraft Maintenance in 2016

plane

Findings have revealed that local carriers operations will spend over N560 billion on aircraft maintenance in 2016.

This amount is expected to cover major aircraft checks in Europe, Asia, America, South Africa, Ethiopia and Morocco.

The checks include “C and D” under which major components of aircraft are stripped and reworked.

According to investigations over 200 aircraft are on the regulatory register for scheduled, private / charter operators and training aircraft.

In 2013, the operators spent over $1.22 billion (N200 billion) when the exchange rate was N200 to $1 on maintenance because of lack of such facility at home.

Nigeria has over 200 aircraft (scheduled, charter and privately owned), which are taken abroad for major repairs. South Africa, Egypt, Morocco and Ethiopia have workable Maintenance Repairs Overhaul (MRO) facilities, and airports that operate as hubs.

The process of taking aircraft abroad for repairs, according to engineers, takes a minimum of two weeks with a corresponding loss of about $500,000 (N160 million) for C-Check on Boeing 737. A smaller aircraft, such as, Embraer 190 or 100 would cost $300,000 (N110 million) during the same period. Many of the airlines take their aircraft abroad for repairs at exorbitant costs.

A former spokesman for Airline Operators of Nigeria (AON), Mohammed Tukur, called for partnership between the government and private investors to establish a local maintenance facility.

According to him, it could save the airlines over 50 per cent of maintenance costs and make Nigeria a technical hub for aircraft maintenance. MRO costs encompass both the outgoing charges and the revenue loss during the out-of-service period.

-bizwatchnigeria

Online Editor by — March 23, 2016 in Business News 0
1.3million Air Travelers Used Nigerian Airports in Four Months” – FAAN

plane inside

According to the Federal Airports Authority of Nigeria, FAAN, no fewer than 1,300,487 passengers passed through the nation’s airports between September and December 2015.

This is as the agency also declared that aircraft and cargo movements in the country also increased significantly within the period.

The General Manager, Corporate Communications, FAAN, Yakubu Dati disclosed these during an interview with our correspondent at the Murtala Muhammed Airport, MMA, Lagos.

Dati said in September, airports managed by FAAN recorded 316, 680 passengers while the traffic in October was 318, 503.

Also, in November, the nation’s airports recorded 328,652 passengers’ movement while the number slightly increased to 336,652 Dati however attributed the growth to some significant steps taken by the Federal Government in recent time and assured that the traffic would increase astronomically this year.

It would be recalled that a total of 59,233 aircraft landed in all airports across the country in the first quarter of 2015 according to the data released by the National Bureau of Statistics, NBS.

–bizwatchnigeria

Online Editor by — March 23, 2016 in Business News 0
Nigerian state oil firm ‘withheld $25bn over five years’

Nigerian oil worker

Nigeria’s state-owned oil company has failed to pay the government $25bn (£17.5bn) over five years, the nation’s fiscal commission has said.

It includes $15bn that the nation’s auditor general last week said the Nigerian National Petroleum Corporation (NNPC) failed to pay in 2014 alone.

Oil revenue accounts for roughly two-thirds of the government’s funding.

President Muhammadu Buhari has promised to crack down on corruption since coming to office last May.

In a statement, the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), an independent body, said: “Records at the Commission’s disposal indicate that between January 2011 and December 2015, the total indebtedness of NNPC to the Federation Account was 4.9 trillion naira.”

Previous allegations

Under the current set-up, the NNPC hands over its oil revenue and money is then paid back based on a budget approved by parliament.

In this 29 May 2015 photo, Nigerian President, Muhammadu Buhari, salutes his supporters during his inauguration in Abuja, NigeriaImage copyrightAP
Image captionPresident Buhari has described the corruption in Nigeria’s oil sector as “mind-boggling”

The state oil giant has been mired in corruption allegations and losing money for many years.

Last month, the government announced that the NNPC would be broken up into seven different companies.

A separate audit ordered under former President Goodluck Jonathan and carried out by global accountancy firm PwC, found that the NNPC had failed to pay the government $1.48bn between January 2012 and July 2013.

