Friday, January 31, 2014

Keystone XL Pipeline Clears Major Hurdle After State Department Report Raises No Major Objections

Proposed Keystone XL Pipeline
WASHINGTON (AP) — The long-delayed Keystone XL oil pipeline cleared a major hurdle Friday as the State Department raised no major environmental objections to the controversial pipeline from Canada through the heart of the U.S. Republicans and some oil- and gas-producing states cheered, but the report further rankled environmentalists already at odds with President Barack Obama.
The department report stops short of recommending approval of the $7 billion pipeline, which has become a major symbol of the political debate over climate change. But the review gives Obama new cover if he chooses to endorse the pipeline in spite of opposition from many Democrats and environmental groups. Foes say the pipeline would carry "dirty oil" that contributes to global warming. They also worry about a spill.
Republicans and business and labor groups have urged Obama to approve the pipeline to create thousands of jobs and move toward North American energy independence. The pipeline is also strongly supported by Democrats in oil and gas-producing states, including Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska and Mark Pryor of Arkansas. All face re-election this year and could be politically damaged by rejection of the pipeline. Republican Mitt Romney carried all three states in the 2012 presidential election.
The 1,179-mile pipeline would travel through the heart of the United States, carrying oil derived from tar sands in western Canada to a hub in Nebraska, where it would connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to refineries in Texas.
Canadian tar sands are likely to be developed regardless of U.S. action on the pipeline, the report said, and other options to get the oil from Canada to Gulf Coast refineries — including rail, trucks and barges — would be worse for climate change.
"Approval or denial of any one crude oil transport project ... is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States," the report states.
State Department approval is needed because the pipeline crosses a U.S. border. The Environmental Protection Agency and other departments will have 90 days to comment before State makes a recommendation to Obama on whether the project is in the national interest. A final decision by the government is not expected before summer.
Senate Minority Leader Mitch McConnell, R-Ky., said the report "once again confirms that there is no reason for the White House to continue stalling construction of the Keystone XL pipeline." Addressing Obama, McConnell said: "Mr. President, no more stalling, no more excuses. Please pick up that pen you've been talking so much about and make this happen. Americans need these jobs. "
However, a top official at the Natural Resources Defense Council, an environmental group, said the report gives Obama all the information he needs to reject the pipeline.
"Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate. That is absolutely not in our national interest," said Susan Casey-Lefkowitz, the NRDC's international program director.
The new report comes only days after Obama's State of the Union address, in which he reiterated his support for an "all-of-the-above" energy strategy that embraces a wide range of sources, from oil and natural gas to renewables such as wind and solar power. The remarks were a rebuff to some of his environmental allies who argued that Obama's support of expanded oil and gas production doesn't make sense for a president who wants to reduce pollution linked to global warming.
Obama blocked the Keystone XL pipeline in January 2012, saying he did not have enough time for a fair review before a looming deadline forced on him by congressional Republicans. That delayed the choice for him until after his re-election.
Obama's initial rejection of the pipeline went over badly in Canada, which relies on the U.S. for 97 percent of its energy exports. The pipeline is critical to Canada, which needs infrastructure in place to export its growing oil sands production. The northern Alberta region has the world's third largest oil reserves, with 170 billion barrels of proven reserves.
In a bid to smooth over relations with Canada and other pipeline supporters, Obama quickly suggested development of an Oklahoma-to-Texas line to alleviate an oil bottleneck at a Cushing, Okla., storage hub. Oil began moving on that segment of the pipeline last week.
The 485-mile southern section of the pipeline operated by Calgary-based TransCanada did not require presidential approval because it does not cross a U.S. border.
The latest environmental review, the fifth released on the project since 2010 — acknowledges that development of tar sands in Alberta would create greenhouse gases, a State Department official said. But the report makes clear that other methods of transporting the oil — including rail, trucks and barges — would release more greenhouse gases that contribute to global warming than the pipeline.
U.S. and Canadian accident investigators warned last week about the dangers of oil trains that transport crude oil from North Dakota and other states to refineries in the U.S. and Canada. The officials urged new safety rules, cautioning that a major loss of life could result from an accident involving the increasing use of trains to transport large amounts of crude oil.
Several accidents involving crude oil shipments — including a fiery explosion in North Dakota and an explosion that killed 47 people in Canada last year — have raised alarms.
Keystone XL would travel through Montana and South Dakota before reaching Nebraska. An existing spur runs through Kansas and Oklahoma to Texas.
Follow Matthew Daly on Twitter:

Iranian sanctions lifting – a warning

A lack of clarity could jeopardise the lifting of sanctions against shipowners exporting Iranian crude, a leading P&I club has warned.
Owners and operators may go unpaid if they claim against insurance policies after 20th July, the date temporary relief of sanctions against Iran is due to expire, or be renewed, Norwegian insurance concern Gard said.
The US Office of Foreign Assets Control (OFAC), part of the US Treasury, has declined to clarify whether claims would be recoverable after July even if the incident happened before then, it warned.
The US and other western nations agreed to ease some sanctions against Iran for six months starting 20th January. The relaxation included suspending an EU insurance and reinsurance ban that had barred most international tanker owners from getting coverage to carry Iranian oil.
“Members and clubs should proceed on the basis that beyond 20th July, 2014, clubs will not be able to respond to any claims presented in respect of liabilities arising during the January/July suspension period,” Gard said in a notice to members. “This has the effect of rendering the current suspension of sanctions on insurance cover and in particular P&I cover, of very limited, if any, value to shipowners.”
Gard said that OFAC had advised that it is not presently able to confirm whether the insurance cover provided in respect of liabilities arising during the six month period will be prohibited from responding after 20th July, 2014.
Members and clubs should proceed on the basis that beyond 20th July, 2014 (or any extension of the initial six-month period), clubs will not be able to respond to any claims presented in respect of liabilities arising during the January/July suspension period, Gard said.
Shipowners should be aware that a club is unlikely to be in a position to provide security for a claim in circumstances in which a demand under a club letter of undertaking may be made after 20th July, 2014.
Clubs may also be unable to provide ‘Blue Cards’ to members who enter into contractual commitments, which will include the shipments of Iranian crude, petroleum oil (as defined in Annex 1 to Regulation 2014/42/EU), or petrochemical cargoes, under which clubs could be exposed to liability after this date.
Gard further advised its members not to enter into contracts for oil shipments, which are for a limited period (up to 20th July, 2014) permissible by virtue of the US/EU six-month suspension of prohibitions on the carriage of such cargoes without prior consultation with the club in relation to insurance cover arrangements. 

