Dangote reiterates support for PIB

 

 

http://www.tribune.com.ng/news2013/index.php/en/business-package/2012-10-29-11-35-35/energy/item/25524-dangote-reiterates-support-for-pib.html

 

Dangote Group of companies has called for quick passage of the Petroleum Industry Bill (PIB) in order to speed up the reforms of the oil and gas sector.

 

President of the Group, Alhaji Aliko Dangote, who spoke during the 3rd Quadrennial Delegates Conference (QDC) of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) in Port Harcourt, Rivers State, lauded the ongoing reforms in the petroleum sector especially the Petroleum Industry Bill (PIB).

 

Represented by his Chief of Staff, Mr Joseph Makoju, Dangote said: “The Petroleum Industry Bill (PIB) is a bold step that was initiated to correct perceived flaws in the industry as it is intended to address structural issues concerning policies and the management of oil and gas in the country.

 

“The bill is designed to enhance the value of the sector for the Nigerian people. It also seeks to plug identified loopholes in policies and management agreements and by so doing improve transparency and efficiency of the sector.

 

Our Dangote Group has also been attracted by these ongoing reforms in the sector with our recent decision to invest in a mega project in the downstream sector. We are building a $9 billion mega refinery/petrochemical/fertilizer complex in Olokola Free Trade Zone.

 

The refinery will have the capacity to refine 400,000 barrels of crude oil per day, while the petrochemical plant will produce 600,000MT/year of Polypropylene and 625,000MT/year of Slurry/raw material for carbon black”, he said.

 

Dangote, however, called for collaboration between Organised Private Sector (OPS) and organised Labour for the nation’s industrial sector to perform at optimal level.

 

This call came as the group declared that it was planning to set up $9 billion refinery/petrochemical/fertilizer complex in Olokola Free Trade Zone, between Ogun and Ondo states. The complex would create not less than 25,000 jobs during construction which is expected to last four years.

 

According to him, the fertiliser plants, with a capacity for 2.75 MT/year of Ammonia and Urea, will meet entire domestic demand and have surplus for export.

 

“Certain infrastructure and utilities will be shared. Infrastructure to supply feedstock such as natural gas will be shared. The Refinery, Petrochemical Complex as well as the Fertilizer Plants shall be served by an Off-site Truck Parking Stop. This will be built entirely to international standards and its amenities and communication will be linked to the complex. The project will result in the largest Refinery/Petrochemical/Fertiliser complex in Africa,” he said.

 

He stated that at completion of the project, Dangote Refinery would meet 100 per cent of local demand for refined fuel products, while Polypropylene, which is normally used in the manufacture of agro-sacks, poly bags and other industrial products, will lead to the establishment of new industries.

 

“We are estimating that the project will engage up to 25,000 people over a four-year construction period and it will create about 3,500 permanent jobs when completed. As more state-owned enterprises are being privatised to ensure they are managed efficiently, there is the need for greater collaboration between labour unions like yours that champion the interest of workers and the Organised Private Sector (OPS),” he added.

Russian oil threatens West African supplies to Asia

 

http://www.bdlive.co.za/africa/africanbusiness/2013/11/01/russian-oil-threatens-west-african-supplies-to-asia

 

LONDON — West Africa’s biggest oil exports to Asia in almost two years are threatened by competing Russian supply and new refineries capable of processing cheaper crude from the Middle East.

 

Shipments from West Africa to Asia will average 1.92-million barrels a day next month, the most since February last year, according to estimates by seven traders and an analysis of loading schedules obtained by Bloomberg News. The surge shows how Nigeria and its neighbours are succeeding in finding new markets after a slump in sales to the US, where domestic output rose to the highest in almost a quarter century.

 

West Africa’s expanding sales to Asia are already under threat. Russia is moving closer to making China its biggest market after Rosneft, the country’s largest producer, agreed to supply Chinese buyers for as long as 25 years. The new refineries being built in Asia can handle the heavier and cheaper crude grades shipped from the Middle East, potentially displacing demand for the lighter and more costly crudes supplied from West Africa.

 

"West and North Africa will have to continue looking for new markets in Asia but the new refineries in those markets are made to run either the heavy sours or heavy sweets," said Olivier Jakob of Petromatrix, referring to the oil’s sulphur content. "It will be more difficult for African producers of light sweet crude oils," said the MD of the Zug, Switzerland-based consultancy.

