Friday, November 16, 2018

OPEC’s First Female President May Be Extradited Back To Nigeria



Nigeria is looking for the extradition of former oil minister and the first female president of OPEC from the UK to face trial in her home country, because a corruption investigation in Britain is taking too long, the head of Nigeria’s Economic and Financial Crimes Commission (EFCC) said on Monday.

Diezani Alison-Madueke served as petroleum minister of Nigeria between 2010 and early 2015 under then Nigerian president Goodluck Jonathan, until he was defeated in the elections by current president Muhammadu Buhari in 2015. Alison-Madueke was also the first female president of OPEC.
She was arrested in 2015 in London as part of a two-year-long investigation by the UK National Crime Agency (NCA) into global corruption, bribery, and money laundering. Alison-Madueke was released on bail after being questioned. She has been on bail ever since, according to AFP.

Police and investigators suspect that Alison-Madueke was involved in siphoning off billions of U.S. dollars from Nigerian oil deals and state accounts when she was overseeing Nigeria’s oil industry, for personal benefits, including for buying luxury homes in London and in Nigeria’s capital Abuja.

More than two years ago, a Nigerian ad-hoc parliamentary committee revealed that there were no formal contracts between the Nigerian National Petroleum Corporation (NNPC) and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.

According to the results of the investigation, Alison-Madueke illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura.

The former Nigerian oil minister denies wrongdoing. Now Nigeria seeks extradition from the UK to put her on trial at home.

EFCC’s chairman Ibrahim Magu told a news conference in Abuja on Monday that “It is very unreasonable that she is not being tried there,” referring to the UK.

“That’s why I say, if you cannot prosecute her, bring her here. We will prosecute her... We cannot wait endlessly like this. I think three years and above is sufficient to take her to court,” AFP quoted Magu as saying.   

By Tsvetana Paraskova for Oilprice.com

Monday, November 12, 2018

NNPC Considers Crude-for-Product Deals with Shell and ExxonMobil


Nigerian oil company Nigerian National Petroleum (NNPC) is reportedly considering crude-for-product deals with Shell and ExxonMobil.

The potential deal could be similar to NNPC’s agreement with British firm BP last week, Reuters reported citing the former’s upstream chief operating officer Bello Rabiu.

NNPC depends on foreign imports for the country’s fuel needs as it buys 70% of the demand, especially gasoline, through swap deals with overseas companies.

The national oil company signed such contracts with ten consortiums, including Vitol, Trafigura, Mercuria and Total.

Rabiu was quoted by the news agency as saying: “Unfortunately, Shell and ExxonMobil exited the downstream sector in Nigeria a couple of years ago, but they are coming back for this particular arrangement because it’s an opportunity for them to get crude and sell their products to the refineries.

The company extended the existing contracts to June next year, however, several trading sources in the consortiums have reportedly sought new price terms.

Furthermore, Rabiu stated that the company aims to create savings of around $1bn, as achieved in 2016, during next year.

He further added that the existing arrangement of crude-for-product swaps could end once NNPC enhances its refineries.

Rabiu said: “If our refineries are back, which we want in the next 18 months, this thing will stop. So, all these things are just stop-gap measures, but the key issue is that we wanted to import at the least cost before our refineries come back on-stream.”

In a bid to reduce its dependence on fuel imports, the company has been engaged in discussions with consortiums such as traders, energy majors and oil services companies to improve its oil refineries. Talks are said to be in the final stages and the company is expecting to reach a deal by the end of this year.

Railed Refined Products to Mexico Hinge on Storage

https://theodora.com/pipelines/united_states_pipelines_map.jpg

Railed movements of refined products are a small portion of Mexico's total imports, but they will grow once Mexico builds new terminals and storage to handle increased traffic, industry officials said at the Argus Mexican Refined Products Markets conference.