Wednesday, January 29, 2014

Nigeria’s MEND Rebels Threaten Future Attack on Oil Industry

Nigeria’s Movement for the Emancipation of The Niger Delta rebels plans to begin a violent campaign of disrupting oil output in Africa’s top producer after it attacked a military patrol boat on Jan. 25.
The group also known as MEND claimed responsibility for an attack on a military Joint Task Force patrol in the Nembe-Bassanbiri waterways in Bayelsa State, according to an e-mailed statement from MEND spokesman Jomo Gbomo.
“At the right time, we will reduce Nigerian oil production to zero by 2015 and drive off our land, all thieving oil companies,” Gbomo said. The “relatively insignificant” Jan. 25 attack was “a sign of things to come.”
Attacks including kidnappings and bombing of oil installations by groups including MEND, the main rebel group in the Delta, cut more than 28 percent of Nigeria’s oil output from 2006 to 2009, according to data compiled by Bloomberg. The violence declined after thousands of fighters accepted a government amnesty offer in 2009 and disarmed.
Royal Dutch Shell Plc, Chevron Corp., Exxon Mobil Corp., Total SA and Eni SpA run joint ventures with state-owned Nigerian National Petroleum Corp. that pump more than 90 percent of the country’s oil.
During its planned campaign, “MEND will pay considerable attention to dealing with the occupying Nigerian government forces in the Niger Delta that stand in our way,” Gbomo said.
The official selling price of Nigeria’s benchmark Bonny Light and Qua Iboe crudes is set at $1.90 a barrel more than Dated Brent, according to the state-owned oil company.
To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at
To contact the editor responsible for this story: Dulue Mbachu at

Ground Zero Syria (Part 11): The Illegal Oil Wells of Deir ez-Zor

Ghana bunker industry ‘needs private investment’

Just days after Ghanaian oil and gas provider Ghana Oil (GOIL) announced it is investing $10 million (€7.3 million) for construction of new fuel storage tanks at Takoradi port, local reports have emerged suggesting the company is losing grip on the West African country's bunkering industry.
Since private shareholders Shell Ghana, Total Ghana, and Mobil Oil sold their shares of Ghana Bunkering Services (GBS) to GOIL 13 years ago, the bunkering infrastructure has deteriorated, according to private bunkering firms.
Reports quote one private bunkering firm official as saying: 'GOIL currently needs private bunkering companies to help build more storage tanks since it is always complaining of lack of funds.'
GBS still uses storage tanks built by the private shareholders, and stocks of marine oil in existing storage tanks are reportedly dwindling.
As a result, GBS is said to often find itself unable to deliver the quantities of fuel ordered by the bunkering firms, meaning many fishing vessels are sailing offshore for refuelling and bringing in less revenue for Ghana.
The head of Ghanaian bunker supplier Inter Maritime Services made calls for change in the industry last year, saying it was needed if ship owners' confidence were to be restored.
It is not known how this will affect GOIL's project at Takoradi. - See more at:

Tuesday, January 28, 2014

"Suckers" - Keystone Truth

Become a fan

Billionaire To Air Ad Bashing Keystone XL Pipeline During State Of The Union

WASHINGTON -– Billionaire green investor Tom Steyer and his NextGen Climate Action PAC will run an ad before President Barack Obama's State of the Union address Tuesday night calling for the rejection of the proposed Keystone XL pipeline.
"It's a sucker punch to America's heartland," says the ad, which will air on MSNBC before and after the president's speech. The ad argues China will benefit from the proposed pipeline, which would run from Canada's tar sands to ports in Texas. Chinese companies have made investments in the pipeline, it argues, and much of the oil will be exported after it is refined.
“They’re counting on the U.S. to approve TransCanada’s pipeline to ship oil through America’s heartland and out to foreign countries like theirs," says the ad. "The oil lobbyists and politicians, they take Americans for suckers."
TransCanada rebutted those claims in a statement to Politico, arguing that the contracts for shipping the oil through the pipeline are all with U.S. companies.
Steyer is a former hedge fund manager who was a big donor to Obama's campaign. He is now spending much of his time and money opposing the proposed pipeline.
His group is not the first to raise questions as to whether Keystone XL would benefit countries like China. Some Democrats in Congress have also pushed for legislation that would require oil shipped through the pipeline to stay in the U.S.

