Tribe seeks refinery investors

http://bismarcktribune.com/news/local/tribe-seeks-refinery-investors/article_6f10dd44-03ff-11e1-8251-001cc4c03286.html

LAUREN DONOVAN | Bismarck Tribune

More than a decade after it was originally proposed, the Three Affiliated Tribes are finally calling for proposals to finance an oil refinery just inside the reservation's boundaries near Makoti.

If built, it will be the first refinery constructed in North Dakota since the former Mandan Refinery, now the Tesoro Refinery, went into operation in 1954.

The call comes shortly after the Environmental Protection Agency issued a record of decision this summer, approving the tribes' plan to process 15,000 barrels of Bakken crude daily into a variety of petroleum fuels.

Refinery project director Richard Mayer said the tribes are committed to building an exemplary clean fuels project with high environmental and safety standards that maintains clean air and water for the region and state.

The tribes are looking for a financial proposal that will cover an estimated $350 million to $400 million to build the refinery in four modular stages, the first stage with a capacity of 6,000 barrels of oil.

The tribes hope to retain 100 percent ownership, but will look at the potential for partnerships or joint ventures depending on the financial proposals that come in. Mayer said the tribes have been contacted by a dozen or so potential investors over the past year. While he wouldn't name them, he said anyone familiar with Bakken oil companies would likely recognize company names.

Mayer said if financing can be arranged, bids could go out this winter with construction startup in spring. He said the refinery could go on line as soon as summer because of the expedited modular construction style. All four stages and full capacity would be reached by late 2012, or 2013.

Footings for the flare stack were poured this summer at the 450-acre site just outside the reservation.

Mayer said the project has taken a long time and credits the tribal business council and Chairman Tex Hall for developing a government-to-government attitude to get the refinery back on a fast track.

"This has been Chairman Hall's priority one," Mayer said.

Hall was elected chairman again last year, after losing his re-election bid. The refinery was proposed in 2000 during his first term of office. The EPA started its environmental evaluation in 2003.

Mayer said the refinery is expected to be a major economic player for the reservation and surrounding area and will employ up to 70 full-time operators and supervisors when it's in full development. Process operations training for workers will potentially be available through Fort Berthold Community College on the reservation.

The tribes hope to have the refinery site land put into federal trust status, so that it's treated for tax and jurisdiction purposes just like other tribally-owned land. That decision has not yet been made by the Department of Interior and Bureau of Indian Affairs.

He said the oil will be delivered to the refinery by a pipeline stemming off the main Enbridge line, which travels out of the Bakken region as far as Berthold before turning north.

The decision to process Bakken crude, rather than semi-refined Canadian crude, as originally proposed, was made in 2010.

In its record of decision, the EPA said the change from Canadian to Bakken crude did not require the writing of a supplemental environmental report because they're similar fuels.

The EPA did decide - a change from its draft environmental statement - that the project will require an air quality permit under the Clean Air Act Prevention of Significant Deterioration of Class I increments before the refinery goes into operation.

The EPA will issue a National Pollutant Discharge Elimination System permit for the project effective in October. Waste process water and potentially contaminated runoff will have to be treated before it can be discharged and the permit requires storing potentially contaminated water in tanks, not ponds, prior to treatment.

The deadline for financing proposals is Dec. 1.

Valero 3Q Net Quadruples On Higher Refining Throughput Margin

http://www.foxbusiness.com/industries/2011/11/01/valero-3q-net-quadruples-on-higher-refining-throughput-margin/

By Ben Lefebvre

Dow Jones Newswires

-Valero earnings quadruple amid higher refining margins

-Fourth quarter looks to slow amid higher U.S. oil price

-Refining profits look to remain at pre-recession levels

HOUSTON -(Dow Jones)- Valero Energy Corp.'s (VLO) third-quarter earnings quadrupled because of higher refining margins, but the good times may be slowing down, the company said Tuesday.

Valero and other refiners were able to take advantage of crude oil in the Midwest being at record discounts to that found on the coasts, allowing them to buy oil cheap and sell finished product at prices closer to their higher-cost competitors. Operating earnings at its refining business more than doubled as the profit margin per barrel rose to $13.24 from $8.13 a year earlier.

Valero reported a profit of $1.2 billion, or $2.11 a share, up from $292 million, or 51 cents, a year earlier on revenue of $33.7 billion. Earnings from continuing operations were 53 cents in the year-earlier quarter. Analysts polled by Thomson Reuters had most recently forecast earnings of $1.94 on revenue of $31.8 billion.