 

African nations also face competition from elsewhere. While the US prohibits the export of most crude grades, it is instead shipping record amounts of diesel and other refined-oil products. Weaker demand for West African cargoes may lower the premiums paid for Nigerian crudes relative to benchmark Brent, which have risen to the highest in at least two years. Nigeria gets about 80% of government revenue from oil.

 

The official selling price of the country’s Qua Iboe crude for November loading was set at $3.50 a barrel more than Dated Brent, the European benchmark, according to state-run Nigerian National Petroleum Corporation. Premiums for some of the nation’s grades such as Bonga and EA are at five-year highs.

 

Rosneft signed an agreement in Beijing last week to supply China Petrochemical Corp with 200,000 barrels a day for 10 years from 2014. The Moscow-based company and China National Petroleum Corp signed a 25-year supply accord in June for about 360-million metric tons of crude, valued at about $270bn.

 

The deals imply that Russia would export 600,000 barrels a day to China from 2015, increasing to 800,000 barrels a day by 2018, according to JBC Energy. Asian crude imports from countries in the former Soviet Union will rise 20% by 2017, from 1.9-million barrels a day, the Vienna-based research company said in a report last week.

 

Any drop in West African sales to Asia may be offset by increasing demand from European refiners, who are contending with declining North Sea and Russian supplies, said David Wech, an MD at JBC Energy. UK oil production in June was 10% lower than a year earlier, government data show.

 

Asian crude demand probably will keep rising as economies expand, potentially diminishing the effect of competing supply from Russia. The region consumed 29.78-million barrels of oil a day last year, 35% more than a decade earlier, according to data from BP. The Chinese economy, the biggest energy user, will gain 7.3% in 2014, compared with global growth of 3.6%, the International Monetary Fund estimates.

 

The US, previously one of the biggest buyers of Nigerian oil, cut purchases because of the surge in production from shale reserves. The nation’s daily imports of Nigerian crude averaged 134,000 barrels in August, the lowest since February 1985, according to data from the department of energy.

 

The US shale boom is a "grave concern" for Africa because it may lead to a glut in global oil supplies, Nigerian Oil Minister Diezani Alison-Madueke said on May 17 in a lecture at Oxford University in England. US exports of diesel and other refined-oil products reached a record of 3.79-million barrels a day in July, 21% more than a year earlier. Angola, which sends more than half of its oil exports to China, will pump 1.94-million barrels a day next year and 2.03-million in 2015, from about 1.86-million barrels this year, the International Energy Agency says.

 

Asia’s imports of West African crude will either remain stable or decline in December and January, according to eight traders surveyed by Bloomberg News this week. Four of them expect imports to weaken and four said they will remain at the pace set in November.

 

Refinery capacity in China, the biggest oil consumer after the US, will grow by 7.3% to about 660-million tons a year in 2014, state-owned China National Petroleum Corp estimates. That is equal to about 13.3-million barrels a day.

 

Companies including PetroChina, China Petroleum & Chemical and Sinochem Group will start about 1-million barrels a day of new refining capacity next year, compared with 340,000 barrels a day this year, according to China International Capital Corp.

 

Refiners in India boosted purchases of West African crude for loading in the second half of this year because of supply disruptions in Libya and Iraq, according to an October 29 survey of three officials at state-run processors in the southern Asian nation. Libya’s crude output fell to 300,000 barrels a day on average last month amid protests, the lowest since the uprising in 2011, data show.

 

India’s refining capacity will rise to more than 6-million barrels a day by 2017, from 4.3-million now, with expansions including the Paradip and Kochi plants, according to Petroleum Minister Veerappa Moily.

 

"Almost all Chinese and Indian refineries coming onstream in the next few years will be state-of-the-art refineries," said Ehsan Ul-Haq, a senior market analyst at KBC Energy Economics in Walton-on-Thames, England. The plants "will use heavy crudes as a feedstock".

Bloomberg

OPEC Oil Output Hits 2-Year Low In October

OPEC's supply averaged 29.90 million barrels per day, down from a revised 30.01 million bpd in September.