Monday, January 27, 2014

Hess plans $650m investment in oil for Ghana, other African countries in 2014

Hess Corporation has announced plans to invest $650 million for oil exploration and production works in its African operations including Ghana this year 2014.
The American oil firm operates in four African countries including Ghana, Algeria, Libya and Equatorial Guinea.
According to its 2014 Exploration and Production budget released January 23, 2014, Hess plans to use $5.8 billion of its budget to drill three appraisal wells and perform one drill stem test on the Deepwater Tano / Cape Three Points Block in Ghana.
Hess said it completed drilling its seventh consecutive successful exploratory well on the Deepwater Tano/Cape Three Points block about 44 miles offshore Ghana in 2013. It added that the wells were drilled by the Stena Drillmax drill ship in a range of water depths between 5,623 feet and 8,245 feet.
Hess indicated that it achieved outstanding drilling performance in terms of drilling time and cost per foot with gross costs averaging $40 million per well for the last three wells, including success case logging.
Of Hess’ $5.8 billion total budget for 2014, $2.85 billion (49 %) is dedicated to unconventional shale resources, with $1.475 billion (25 %) for production, $925 million (16%) for developments and $550 million (10%) for exploration.
“We plan to operate 17 rigs versus 14 last year and to bring 225 new operated wells online in 2014 compared to 168 in 2013,” Greg Hill, President of Hess said in a statement.
By Ekow Quandzie
- See more at:

Nigeria Rebels Claim Attack in Oil-Rich Delta

Rebels are claiming responsibility for an attack on a security patrol boat on a waterway in Nigeria's southern Bayelsa state.
A statement purporting to come from the Movement for the Emancipation of the Niger Delta said late Sunday the attack, though "insignificant," is a reminder of the rebel group's presence in the oil-rich delta. It said the Saturday night attacks in the Nembe-Bassanbiri waterways were carried out by new fighters.
The group threatened to reduce Nigerian oil production to zero by 2015.
Analysts believe the militant group has lost much of its operational capability. Top MEND fighters signed a 2009 deal in which many were paid by the government. Some now provide protection for the international oil companies they used to attack.
But some disgruntled MEND activists threaten continued sabotage.

Thursday, January 23, 2014

Ghana signs $4.9m oil supply chain deal with PYXERA

The Ministry of Trade and Industry on Wednesday formalized a working relationship with PYXERA Global, a partnership that was sealed with the signing of a Memorandum of Understanding in Accra.
The Ghana Supply Chain Development Programme will enable collaboration towards increasing the participation of local small and medium sized enterprises in the supply chains of international oil companies operating in Ghana.
A release from the US Embassy in Accra and copied to the Ghana News Agency, said earlier in 2013, USAID awarded a 5-year $4.9 million grant to  PYXERA Global to implement the programme in the Western Region of Ghana.
It said the programme which is based in Takoradi seeks to increase sustainable participation of Ghanaian small businesses in oil and gas procurements.
“The programme strives to increase capacity of local business service providers relating to sector procurement regulations and standards; create market linkages between the oil and gas sector; and collaborate closely with the  Enterprise Development Center to facilitate the sustainable provision of business development services”, the release explained.
In his remarks, U.S. Ambassador to Ghana, Gene Cretz, noted that, “Today’s Memorandum of Understanding signing is a visible demonstration of the U.S. commitment to ensuring that Ghanaian businesses have the expertise and support needed to bid for and, most importantly, win procurements in the oil and gas sector in Ghana.
“There can be no clearer example of our strongly-held view that local content is a worthy goal and can be mutually beneficial when there is a cooperative process of consultation and shared understandin”, Ambassador Cretz said.
Source: GNA

Wednesday, January 22, 2014

Dangote may buy up Nigerian oil fields

Nigerian billionaire Aliko Dangote

By Chris Kay
DANGOTE Group, controlled by Africa’s richest man, Aliko Dangote, is considering buying Nigerian oil fields as international companies plan to sell onshore assets in the continent’s top crude producer.
The company, which has interests from cement to sugar, needs to secure a supply of crude oil and a "substantial amount of gas" for a $9bn oil refinery and petrochemical complex it plans in southwest Nigeria, says executive director Devakumar Edwin. The group also needs energy for its cement plants in Africa’s second-largest economy, he says.
"We’re seriously thinking of investing in oil blocks both for gas and for oil," Mr Edwin says. "We’ve started talking with some companies who are divesting from onshore."
International oil and gas explorers including Royal Dutch Shell and the California-based Chevron Corporation are selling onshore and shallow-water fields in Nigeria amid persistent violence and crude theft in the oil-rich Niger River Delta, with smaller Nigerian companies taking their place.
Dangote Group believes it can manage the unrest and aggrieved communities with corporate social initiatives, Mr Edwin says.
"We know the terrain much better, we know the risks and we believe the risks can be managed. The primary risk is people blasting your pipelines. I wouldn’t like to go and invest in a block which is totally inland and then I have to start buying inland pipelines."
Armed attacks, mainly in the delta’s swamps and shallow waters, reduced Nigeria’s oil output by 29% between 2006 and 2009, Bloomberg data show. Although the violence eased after thousands of fighters accepted a government amnesty offer and disarmed five years ago, a surge in oil theft by gangs tapping crude from pipelines pushed output to four-year lows last year. Nigeria pumped about 1.9-million barrels of crude a day last month.
Dangote’s complex will include a 400,000-barrel-a-day refinery, a 2.8-million-metric-tonne urea plant and a petrochemical factory to produce polypropylene, used in plastics. The group plans to expand the refinery capacity by 100,000 barrels, Mr Edwin says.
Nigeria is Africa’s most populous nation with about 170-million people. It relies on fuel imports to meet most of its needs due to mismanagement, poor maintenance and ageing equipment at its four refineries. Dangote says its refinery will halve Nigeria’s fuel imports.
Mr Dangote, who is co-chairman of this year’s World Economic Forum meeting in Davos, has seen his wealth climb by $1.1bn, making him the world’s 27th-richest person with a net worth estimated at $24.9bn, according to the Bloomberg billionaires’ index.
Dangote Cement, Africa’s biggest producer of the building material and Nigeria’s largest company, is looking at expanding in three South American countries and has signed a preliminary jointventure agreement with one company, according to Mr Edwin, who is also the CEO of the cement business.
With a market capitalisation of 3.8-trillion naira ($23.8bn), Dangote Cement has three plants in Nigeria and plans to expand in 13 other African countries, bringing total capacity to more than 50-million tonnes by 2016. It is also expanding in Asia and has signed limestone mining rights in Indonesia and Nepal, Mr Edwin says.
Dangote will delay a listing of its cement company’s shares on the London Stock Exchange until at least next year when plants in countries including Cameroon, Senegal, Sierra Leone and Zambia are commissioned, Mr Edwin says.
Dangote Cement shares have declined 2.2% this year to 225.02 naira in Lagos. The stock advanced 71% last year.
The sale will probably happen once investors can "see us as players outside Nigeria, not just as Nigeria champions, and that we can repeat our success story elsewhere", Mr Edwin says.