Although Valero's earnings are at their best since 2007, the outlook for the fourth quarter isn't as strong. Global fuel demand remains strong, but U.S. oil prices have risen closer to their European counterpart Brent, signaling that refining margins might recede from current record highs, said Valero Chief Executive Bill Klesse.

"While fourth-quarter refining margins have declined from the high levels of the second and third quarters and we are experiencing very high price volatility, crude oil prices are in a range that is supportive of global demand growth," Klesse said.

The quarter also saw Valero start production at the refinery in Milford Haven, Wales, that it bought from Chevron in a deal valued at $1.75 billion. Between that refinery addition and the restart of its refinery in Aruba, Valero added 389,000 barrels a day of production in the quarter.

Despite stagnant U.S. fuel demand, refiners have been able to parlay favorable oil pricing into profits at home and increase their export sales into Latin America, where refinery troubles have stalled production even as growing economies foster fuel demand.

Although the fourth quarter looks to be slower, Valero and other refiners maintain should see their profits remain at pre-recession levels, said Brian Youngberg, analyst at investment bank Raymond James.

"Relative to what we've seen in last two or three years, everything improved: refining margins, increased volumes and even ethanol had a record quarter," Youngberg said. "But no one should expect the fourth quarter to keep pace."

-Melodie Warner contributed reporting

Gaddafi: Nigeria's oil production quota may be affected - Ngama

http://www.thenationonlineng.net/2011/index.php/news-update/24829-gaddafi-nigeria-s-oil-production-quota-may-be-affected-ngama.html

The Minister of state for Finance, Yerima Ngama said in Abuja that the fall of Muammar Gaddafi's government in Libya may affect Nigeria's oil production quota and the 2012 budget.

He also stated that Ghana’s entry into the comity of petroleum producing countries could impact negatively on the nation's oil production quota.


Ngama gave this indication while defending the 2012 Medium Term Expenditure Framework (MTEF) before the House of Representatives Committee on Appropriation in Abuja.


The News Agency of Nigeria (NAN) reports that the Committee had on Friday, October 28, said that unless the Minister of Finance, Mrs. Ngozi Okonjo-Iweala appeared before it to defend the MTFF, it would not receive the 2012 Appropriation bill from President Goodluck Jonathan.
Ngama said that the 2012 budget was initially premised on $75 per barrel, but was pruned down to $70 per barrel, while the exchange rate was fixed at $1 to N153.

He said that the exchange rate was arrived at through the combination of extrogenous factors and information put together by relevant fiscal authorities.

The minister said that the Central Bank of Nigeria, as the nation’s apex bank, allied with the projection of exports, imports and global financial trends.

‘’External forces that can influence the exchange rate are beyond the control of the CBN, it is better to allow fiscal authorities to make their assumption because of the information at their disposal. ”
On the 2012 fiscal outlay, he stated that N794 billion had been set aside to service domestic debts, which stood at N1.1 trillion.
He added that the 2012 budget might not be different from the 2011 budget that was deficit financed, adding that substantial part of revenue had been set aside for deficit financing.

We enjoin our readers to send their reports, including pictures to ination@thenationonlineng.net

US crude oil stocks should increase 1.1 million barrels: analysts

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6631462

New York (Platts)

Weekly oil data from the US Energy Information Administration and the American Petroleum Institute should show a 1.1 million barrel rise in US commercial crude inventories for the week ended October 28, analysts polled by Platts said Monday.

API is scheduled to release its weekly data at 4:30 p.m. EDT (2030 GMT) Tuesday. EIA's weekly oil statistics will be released at 10:30 a.m. EDT (1430 GMT) Wednesday.

Stocks are expected to rise but at a much slower pace than reported the week to October 21, where crude stocks surged 4.735 million barrels.

However, based on the five year average for crude oil stocks, a more than 1.1 million-barrel draw could be seen.

Tom Pawlicki of MF Global is expecting near unchanged crude inventories following the previous week's large increase as imports are expected to slow.

US refinery utilization is expected to be 0.1 percentage point lower at 84.8% of capacity, based on EIA figures.

"The trend [for imports] is generally lower through the remainder of the year," Pawlicki said. He noted that a decline in inventories is also expected near year-end due to tax issues and the [Last In-First Out] accounting system, "but that may be less of a problem now, as prices and inventories are only slightly higher than they were at the start of the year."