Nigeria is Africa’s biggest oil producer, but the economy has suffered because of the recent decline in the price of oil.

-bbc

Online Editor by — March 23, 2016 in Business News 0
Nigeria’s State Oil Firm Withheld $25 bln From Government

FILE - Thick black smoke billows from a pencil-thin chimney at the Port Harcourt Refining Company Limited, Rivers State on Sept. 16, 2015. The Port Harcourt refinery is Nigeria's oldest, built in 1965. In recent years, however, it became a byword for corruption, a murky, state-run body where billions of dollars in revenue apparently disappeared.

Nigeria’s state oil company failed to transfer 4.9 trillion naira ($25 billion) to the public purse between January 2011 and December 2015, an official body said on Tuesday.

President Muhammadu Buhari, who was elected a year ago, has vowed to crack down on mismanagement and corruption in Africa’s biggest economy which have left most of the 180 million Nigerians mired in poverty despite the country’s energy wealth.

Buhari fired senior staff at the Nigerian National Petroleum Corporation (NNPC) last year and earlier this month approved a revamp of its structure to aid transparency in the oil sector which makes up about 70 percent of national income.

It is the latest accusation to be leveled at the state company. In 2014 Lamido Sanusi, the then central bank governor, was suspended after accusing NNPC of failing to pay $20 billion into government accounts between January 2012 and July 2013.

Constitutionally, NNPC must hand over its oil revenue and money is then paid back based on a budget approved by parliament. But the act establishing the company allows it to cover costs before remitting funds to the government.

“Records at the Commission’s disposal indicate that between January 2011 and December 2015, the total indebtedness of NNPC to the Federation Account was 4.9 trillion naira,” said the Revenue Mobilization Allocation and Fiscal Commission (RMAFC).

NNPC could not immediately reached for comment.

Last Monday the auditor-general said 3.2 trillion naira was not remitted in 2014 but NNPC said the claims were inaccurate because they failed to account for costs.

RMAFC, a body set up by the government which monitors official revenue flows, said its figure for the sum that was not remitted “included NNPC’s claims for subsidy on oil products, crude and product losses, strategic reserves and the pipeline maintenance cost”.

The latest figures on OPEC’s website state that oil exports from Nigeria, Africa’s biggest oil producer, are worth around $77 billion a year.

NNPC had rejected Sanusi’s claims in 2014 that it had failed to pay $20 billion into government accounts between January 2012 and July 2013. A subsequent audit by PricewaterhouseCoopers found that some funds were unaccounted for, but bemoaned a lack of cooperation and issued an audit with extensive caveats.

Parliament is next week expected to start debating an amended Petroleum Industry Bill, a much-delayed plan to revamp the energy sector changing everything from taxes to overhauling NNPC, environmental rules and revenue sharing.

-voanews

Online Editor by — March 23, 2016 in Business News 0
We’ll Generate 25,000MW in Four Years -Nigerian Power Minister

Mr Mustapha Shehuri

The Minister of State, Power, Works and Housing, Mr Mustapha Shehuri ‎said yesterday that the federal government is working towards generating 25,000megawatts (mw) in the next four years.

But President Muhammadu Buhari also said yesterday that his administration had set a target of delivering 10,000 megawatts of electricity generation in the next three years.

The president, who stated this while addressing the National Economic Council retreat held at the State House, Abuja, said this year alone the administration would add 2000 megawatts to the national grid.

The minister spoke in Abuja at the induction of 100 trainees of the National Power Training Institute of Nigeria (NAPTIN).

He said the target would be achieved by 2020 adding that the military era had not invested in the power sector especially on human capacity.

“Nigeria’s plan is to continually increase the level of electricity generation to the target of 25,000mw by the year 2020. This can only be achieved through a robust infrastructural development accompanied with a competent technical workforce,” Shehuri said.

The new pronouncement by the Minister is despite the current less than 4,000mw power generation. Operators had projected 5,000mw by February 2016 with a rise in electricity tariff.