Gulf Coast pipeline deliveries to average 520,000 bpd in 2014

(Reuters) - TransCanada Corp said on Wednesday its newly opened Gulf Coast oil pipeline will begin delivering 300,000 barrels per day (bpd) of crude from Cushing, Oklahoma, to Nederland, Texas.
Alex Pourbaix, president of the company's pipeline unit, said he expects deliveries will average 520,000 bpd over 2014. The line has a capacity of 700,000 bpd.
The company has already begun construction of a lateral pipeline that will extend the line to Houston. That line is expected to be in service late this year.

Tuesday, January 21, 2014

Venezuela Hasn’t Delivered Home Heating Oil to U.S. Nonprofit

Joseph Kennedy II
Citgo Petroleum, the U.S. unit of state-run Petroleos de Venezuela SA, hasn’t delivered its annual oil supply for Joseph Kennedy II’s home heating assistance program.
“We very much hope that the Venezuelans will come through as they did for so many years under President Chavez’s leadership,” Kennedy, president of Citizens Energy Corp., said in an e-mailed statement today. In the meantime, the Boston-based nonprofit is unable to go forward with deliveries of heating oil to low-income households.
Citizens Energy, which has provided heating oil to about 300,000 households, signed its first contract with Venezuela in November 1979, according to its website. Venezuelan President Hugo Chavez, a self-styled socialist who once called President George W. Bush “the devil,” donated about $500 million in heating oil to the program before he died in March.
A spokesman for Caracas-based PDVSA, who asked not to be named because of company policy, said it continues to participate in the program and is investigating the status of heating oil deliveries.
Venezuela’s oil production has slid steadily since Chavez’s death as financing delays mounted, a Bloomberg survey showed. PDVSA’s ability to offset output declines at mature fields and invest in new projects is slowed by the producer’s increasing financial commitments to the government and delays obtaining financing from partners, Carlos Rossi, president of Caracas-based consultancy EnergyNomics, said in a Dec. 31 telephone interview.

Dedicated Dollars

“The economic situation in Venezuela is very bad and the non-petroleum sector is in desperate need of dollars, causing PDVSA to have to dedicate more money to the Venezuelan central bank,” said Rossi, who is also a former petroleum economist for the Venezuelan Hydrocarbon Association.
Oil accounts for 97 percent of Venezuela’s foreign currency earnings, according to the nation’s central bank.
As residents in the U.S. Northeast emerge from record cold temperatures, “Citizens Energy is ready to move forward with the heating assistance program as soon as the Venezuelans provide us with the oil,” said Kennedy, the nephew of President John F. Kennedy.
To contact the reporter on this story: Anatoly Kurmanaev in Caracas at
To contact the editor responsible for this story: Andre Soliani at

Ghana says expects at least $20 bln in oil investment over five yrs

 GNPC CEO Alex Mould
* Development spending will focus on three offshore fields
* TEN field to attract $1.4 bln in investment this year
* Oil industry spent at least $6 bln developing Jubilee field
ACCRA, Jan 21 (Reuters) - Ghana expects at least $20 billion of investment in its booming oil industry over the next five years, mainly from foreign companies, the head of the state-owned Ghana National Petroleum Corporation (GNPC) said on Tuesday.
GNPC CEO Alex Mould said the money would mainly be spent on developing three offshore blocks -- the Deepwater Tano/Cape Three Points block, the Tweneboa/Enyera/Ntomme (TEN) block and the Sankofa block.
The TEN field will see $1.4 billion in investment this year alone, while 2014 spending plans for Sankofa and Deepwater Tano/Cape Three Points are yet to be determined, he said.
"The only one that we are spending on this year is the TEN project. However, there will be exploration work going on," he told reporters on the sidelines of a conference.
"There will be appraisal work going on, so there will be wells drilled and investment coming in," he said.
At least $6 billion was required over the past five years to develop the Jubilee field, which currently pumps at the low end of 100,000 to 110,000 barrels per day, he said.
British firm Tullow Oil holds a 35.5 percent stake in Jubilee. Other partners include Ghana National Petroleum Corporation, Sabre/PetroSA, Anadarko Petroleum Corp and Kosmos Energy.
Ghana discovered oil in 2007 and began lifting at the end of 2010, an event that boosted gross domestic product growth in the West African state to around 14 percent the following year and raised hopes of a bonanza.
Oil is now the number two source of government revenue in Ghana, a country that also produces gold and cocoa and is rated by investors for its stable democracy and strong growth.