Peter Beutel of Cameron Hanover said the reports are expected to be influenced by crude oil imports, which have been "volatile" have gotten into the act, with last week's increase of 1.452 million b/d, for the week to October 21, preceded by a decline of 1.165 million b/d after a build of 386,000 b/d and a decline of 1.002 million b/d.

"Volatility has spread to the [Department of Energy] figures, apparently," he said.

US gasoline inventories are expected to fall on average about 1.5 million barrels, which is above the five-year average that shows a more modest 427,000-barrel decline.

Domestic distillate stocks should also fall, according to analysts, by 2.2 million barrels, as demand during the winter-time weather increases.

--Alison Ciaccio, alison_ciaccio@platts.com

Crude Oil Gains, Heads for Biggest Monthly Increase Since 2009

http://www.businessweek.com/news/2011-11-01/crude-oil-gains-heads-for-biggest-monthly-increase-since-2009.html

By Paul Gordon

(Bloomberg) -- Oil rose, heading for the biggest monthly gain in more than two years, on speculation European efforts to contain the region’s sovereign-debt crisis will boost economic growth and demand for commodities.

Futures gained as much as 0.5 percent today and are up 18 percent in October, the biggest increase since May 2009. European Central Bank President Jean-Claude Trichet called for “swift implementation” of an agreement last week on measures to stem Europe’s debt crisis if financial stability is to be restored, Germany’s Bild Zeitung reported. A report this week may show Chinese manufacturing accelerated this month. Iran said global supply and demand of crude is balanced.

Crude for December delivery was at $93.37 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 7:20 a.m. Singapore time. Prices dropped 0.7 percent to $93.32 a barrel on Oct. 28, paring the biggest weekly increase since February.

Brent crude for December settlement was little changed at $109.90 a barrel on the London-based ICE Futures Europe exchange. The contract traded at a premium of $16.57 a barrel to New York futures, the smallest differential since July 4. The premium reached a record $27.88 at the Oct. 14 close.

China’s manufacturing growth accelerated for a third month, a report tomorrow may show. The purchasing manager’s index probably rose to 51.8 from 51.2 the prior month, according to the median estimate in a Bloomberg survey of economists before the report by the National Bureau of Statistics and the Federation of Logistics and Purchasing. China is the world’s second-biggest user of oil, after the U.S.

Iran’s Governor to OPEC, Mohammad Ali Khatibi, said supply and demand in world oil markets is balanced and he sees no need for an emergency meeting of the producer group, according to the state-run Iranian Students News Agency yesterday. The Organization of Petroleum Exporting Countries plans to meet next on Dec. 14 in Vienna.

--Editors: Ovais Subhani, James Poole

To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net

Nigeria seizes oil thieves' boat, arrests 2

http://af.reuters.com/article/nigeriaNews/idAFL5E7LV3C320111031

* Oil theft costs Nigeria hundreds of millions of dollars

* This month 46 people arrested, nine jailed so far

YENAGOA, Nigeria(Reuters) - Nigerian authorities said on Monday they had arrested two oil thieves and seized a boat used by them to sell illegally refined fuel along a river in the oil-rich Niger Delta.

Nigeria is Africa's largest crude oil exporter but its production capacity has been slashed by thieves drilling into pipelines passing through winding creeks and waterways in the vast delta.

The underground industry is thought to be worth hundreds of millions of dollars a year.

"In an ongoing effort to dislodge illegal refinery operators and crude oil thieves in the Niger Delta region, operators of the Joint Task Force impounded another vessel engaged in the lifting of illegally refined petroleum products," local security forces said in a statement.

It added that the boat was "arrested with a crew of two" and found with "5,000 tons of illegally refined diesel, four ... storage tanks with capacity of 7500 litres each, three drums containing 250 litres of illegal diesel each."

Nigeria's military said last Monday it had detained a small oil tanker and arrested 46 people trying to ship illegally refined oil products.

Seven Nigerians and two Ghanaians were each sentenced to 90 years in prison for oil theft and illegal refining this month. (Reporting by Tife Owolabi; Writing by Tim Cocks; Editing by Roger Atwood)

Ghana will be short-changed with $3b Chinese loan – NPP

http://www.ghanabusinessnews.com/2011/09/28/ghana-will-be-short-changed-with-3b-chinese-loan-npp/

The Minority New Patriotic Party (NPP) said their abstinence from the $3-billion Master Agreement loan, was without malice but to caution government that the nation would be short-changed if government went ahead with the agreement.

The Minority said the agreement had two major illegalities, which made Parliament infringing the provisions of the Petroleum Revenue Management Act 2011 and the Government going against International Monetary Fund’s (IMF) condition that put a ceiling to Ghana’s borrowing not exceed $800 million.