Railed crude shipments from Canada to the US Gulf coast run along more efficient networks and offer better returns for energy companies looking to deploy their fleets of owned or leased railcars, said Jennifer Fussell, assistant vice president of sales and marketing for chemicals and petroleum at Kansas City Southern (KCS). The railway runs unit trains from US Gulf coast refining centers into central Mexico.

"These energy companies are looking at … crude by rail that's getting incredible turn times on equipment that is expensive, and then looking at the current infrastructure limitations for Mexico," Fussell said. "Those railcar turns are not as efficient, but they will be."

Terminals capable of unloading unit trains within 24 hours will be key to boosting railed refined products shipments, Fussell said. To that end, KCS said it expects substantial storage to be built in Mexico, to the tune of about 1.5mn bl each year from 2019-2021.

About 60pc of US refined exports to Mexico move by vessel, followed by pipeline at 20pc, truck at 12pc and rail at 8pc, based on an analysis of US cross-border trade data, said Rangeland Energy vice president of business development Michael Moss.

Rail could boost its share to 15-20pc of US refined products exports by 2020 as more terminals and storage are built, Moss said. Rangeland Energy's Corpus Christi products-by-rail and LPG loading terminal came on stream for manifest carload service in June, and is targeting unit train shipments by late in 2019.

Truck operations have had first-mover advantages in Mexico, with cross-border shipments from Corpus Christi and even Houston moving "deep into Mexico," Moss said. Trucking operations will be increasingly limited to border-area deliveries once rail and port options are built out, Moss said.

New international marine fuel rules set to go into effect in 2020 could create new opportunities for Mexico's rail networks.

Pemex's six refineries produce a large amount of high-sulfur residual fuel, which is mostly sold into the bunkers market from Mexico's ports. Once the marine fuels rules take effect, Pemex will need to find other markets for its high-sulfur material. Both Rangeland and KCS said they were targeting ways to tap additional business to carry fuel oil.

The new marine rules will be a significant challenge for Mexico and its refineries, said Jerry Phillips, global market analysis manager for Phillips 66. Mexico's refineries yield about 30pc high-sulfur residual fuel, versus about 3pc for US Gulf coast refineries, Phillips said.

Railroads could support imports of US light, sweet crude to Mexico, which could help Pemex's refineries decrease their residual fuel output because US crude has less sulfur content than many Mexican grades.

"There is no reason why clean products can't import in and crude import out, or even bringing some light sweet into the country," Fussell said. "We see that as an opportunity for Mexico."

Friday, November 9, 2018

Keystone XL pipeline project blocked by judge in Montana

Crewmen work on TransCanada's Keystone XL project near Winnsboro in Wood County in 2012.

https://www.houstonchronicle.com/business/energy/article/Keystone-XL-Pipeline-Project-Blocked-by-Judge-in-13377532.php

TransCanada Corp.’s long-delayed Keystone XL pipeline project was blocked by a Montana federal judge pending further environmental review.

Thursday night’s ruling is the latest set-back for the Calgary-based pipeline company in its decade-long push to construct a 1,179-mile long conduit to deliver crude from Alberta’s oil sands to a Nebraska junction, en route to refineries near the Gulf of Mexico.

The Indigenous Environmental Network, River Alliance and Northern Plains Resource Council filed a pair of lawsuits against the U.S. in March 2017 shortly after President Donald Trump gave his approval for the project to cross the U.S.-Canada border. TransCanada joined the litigation to defend the permit approval.

U.S. District Judge Brian Morris in Great Falls agreed with the groups’ argument that a 2014 environmental impact assessment fell short of the National Environmental Policy Act and other regulatory standards.

The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.

Morris was appointed in 2013 by then-President Barack Obama, who had refused to grant a cross-border permit for the international project. Morris has ordered it vacated.

Nebraska’s Supreme Court last week heard arguments from attorneys for landowners seeking to overturn that state’s public service commission approval of its route there.

The case is Indigenous Environmental Network v. U.S., 17-cv-00029, U.S. District Court, District of Montana (Great Falls).