Monday, January 20, 2014

OPEC Outages Cut Its Oil Output To Below 2014 Demand

OPEC sees fast growth in 2014 of 3.5 per cent, up from 2.9 per cent in 2013 as monetary stimulus continues.
OPEC has lowered its oil output further and is pumping less than this year’s global need for its crude, the exporter group said, underlining the toll that outages in Libya and elsewhere are taking on production.
The monthly report from the Organization of the Petroleum Exporting Countries kept unchanged its global supply and demand forecasts, which point to a smaller market share for OPEC in 2014 due to increasing supply from non-OPEC countries.
But OPEC, which pumps a third of the world’s oil, is relatively upbeat on economic prospects, seeing faster growth in 2014 of 3.5 per cent, up from 2.9 per cent in 2013 as monetary stimulus continues.
“Further advances throughout the year could be possible, but some downside risk remains,” said the report by economists at OPEC’s headquarters in Vienna.
For now, OPEC expects demand for its crude oil in 2014 to average 29.58 million barrels per day (bpd), virtually unchanged from the previous estimate.
According to secondary sources cited by the report, OPEC lowered its own output to 29.44 million bpd in December, below this year’s forecast demand.
This suggests there will no surplus crude in the market in 2014 should OPEC keep output at December’s rate, although that is unlikely should output recover in Iraq, Libya and Iran.
Already in 2014, Libya’s output has partly recovered after being curbed for months by protests and strikes and Iran’s deal with Western powers over its nuclear programme has raised the prospect of higher oil exports.
Rising output would require output cuts from top OPEC exporter Saudi Arabia, say analysts. Riyadh pumped at a record rate above 10 million bpd in 2013 to compensate for outages and has since throttled back.
According to secondary sources cited by OPEC’s report, Riyadh cut back its output to 9.62 million bpd in December, while Saudi Arabia told OPEC it raised supply to 9.82 million bpd.
OPEC has yet to see any uptick in global oil demand. It expects world consumption to rise by 1.05 million bpd in 2014, virtually unchanged and less than the increase in supply from countries outside the group.
Another closely watched report on global oil supply and demand, from the International Energy Agency which advises industrialised countries, is due on Tuesday.

Friday, January 17, 2014

Nigerian Governors Asks National Assembly to Investigate Missing N8 Trillion Oil Money

Rep. Farouk Lawan accused of receiving bribe from oil marketers
The governors accuse the Federal Government of financial recklessness and abuse of the Constitution.
The governors of the 36 states of the federation have asked Nigeria's National Assembly to investigate the reported missing of about $49.8 billion, which translates to about N8.5 Trillion naira or the equivalent of two years budget.
The issue of the missing money came to limelight recently after the Governor of the Central Bank of Nigeria, CBN, Sanusi Lamido wrote to President Jonathan intimating him on the issue and asking him to take action.
The governors met under the auspices of the Nigeria Governors' Forum, NGF, at the Rivers State Governor's Lodge, Abuja and their position was made known via a communique read at the end of the meeting by their chairman and Rivers state Governor, Rotimi Amaechi.
Despite claims by the Nigeria National Petroleum Corporation that a huge chunk of the funds said to be missing had been reconciled, the governors insisted "there is no evidence that this amount was paid into the Federation Account or duly appropriated".
"We accordingly call on the National Assembly to institute a comprehensive independent forensic audit by an international reputable firm," they said.
They argued that the recent decline in remittances to state from the federation might not be unconnected with the alleged diversion of revenues.
The governors also accused the Federal Government of breaching the provisions of the Fiscal Responsibility Act 2007 for failing to consult with states before the nation's Medium Term Expenditure Framework, MTEF, was laid before the National Assembly.
They said consultation with states on the MTEF and Fiscal Strategy Paper 2014-2016 did not hold.
The governors also said the National Economic Council , NEC, meeting where issues such as the MTEF would have been discussed last held four months ago.
Sins of the Federal Government
The NGF said financial irregularities relating to public accounting, the lack of compliance with the Fiscal Responsibility Act, 2007, and the recent security breaches were not unconnected with the refusal of the Federal Government to convene meetings of statutory institutions created in the Constitution.
They said meetings of strategic organs of government such as the National Economic Council, NEC, the Council of State, the Nigeria Police Council and that of the Federation Account Allocation Committee, FAAC, have lately been ignored.
"We urge a return to the path of constitutionalism," the governors said.
Condemns Borno, Rivers attacks
The NGF also condemned the recent bomb attack in Maiduguri, Borno state which led to the death of over 40 people and the disruption of a gathering in Port Harcourt by the police in which Senator Magnus Abe was reportedly shot.
The governors also condemned the recent attack on the father of Governor Rabiu Kwankwaso of Kano state.
"We also condemn the flagrant violation of the rights of citizens to freely assemble in Rivers State by the Nigerian Police; the excessive use of force against unarmed citizens in the exercise of their fundamental rights and the shooting of Senator Magnus Abe," the NGF said.
The meeting was chaired by Mr. Amaechi and had in attendance Governors Murtala Nyako of Adamawa, Adams Oshiomhole of Edo, Kayode Fayemi of Ekiti, Babatunde Fashola of Lagos, Abdulfatah Ahmed of Kwara, and Rochas Okorocha of Imo.
Governors Kwankwaso, Abdulaziz Yari of Zamfara, Sule Lamido of Jigawa and Tanko Almakura of Nasarawa states were represented by their deputies.

Nigeria destroys 1 951 illegal oil refineries, arrests 1 857 in 2013

Nigerian Navy boats.
The Nigerian Army's Joint Task Force (JTF) in the Niger Delta says it destroyed 1 951 illegal oil refineries, 69 606 pieces of oil bunkering equipment, 1 873 surface tanks, 1 443 large wooden boats, 103 barges and 82 tanker trucks during anti-oil bunkering security operations in 2013. 1 857 suspected crude oil thieves were arrested.