But for a day of 5,070mw peak ‎generation on February 2, 2015, the grid had continued to suffer decline. It hit an all time low of 2,000mw this March due to poor gas supply to the power plants.

Earlier a former Permanent Secretary in the then ministry of power, Engr. Abdullahi Aliyu said training for fresh staff which used to be two years from 1972 under NEPA was stopped in 1990 due to lack of funding during the military era.

He said NAPTIN revived the training culture in 2009 but the training was limited to one year.

Online Editor by — March 22, 2016 in Business News 0
Buhari seeks path out of oil price pit

Amid a deep infrastructure deficit and other woes, the country’s future lies in agriculture and manufacturing, says president

Nigeria's Buhari seeks path out of oil price pit

Nigeria’s President Muhammadu Buhari said on Monday that the country’s future lies in agriculture and manufacturing, as the falling price of crude oil sets Abuja on the edge of economic collapse and currency crisis.

Buhari added that the country equally needs workable policy options to ensure stable electricity and affordable housing, as well as bridge the deep infrastructural deficit, to address the many challenges facing it.

“If we aggregate public views from the grassroots, city dwellers, the economic managers, consumer groups, the Unions and other stakeholders of the economy, there is near unanimity about the ills of our economy. But naturally, there are divergent views about solutions,” Buhari said in a speech opening a two-day economic summit called by his administration to tackle the economic crisis.

The president’s speech signaled the need to refocus the economy from oil dependency to one driven by agriculture, manufacturing, and taxes. Oil and gas currently accounts for 11 percent of the country’s gross domestic product, versus 50 percent from the service sector, 23 percent from agriculture, and 16 percent from industry and construction, according to the latest figures from the country’s National Bureau of Statistics.

Despite contributing just 11 percent percent of GDP, oil accounts for more than 80 percent of earnings from exports.

Agriculture, which contributed roughly 65 percent of GDP in the 1960s, suffered neglect from the 1970s during the oil boom. This has been blamed for Nigeria currently spending up to $5 billion annually to import foods.

Buhari identified the lack of consistent policy, high cost of borrowing, and lack of long-term funding as well as obsolete infrastructure as major challenges in the drive to diversify the economy.

The summit, hosted by the government’s National Economic Council chaired by the vice president, is being attended by governors from the country’s 36 states, top lawmakers, and other key stakeholders, among others.

With oil selling for around $40 a barrel, down from over $100 two years ago, Nigeria has been caught in a serious financial logjam as many states are unable to pay workers or undertake any development projects. It has also resulted in a foreign exchange shortage and depleted its foreign reserve, with the country unable to meet the forex needs of most of its importers and citizens.

The local currency, the naira, has consistently fallen against the dollar as importers – barred from getting dollars from banks – now struggle to get forex from alternative sources on the black market, a practice experts say opens the naira to speculations.

Buhari urged the summit to come up with policies to address the challenges.

“For too long government policies on agriculture have been half-hearted, suffering from inconsistencies and discontinuities,” the president said.

“Yet our real wealth is in farming, livestock, hatcheries, fishery, horticulture, and forestry.”

He added that his administration hopes to generate at least 10,000 megawatts of electricity within the next three years, beginning with adding 2,000 megawatts to the national grid in 2016 alone.

“We are facing the classic dilemma of privatization: Public interest Vs the Profit Motive. Having started, we must complete the process. But the National Electricity Regulatory Commission (NERC), the regulatory authority, has a vital job to ensure that consumers get value for money and overall public interest is safeguarded,” the president said, apparently balancing the fear of investors with consumers’ agitation over the high cost of electricity.

Buhari also lamented the poor state of the health industry, which he says results in Nigerians spending at least $1 billion annually to access medical care outside of the country.

He said his outlines of the problems confronting the economy and possible solutions to them “are by no means exhaustive.”

“I hope this retreat will come up with practical, viable solutions and recommendations as we chart a course for our nation in this turbulent domestic and international economic environment,” Buhari added.

-Anadolu News Agency

Online Editor by — March 21, 2016 in Business News 0