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FG mulls new refineries for optimal performance of oil sector

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The Group Manading Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Emmanuel Ibe- Kachikwu, on Wednesday in Kaduna said the Federal Government would consider establishing new refineries for optimal performance of the oil sector.

Kachikwu stated this, while addressing Energy Correspondents shortly after he was conducted round the Kaduna Refining Petrochemical Company (KRPC) in Kaduna.

The GMD said the NNPC was working to get the refineries across the country to work to their optimal production with “new business modules, new commercial modules and new approach on how we can get to where we should be.

“What is obtainable is that most of our refineries are close to 30 to 40 years old; we need to begin to look at building new refineries in the same land space where they can share facilities so that you will have something to lean on when these old ones are beginning to kick out.

“Obviously, we need new modules because with this modules it won’t get us very rapidly. Three out of the six units of the plants were down.

“Some of them for a very long period. We need to sit down and see what modules, how do you turn around the new refinery. How do you work on emergency basis components of the ones that is there.

“Kaduna has a very unique place in my heart like I said because I grew up in Kano and I used to come here often.

“It is so key for the survival of the economy of Kaduna State and the rest of the North and we really need to focus on getting this things work and getting it to expand.

“Without them we are not going to get out of problems of fuel supply, power supply and all that. So we are going to have a whole commercial structure,a whole engineering structure; a lot needs to be done different from models we are pursuing right now “.

According to him, “what really is the truth about refineries is that a lot needs to be done in terms of applying different model of development. So we are going to be working to clarify those solutions”.

He said the NNPC management was committed to ensure that within the next 90 days time frame some elements of the KRPC plant would work the way they would be expected.

“But never will we get it to where I will love it to be. So simultaneous reserve will enhance process to see the rest of the units getting to some level of maintenance and repairs.

“ On security of the pipelines, we are doing quite a lot.

“Aas you are aware that we are working with the security forces to enhance the Warri to Kaduna points and they have been tested now for integrity and I think by my understanding for the last testing is that is fairly okay now to take control if the FCC units are working.

“So on a short term basis, we have been able to deal with that medium term basis; we are going to work with the security agencies to ensure that the sort of destruction you find on pipelines not just from Warri to Kaduna, but the whole country, becomes a thing of the past.

“We working on a very enhanced, very robust, very accelerated programme with the security forces to deal with that.

“We are trying everything that we can to it and we are sending a body language that the business of messing around with the pipelines is over and I think the message is going round as laud as ever.“

On the issue of crude oil swap deals, the NNPC boss said that the essence of the swap cancellation was that the company was saving over 200 million dollars by virtue of doing that.

“You have transparency in the deal per month and you have transparency that embedded in those processes.“

Kachikwu said that sufficiency and issue of efficiency had nothing to do with canceling or non canceling crude swaps.

“You less discretion by whoever is making decision in terms of allocation. We can leave trading and focus on what is more important in the oil industry. I can assure you that there are structures put in place.

“You will get product the way you need it. We are working on that. Even though we have canceled swap, you are going to have replacement swap contract lined along very efficient and very transparent processes that will save us lot of money.

“The refineries are not working to global best practice right now; they are all down, so what are we talking about global practices. We are dealing with major situation where pipelines have perpetually tools for destruction

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BUSINESS

External reserves sustains downward trend, sheds $337m in 2wks

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Nigeria’s external reserves fell by $337 million in the first two weeks of August, maintaining its declining trend since the middle of last month.

Data from the Central Bank of Nigeria showed that the external reserves fell to $38.882 billion on Thursday August 11th, 2022, from $39.219 billion at the end of July 2022.

This indicates that the external reserves has lost $563 million since July 18, when it commenced the latest downward trend.

Prior to July 18, the external reserves had maintained a 40 days upward trend, rising by $976 million to $39.445 billion from $38.421 billion on June 6th, buoyed by rise in the price of crude oil, which accounts for over 80 per cent of the nation’s foreign exchange  earnings.

However, analysts at Financial Derivatives Company Limited, FDC, attributed the declining fortunes of the reserves since July 18 to increased dollar sales by the Central Bank of Nigeria, CBN, in its bid to stabilise the exchange rate.

While projecting further decline in the external reserves, they however maintained that the increased dollar supply by the apex bank will lead to appreciation of the naira at the official and parallel market.

Making this projection in the FDC Bi-Monthly Economic Bulletin, they said: “The depletion on the reserves was majorly due to CBN’s supply of foreign exchange to stabilise the currency.

“The external reserves is expected to continue its downward trend as the CBN intensifies its efforts to stabilise the currency by supplying foreign exchange to the I & E (Investors and Exporters) window.

“Because of the country’s low oil production levels, high oil prices may have less of an impact on the country’s external reserves.

“A constant depletion of the external reserves is likely to discourage the CBN from supplying foreign exchange in the foreign exchange market. This could further stoke currency depreciation as demand outpaces supply.”