Former Nigerian Chief of Naval Staff Rear Admiral Dele Ezeoba (this week replaced by Rear Admiral Usman O Jibrin) said the naval component of the JTF's 'Operation Pulo Shield' conducted a total of 1 025 anti-oil bunkering patrols, during which 82 pirates and sea robbers were shot dead by security forces in 2013.

He said the navy responded to 91 alerts of suspected sea robbery and piracy, leading to the arrest of 183 suspects who were handed over to the police and the Nigerian Civil Defence Corps for trial.

The commander of the Nigerian Army contingent of the JTF, Major-General Bata Debiro said his force also conducted a wide range of successful operations which were aimed at stopping oil bunkering activities, protecting oil facilities and installations and securing the local and international shipping lanes which pass through the country's waters.

“In the year under review, JTF successfully conducted several land, maritime and air operations against illegal oil bunkering and refining activities, pipeline vandalism, armed robbery and sea robbery. The taskforce also conducted anti-kidnapping operations, cordon and search, destruction of re-emerging militant camps and provided security to oil and gas companies in the past twelve months.

"Over 42 armed robbers were killed and a total of 183 suspects were arrested, 40 sea pirates were also killed, 41 arrested and all manners of assorted arms and ammunition recovered from January to date.”

JTF commander Major General Bata Debiro said 6 soldiers serving with the JTF were killed in action in the same period. Three of the soldiers were killed during gun-battles against pirates in the Andoni area of Rivers State while three others drowned in a river in the Akassa area of Bayelsa State.

He noted that cases of kidnapping were on the rise across the Niger Delta, adding that 23 kidnappers were shot dead and 236 were arrested by the JTF within its Area Of Operation (AOR) in the course of 2013.

"Additionally, 39,760 drums of illegally refined products, 570 pumping machines and 75 outboard engines used as part of the apparatus which facilitates oil theft were seized and destroyed. 46 vessels of various sizes and capacities were also impounded.

"Although limited incidents of pipeline vandalism still occur in the (Niger Delta) region, JTF operations have drastically reduced their occurrence. Those that still occur are mostly in remote areas of the creeks, carried out at night by criminal gangs who take advantage of the JTF's limited accessibility of the difficult terrain," Debiro said.

Meanwhile, the Nigerian Navy has installed a Regional Maritime Awareness Capability Centre (RMAC) system made up of eight automated, camera-equipped surveillance towers in the waters off its coast as it steps up measures to tackle piracy and crude oil theft within its maritime domain.

The equipment, which was sourced from Japanese company Furuno, uses high frequency radio and long-range cameras to detect all ships within a range of 48km from the observation tower.

Ezeoba said information collected from the surveillance towers is beamed to a central naval intelligence room where it is checked against ships' registration, flag and other essential identity information.

"From the domain awareness centre we can see ships coming or leaving our maritime space. It also gives us the ability to ascertain the actual threat the (approaching) vessel poses."

Four of the surveillance towers are located in Lagos, one each at the Bonny and Brass crude oil export terminals (Niger Delta), one in Yenagoa and one in Ibaka in the eastern Akwa Ibom state.

Thursday, January 16, 2014

Despite year end spike, miserable earnings for VLCCs in 2013

Ian Middleton
from  London
The spike in VLCC rates towards the end of 2013 did little to improve the outturn for this class of vessels for the year as a whole. Average earnings for VLCCs, according to Clarksons Research, averaged a miserable $16,009 a day for the year against $18,296 the year before.
Suezmaxes were similarly down though as it happens they are earning shedloads at the moment, while aframaxes were marginally up at low levels, but are currently in the money to the tune of $44,000 a day on average.
The one piece of good news was that VLCC demolition was the highest last year since the 2003 peak just before the double hull regulations came in. Some 22 VLCCs averaging 18.9 years went to scrap including a vessel of just 14 years, as opposed to 14 VLCCs the previous year.
Trouble is there has been a wave of new tanker orders in 2013 with 12% of the VLCC feet on order,10% of the suezmax fleet and 11.7% of the aframax fleet. This is not as bad as the 20% plus figures in the larger dry bulk fleet but is not good, and has lead commentators to forecast even greater levels of tanker scrapping this year.
Despite the dire year asset prices have held up reasonably well with a 6% increase in newbuild prices for VLCCs and 16% in 10-year-old tonnage according to McQuilling Partners, thanks to the late year rate surge, though five year old tonnage was off 4% on 2012. Suezmaxes did not fare quite so well with a drop off of 4%, with older tonnage suffering worse.
Meanwhile January has started with VLCC earnings dropping rapidly from December highs to average earnings of under $30,000 a day but suezmaxes continue to storm ahead with earnings of upwards of $70,000 a day. Aframaxes, though weakening a bit are still going strong at upwards of $40,000 a day.

Wednesday, January 15, 2014

IHS study forecasts US economic boost from future oil and gas investment

Investment of $890 billion (€655 million) over the next 12 years in oil and gas transportation and storage infrastructure will have a major impact on the US economy, according to a new study by information and analytics firm IHS Global.
IHS notes that dramatic increases in domestic crude oil and natural gas production are resulting in a continuing period of notable investments that include pipelines, rail, ships, storage facilities, refineries and facilities to liquefy natural gas.
Between 2014 and 2020, the study predicts, an average of more than $80 billion will be invested annually in petroleum infrastructure.
After 2020, that investment will moderate but the research firm expects direct capital investment by 2025 will still be nearly $60 billion.
These infrastructure investments come with the development of the Gulf Coast and the Eastern seaboard as major hubs for storage, to which domestic oil and gas is being moved from the centre of the country.
IHS forecasts about 60% of the investment will be in crude oil and natural gas gathering systems and direct production support facilities, driven by 'wide oil-to-gas price spreads'.
The study says these investments will likely shift back to natural gas as prices recover.
The study predicts that infrastructure investment will contribute $94 billion to US GDP each year from 2014 to 2025. - See more at:

Tuesday, January 14, 2014

Ghana Oil Company Limited : GOIL promises to remain among the best

GNA – Mr Patrick Akorli, the Managing Director of Ghana Oil Company (GOIL), said on Monday that the Company would continue to implement policies that would enable it to remain among the best in the country.
"Since the Ghana Club 100 was introduced, GOIL has always been in the top 15. The High Street Journal has also recognized GOIL as one of the outstanding companies in Ghana," he told the GNA in an interview.
Mr Akorli said United States Peace Corps mentioned the Bolgatanga GOIL Service Station as having contributed to its work in the Upper East Region and the company has maintained its market leadership in gasoline, premix, LPG, bunkering and lubricants since 2002.
"We achieved a lot of recognition last year both locally and internationally and we are going to intensify our output this year," said Mr Akorli who is also known as Togbe Adza-Nye IV. Dutrofia of Ziavi in the volta Region.
He said GOIL was providing mechanized bore holes for deprived communities across the country as part of its corporate social responsibility, adding that last year the company spent over GHȻ200,000.00 on mechanized bore holes in eight communities in the Volta, Eastern and Greater Accra regions.
Mr Cyril Opon, Corporate Affairs Manager, told the GNA that GOIL would continue to improve and provide varieties in terms of its products and service delivery through product differentiation.
"In the region of fuel oils it is about combining best breeds of additives with the normal fuel oil. Our experienced technical team is the brain behind the innovations. They are able to take advantage of global research findings to create products of quality to our customers," he said.
Mr Opon said last year GOIL introduced specially formulated lubricants for commercial and private cars to protect engines against oxidation, rust and corrosion.
"The non-toxic and biodegradable lubricants with special additives are to ensure that the physical and chemical stability of the product remains unchanged even after prolonged exposure to mechanical and thermal stresses," he said.
(c) 2014 Ghana News Agency (GNA) Provided by, an company

Monday, January 13, 2014

China’s Bold $10 Billion Investment in Nigerian Hydrocarbons

This article was written by -- the leading provider of energy news in the world
Developers in the pursuit of commercially available oil found it in Nigeria in 1956, with the country's first oil field beginning production in 1958. The last 56 years have seen Nigeria oil production surge to 2.524 million barrels per day and the country joining OPEC, but the last five decades have also seen most Nigerians denied the benefits of the nation's cash inflow, as a succession of corrupt military and civilian administrations raided the income, by some estimates of over a half trillion dollars.
However, the gravy train is unlikely to stop soon.
As of 2000, oil and gas exports accounted for more than 98 percent of export earnings and about 83 percent of federal government revenue, as well as generating more than 14 percent of its GDP. The U.S. government's Energy Information Administration estimates that Nigeria's oil reserves at between 16 and 22 billion barrels, adding, Nigeria is the largest oil producer in Africa and was the world's fourth leading exporter of LNG in 2012...   major international players in Nigeria's oil and natural gas sectors are Shell, ExxonMobil, Chevron, Total, and Eni. International oil companies participating in onshore and shallow water oil projects in the Niger Delta region have been affected by the instability in the region. As a result, there has been a general trend for IOCs to sell their interests in onshore oil projects.  Nigeria has the second largest amount of proven crude oil reserves in Africa, but reserve estimates have been stagnant as exploration activity has been low. Rising security problems coupled with regulatory uncertainty have contributed to decreased exploration activity."
Well, never mind the experiences of Shell, ExxonMobil, Chevron, Total, and Eni, Chinese companies are willing to brave the Nigerian new frontier and invest onshore there. On 10 January, the federal government in Abuja approved a $10 billion in Chinese oil exploration in the Bida Basin.
According to Niger State commissioner of mining and mineral resources Engr Abubakar Baba Jibreel, "The Department of Petroleum Resources (DPR) has started the study of the presentation and a five-man Chinese delegation has met with the experts from the DPR and the experts are scheduled to visit the state before the end of this month."
Jibreel noted that while five foreign firms have indicated interest to invest in the oil exploration in the basin, a Chinese firm has agreed to invest over $10 billion in the exploration and exploitation of oil and gas in Bida Basin, commenting, "We want to tell those who doubt that there is oil in Niger State to stop and join in the effort to make it flow. In fact, it is from Niger State that oil flowed to Niger Delta where we are exploiting it today. We should not also forget that if Chad and Sudan can have oil in large quantity, it is more possible to have oil in the northern part of Nigeria."
Even better, the unnamed Chinese firm has indicated its interest to also construct a refinery in Baro, Niger State.
The good news is that laboratory studies for hydrocarbon deposits in the Bida Basin revealed that there was about a 70 percent gas and 30 percent oil composition.
The bad news is, as always, the current Nigerian environment, rife with corruption.
Will China be able to surmount the issues of production and corruption that have tormented foreign oil companies up to now? No doubt, a $10 billion potential investment when European and American firms are giving Nigeria a pass will produce a great deal of influence for Beijing.
Can China surmount the problems that have dogged Western oil firms operating in Nigeria? Given Beijing's deep pockets, if such difficulties can be bought off, then China's options are the best of any energy firms entering the chaotic Nigerian market for some time.

Imagine a company that rents a very specific and valuable piece of machinery for $41,000… per hour (that’s almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company’s can’t-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we’re calling OPEC’s Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock… and join Buffett in his quest for a veritable LANDSLIDE of profits!