Addressing a press conference at the NPP Headquarters in Accra on Tuesday, the Minority said the NPP was not against the projects to be undertaken with the loan.

“Unquestionably the projects to be covered by the loan are worthwhile for the country,” it said and added that various governments during the Forth Republic including the Kufuor Administration had indicated their desire to embark on these projects in one form or the other through annual budget proposals, manifestos, Cabinet memos and feasibility studies.

The Minority argued that the agreement contravened section 18(7) of the Petroleum Revenue Management Act 2011 (Act 815).

Minority Spokesperson on Finance Dr Osei Akoto quoted the clause: “The annual budget Funding Amount may be used as collateral for debts and other liabilities of government for a period of not more than ten years after the commencement of this Act.”

He said, “Another source of concern for the Minority is the country’s current agreement with the IMF and the World Bank which precludes the country from borrowing more than $800 million non-concessional loan”.

The Chinese loan, he said, “it is a violation of the IMF conditionality, which the National Democratic Congress (NDC) government has agreed to be imposed on us,” and questioned whether the economic management was not aware of this.

Dr Akoto noted that government did not made the loan document available even though the presiding Speaker of Parliament, Mr Doe Adjaho, First Deputy Speaker, saw the wisdom in the stand of the Minority and ruled that the agreement be made available.

He indicated that the first schedule of the Master Facility Agreement (MFA) stated that: “There is a requirement that the government of Ghana shows evidence that the Parliament of the Republic of Ghana approved and authorize the borrower’s entry into the finance document.”

Dr Akoto said a proper totaling of the cost of the projects to be financed by the loan was $3.25 billion, but government was expected to provide 15 percent counterpart funding, which translated to $450 million making the total resource available to $3.45 billion.

“In the event there is going to be excess funding of $200 million which is not accounted for anywhere, the loan document does not mention it, the Cabinet memo does not mention it and the Majority side of the Finance Committee did not address itself to it in its haste to do the bidding of the executive,” he said.

He questioned what would the $200 million be used for or if it would be used as a hidden booty.

According to him, in less than three years of President Atta Mills’ rule, Ghana’s debt had increased to $15.9 billion, adding that total approved loans was a little over $10 billion out a total of $18 billion Ghana’s debt.

Dr Akoto indicated that the commitment fee of one percent was $30 million in the loan agreement brought before Parliament, which was on the undrawn balance (the balance of the loan that remains in the account of the Chinese Bank).

“The diligent objection of the NPP led to the Speaker to rule for the amendment from a flat one percent every year, which would have amount to $375 million to $1 percent on the undrawn balance thus saving the country millions of dollars,” he said.

According to him, the Chinese requested additionally that Ghana committed to sell them oil to offset the loan and required the Ghana National Petroleum Company (GNPC) to commit to the sale of the oil to the Chinese Off-Takers.

He accused the NDC government for not doing due diligence in terms of how much money was needed to implement the identified projects, adding “no proper feasibility has been conducted and that is why government cannot provide any reasonable estimates.”

He noted that the Coastal Fishing Habour and Landing Sites Project according to government required between $15 million and $250 million creating a gap of $100 million.

The Eastern Corridor Multi-Modal Transportation Project the request was $150 to $200 million with a gap of $50 million while the Accra Metropolitan ICT-Enhance Traffic Project the request was $150 to $500 million, which had a gap of $350 million.

The Minority also cited government for double payment of contracts arguing that the loan agreement covered the Accra Metropolitan ICT Enhanced Traffic Management Project aspects of the Nsawam road, the Dodowa road and the La Beach road were provided for in the loan agreement.

He said the Finance and Economic Planning Minister Dr Kwabena Duffuor raised bonds and contractors on these same roads had been paid some monies from the amount raised.

“The Minister ought to have come to Parliament for approval to raise the bonds,” adding that the Minister must brief Parliament about the current state of indebtedness to the contractors now that he sought to use part of the Chinese loan to cover the same programmed road.

He noted that if this was not done, Ghanaians would be tempted to conclude that double payment could be effected for same work.

“The $3 billion Chinese loan fails in these critical assessments and that is why the Minority did not vote for the loan and we insist in its current form, the nation is going to be short-changed” he said.

“If government remains stiff-necked and goes ahead to effect payments to whoever knowing that the nation cannot access the money now then we will be right to suspect fraud and corruption and will not hesitate to probe this when we assume the reign of government.”

Source: GNA