©2018 Bloomberg L.P.

Zero US Crude oil exports to China recorded for second month

The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.  
Eddie Seal | Bloomberg | Getty Images
The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.


The lack of US seaborne exports of crude oil to China recorded in August, continued into September. 
 
This is despite crude oil not being a part of the ‘official trade war’, BIMCO’s Peter Sand said.

 “The trade war between the US and China is now impacting trade in both tariffed and some untariffed goods with both countries looking elsewhere for alternative buyers and sellers.

“Tonne/mile demand generated by total US crude oil exports has risen 17% from August to September, but is down 4.8% from the record high in July.

“For the crude oil tanker shipping industry distances often matter more than volumes, with exports of US crude oil to Asia generating 74% of tonne/mile demand in September, up from 70% in August,” Sand explained.

In 2017, Chinese imports accounted for 23% of total US crude oil exports. For the first seven months of this year, the number was 22%, but has dropped to zero in August and September.

For the seventh month in a row, total US crude oil exports, excluding to china, hit a new all-time high reaching 7.9 mill tonnes in September.

South Korea has become the largest long-distance importer of US crude oil taking 1.1 mill tonnes in September, the highest level. Similarly, the next top three overseas importers of US crude oil, namely the UK, Taiwan (both at 0.94 mill tonnes) and the Netherlands (0.74 mill tonnes) all imported more in September than before.

Exports to Asia jumped in June and July, from a 43% share of total exports since the start of 2017 to reach a 56% share. This share was down to 46% in August, but climbed back to 51% in September.

The two other major importing regions in September were Europe (33%) and North and Central America (13%), while South America (2%), the Caribbean (1%) make up the rest.

Thursday, November 8, 2018

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil
Venezuela will present its state-backed cryptocurrency Petro as a unit of account for crude oil trading to the Organization of the Petroleum Exporting Countries (OPEC) in 2019, the country’s oil company PDVSA reports on its Twitter Nov. 7.


The PDVSA has cited its president Manuel Quevedo, who also holds the position of Venezuela’s Minister of Oil and Mining, speaking about the future presentation:
"We will be presenting Petro to OPEC in 2019 as the main digital currency backed by oil."
According to the PDVSA, Quevedo also added that Petro will be offered as a unit of account for global crude oil trading, noting that all Venezuelan oil will be traded for Petro.

OPEC is a global intergovernmental organization made up of 15 nations, founded in 1960 in Baghdad to develop regulation and policies for the world’s main oil exporters. According to OPEC’s website, the organization has not yet scheduled its agenda for 2019; the nearest meeting of the oil industry members will be held Dec. 6 in Vienna, Austria.

Venezuela officially launched the sale of its widely discussed oil-backed cryptocurrency at the end of October. 11 months after country’s leader announced the national coin, Petro can now be purchased directly from its official website or from six local crypto exchanges authorized by the government. However, crypto wallets for trading the coin have reportedly been suspended by Google.

As Cointelegraph has often reported, the Venezuelan government is actively promoting Petro. For instance, Maduro appealed to the county’s citizens in October, asking them to invest in gold and Petro while the national currency, the sovereign bolivar, is facing hyperinflation.

The country’s president also stated that Petro would be used for international commercial transactions starting in October 2018. Moreover, Venezuela announced that the currency would be used as a unit of account within the country, making salaries and pricing systems tied to Petro.

However, some experts, journalists, and economists are sceptical about Venezuela’s coin. A Reuter's report claimed that Petro was not backed by oil nor mined anywhere in the country. The news agency also cited former Oil Minister Rafael Ramirez who wrote that "the petro [...] only exists in the government’s imagination.”

Experts also told media outlet Wired that PDVSA, which reportedly backs Petro, had $45 billion in debt and showed no signs of any trading activity. The publication noted that this might mean the currency is only a "smoke curtain" to conceal Maduro's recent failure to reanimate the national fiat currency.