Ghana's oil output could slip without positive investment decisions on promising new discoveries

Business Monitor examines key trends in the oil & gas sector in Ghana and provides short- and long-term forecasts for the industry in the newly published Ghana Oil & Gas Report.
Business Monitor has just released its latest findings on Ghana’s burgeoning Oil & Gas sector in its newly-published Ghana Oil & Gas Report.
As the Jubilee field, which secured Ghana's place as a West African oil exporter, approaches peak output of 120,000 barrels per day following a series of technical problems, the nascent producer is increasingly looking to continue the boom as interest in the region's untapped deepwater potential remains high. Approval of the TEN project will see Ghana's second major oil development come online from late 2016; however, Business Monitor see risks that without a positive investment decision on a number of promising new discoveries under appraisal and/or new finds, the country's overall output will begin to gradually slip from the end of the decade. Although the Jubilee gas project now seems on track, tensions between Eni and the government over the Sankofa project will result in delays to Ghana's push to bring online more gas. This could see the government turn to liquefied natural gas to meet the shortfall in the wake of a precarious outlook for imported gas via pipeline from Nigeria.
Examples of the main trends and developments discussed in the report:
■ After a troubled start, output from the Tullow Oil-operated Jubilee field is on track to reach the target production rate of 120,000 barrels per day (b/d) by the end of 2013. According to Tullow's H213 operational update, output was averaging 110,000b/d and remained on track to reach the plateau rate of 120,000b/d the end of the year. With operators Tullow and Kosmos noting that current well deliverability at Jubilee exceeds the current capacity of existing infrastructure, further development may be required to allow for maximum monetisation of the field. Further development of Jubilee poses upside risk to Business Monitor’s forecasts, with plans designed to extend the fields plateau.
■ In another sign of strength for Ghana's oil sector, regulatory approval was given to the Tullow-led Tweneboa-Enyerna-Ntomme project (TEN), which will see peak output of 80,000b/d (less than the 100,000b/d initially planned) and is due to come online by late-2016. Tullow is in the process of seeking a buyer for up to 20% stake by Q114 in order to fund the US$4.9bn project.
■ This increased upstream activity will support rising production, which Business Monitor expect will grow from around 110,000b/d in 2013 to 243,000b/d by the end of their forecast period in 2022. However, these volumes assume the contribution of new supplies beyond fields currently approved, namely liquids from Eni's Sankofa development. With the introduction of new supplies from fields under appraisal such as the Mahogany, Teak, Akasa and Banda (MTAB) or the Cape Three Points Block, Business Monitor see risks that output will begin to fall from the end of the decade. There is added downside risk to this view from the prospect of a faster-than-expected rate of decline at the Jubilee field.
■ New production will be important, in line with a strong macroeconomic picture; oil demand is expected to rise, which will in turn reduce the amount of oil available for export, hitting earnings. However, with added supplies, should Ghana fail to invest in its downstream, it will continue to rely on expensive imports of refined products from abroad as the ageing refinery at Port Tema falls short of domestic demand.
■ A deal announced in late September would see Tema upgrade aging equipment in order to increase capacity from 45,000b/d currently to 60,000b/d by 2015. Current utilisation is 60% according to Tema officials, but the facility has struggle in the past given financing and equipment woes since 2009. Ghana continues to seek private investment, with the government acknowledging it alone will be unable to finance operations. There is a chance capacity could rise to as much as 245,000b/d over the long term if new facilities come online toward 2018. An absence of firm plans prevents inclusion of new capacity in Business Monitor’s current forecast.
■ Business Monitor see that the outlook for gas is promising, but as indicated by recent delays to the US$700mn project to capture gas from the Jubilee field, there are a number of risks to developing the necessary infrastructure to monetise gas, given the primary target for operators is liquids. After Sinopec halted work and threatened to completely pull-out of the Jubilee gas project following a row over missed financial obligations by the Ghanaian government, Business Monitor pushed back first gas to 2014. While the project is likely to come online next year, they see risks to future phases from both a lack of funds and the prospect that greater volumes of gas will be directed to increasing recovery rates from the Jubilee oil field as output plateaus.
■ While Business Monitor see scope for Ghana to eliminate its reliance on imported gas, uncertainty regarding supply and demand calls leads them to maintain a small import requirement fed by the WAGP for the duration of their 10-year forecast period.

Friday, January 10, 2014

St Lawrence shipping affected by deep freeze

The severe weather affecting North America has disrupted shipping along the St Lawrence River.
Inchcape Shipping Services (ISS) advised that due to the extreme cold weather, which settled over the eastern North American continent last weekend, there were heavy delays in shipping operations dating from 4th January, 2014.
The delays were primarily caused by ice build-up between Lanoraie and the Three Rivers in the St Lawrence River.
Three Canadian Coastguard icebreakers have been working 24/7 in the area since, but no ships have been allowed to depart Montreal outbound.
There were five ships docked at Montreal awaiting favourable ice conditions in order to depart and Canadian Coast Guard Ice Operations had advised that shipping may resume for departures at 06.30 hrs local time on 8th January, 2014.
In addition, there were 12 ships at Three Rivers and Quebec awaiting favourable ice conditions in order to transit to Montreal, earlier this week.
ISS said that reports confirmed that one tanker had broken her moorings and drifted aground in the Sorel area, but that the vessel was recovered and was alongside in Sorel, awaiting inspections.
Laurentian Pilotage Authority had advised on Tuesday that three ships have been authorised to transit outward and four ships have been authorised to transit in bound.
All other ships had to wait for the arrival of a stronger icebreaker for the Quebec Bridge passage. All tankers were delayed below Quebec.
The severe weather is expected to ease this weekend resulting in a rise in temperatures, US reports said.