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Nigeria loses N101bn worth of oil, says OPEC

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Nigeria’s crude oil production plunged by 2.3 million barrels in July 2022 when compared to what the country produced in the preceding month of June, data from the Organisation of Petroleum Exporting Countries showed on Thursday.

In its latest Monthly Oil Market Report for August 2022, OPEC stated that crude oil production figures based on direct communication indicated that Nigeria’s output dropped by an average of 74,000 barrels per day in July.

This implies that for the 31 days in July, the country lost about 2.3 million barrels of crude oil. The organisation further stated that the average cost of Brent crude, the global benchmark for oil, during the month under review was $105.12/barrel.

By losing 2.3 million barrels in July this year, it means Nigeria’s oil earnings fell by about $241.1m or N101.13bn (at the official exchange rate of N419.37/$) in the month under review.

Data from OPEC showed that Nigeria’s oil production in June 2022 was 1.158 million barrels per day, but this dropped to 1.084 million barrels per day in July.

The country had produced 1.024 million barrels per day in May this year, according to figures released by OPEC on Thursday.

The Federal Government, operators and experts have consistently fingered crude oil theft in the Niger Delta as the major reason for Nigeria’s poor output and its continued failure to meet the monthly oil production quota approved by OPEC.

The Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, blamed the challenges in the oil sector on the high level of insecurity across the country.

This, he said, had continued to discourage investors in the sector, leading to lower production of crude oil and lower earnings for Nigeria despite the increased cost of crude.

He said, “Investors in the oil and gas sector continue to lament the challenges posed by insecurity, oil theft, unstable policies and inappropriate fiscal regimes.

“The downstream sector has continued to be weighed down by the pricing regimes and the regulatory environments which have continued to dim the growth prospects in the sector.”

Meanwhile OPEC stated that crude oil prices dipped in July, as against their costs in June, adding that crude in OPEC Reference Basket fell by $9.17 or 7.8 per cent month-on-month in July to average $108.55/barrel.

“Oil futures prices remained highly volatile in July, amid a sharp drop in liquidity. The ICE Brent front month declined $12.38 or 10.5 per cent in July to average $105.12/barrel and NYMEX WTI declined by $14.96 or 13.1 per cent to average $99.38/barrel,” the global oil cartel stated.

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BUSINESS

Elon Musk says Twitter hiding key witnesses in bot battle

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Elon Musk got another $7 billion from friends and investors to buy Twitter

Elon Musk is accusing Twitter Inc. of hiding key witnesses in their legal battle over whether he must consummate a $44 billion buyout of the company, according to people familiar with the allegations.

Musk contends the social media company isn’t producing the names of employees specifically responsible for evaluating how much of Twitter’s customer base is made up of spam and robot accounts, said the people, who asked not to be identified because they weren’t authorized to speak publicly about the matter.

Musk’s lawyers have asked the judge in the case to force Twitter to identify the workers so the defense can get their records and question them, the people said.

A letter asking Delaware Chancery Court Judge Kathaleen St. J. McCormick to compel Twitter to hand over the names was filed Tuesday under seal. Under the court’s rules, Twitter’s attorneys have five business days to decide what should be redacted from the filing as proprietary information.

A Twitter spokesman declined to comment on the filing.

Tesla Share Sale
The letter comes as the Tesla Inc. co-founder said Tuesday he is selling $6.9 billion of Tesla shares to avoid a sudden sale in the event he is forced to go ahead with the deal to acquire Twitter. That has prompted some analysts to predict the billionaire may settle the case.

So far Twitter has handed over the names of “records custodians,” who aren’t as familiar with the data at issue, the people said. Musk wants McCormick to force Twitter to come up with the names of the employees charged with monitoring those accounts, they said.

Both sides have issued a torrent of subpoenas to banks, investors and lawyers involved in the teetering transaction as they seek ammunition for an Oct. 17 trial.

“It’s another salvo in the discovery wars that are common in this kind of litigation,” said Carl Tobias, a University of Richmond law professor who specializes in securities and merger and acquisition law. “Both sides are jockeying for position by targeting different information.”

War of the Bots

Twitter’s lawyers say they’ll need only four days in court to prove Musk is using questions about spam and bot accounts as a pretext to walk away from the deal. The company said it has turned over all its information about those accounts and that it intends to make Musk pay the $54.20 per share he originally agreed to.

Musk counters in court filings that Twitter’s handover of the that material hasn’t been robust and that the company has failed to produce evidence that spam bots account for fewer than 5% of its active users, as it has said in regulatory filings. He argues this gives him a legitimate basis for canceling the buyout.

He alleges Twitter’s disclosures show that the actual number of monetizable daily active users, or mDAU as the industry calls it, is 65 million less than the 238 million Twitter has claimed. He says Twitter also misrepresents how many of those users view advertising, the company’s main source of revenue. By his estimate, fewer than 16 million users see the majority of ads and should be counted as monetizable.

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