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OPEC’s oil output has fallen below 30 million barrels per day for the first time in two years in October, a Reuters survey found, as near-record Saudi Arabian output fails to offset disruption in Libya and lower supply from Iran and Nigeria.

 

Supply from the Organization of the Petroleum Exporting Countries has averaged 29.90 million barrels per day (bpd), down from a revised 30.01 million bpd in September, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants.

 

The survey further illustrates the drag on OPEC output from problems in African producers and sanctions on Iran. But rising shale oil supply from the United States has limited the outages’ impact on prices, which at $109 a barrel are down over $8 from their 2013 peak.

 

“The Atlantic Basin continues to be driven by the increase in U.S. production. If we did not have the increased supplies from the U.S., the lower OPEC production would have had a greater impact,” said Olivier Jakob, an analyst at Petromatrix.

 

In October, renewed protests in Libya, plus disruption in Nigeria and a drop in Iranian sales outweighed a partial recovery in southern Iraqi exports and a third month of Saudi output at around 10 million bpd.

 

OPEC’s October output is the lowest since October 2011, when the group pumped 29.81 million bpd according to Reuters surveys, and leaves supply below OPEC’s nominal target of 30 million bpd for the first time since it came into effect in January 2012.

 

The biggest fall in supply was in Libya, where protests at oilfields and terminals again limited supplies. Output averaged 410,000 bpd during October and by the end of the month was below 300,000 bpd, according to the survey.

 

Libya is a long way away from bringing output back to 1.4 million bpd, the production rate earlier this year.

 

Iranian supply to market was estimated at 2.61 million bpd, down 90,000 bpd as less crude headed to China and India. U.S. and European sanctions on Iran continue to restrain exports, despite a thaw in relations with the West from Iran’s apparent willingness to compromise on its nuclear work.

 

In Nigeria, where output has been increasingly hit by spills and theft from pipelines, supply declined as Royal Dutch Shell again had to close the Trans Niger pipeline and warn it might miss shipments of Bonny Light crude.

 

Saudi Arabia, industry sources say, has kept output around 10 million bpd for the last three months. Supply edged lower in October due to a reduced requirement for crude to fuel domestic power plants, the survey found.

 

The kingdom lifted output to 10.05 million bpd in August, the highest since records began in 1980, according to figures from the U.S. Energy Information Administration.

 

Iraq boosted oil exports in October due to a reduced impact from infrastructure work at its southern terminals. Exports from the south averaged 1.96 million bpd in October, according to shipping data, up from September’s 1.82 million bpd.

 

But lower shipments of Kirkuk crude – due to bomb attacks on the pipeline to Turkey and a dispute with the Kurdistan Regional Government – limited the rise in exports overall.

Ghana’s Sole Oil Refinery Resumes After Third Closure This Year

 

http://www.businessweek.com/news/2013-10-21/ghana-s-sole-oil-refinery-resumes-after-third-closure-this-year

 

By Ekow Dontoh  

---

 

Tema Oil Refinery Ltd., Ghana’s only crude-processing facility, restarted after it secured funds for Nigerian crude, General Transport, Petroleum and Chemical Workers Union Chairman Emmanuel Offoh said.

The state-owned refinery “resumed operations on Oct. 15 after management secured some letters of credit and bought a consignment of 600,000 barrels of crude from Nigeria,” Offoh said by phone today from Tema, 30 kilometers (19 miles) east of Accra, the capital. “At current production of 28,000 barrels a day, we can continue to refine for three weeks,” he said.

The 45,000 barrel-a-day facility has closed three times since reopening in April. The plant has struggled since 2009 to replace aging machinery and to get financing, tightening supplies of fuel in West Africa’s second-largest economy. Ghana imports most of its fuel.

 

The refinery is looking for private investors as “government alone cannot finance the refinery’s activities, Managing Director Ato Ampiah said on Oct. 3.

Ampiah and Aba Lokko, the company’s corporate and public affairs manager, didn’t immediately respond to a call and e-mail seeking comment.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

 

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Owners hoping for December rate hike

 

http://www.tankeroperator.com/ViewNews.aspx?NewsID=4819

 

If history repeats itself, owners can expect to see a gradual increase in rates through December.

This upward movement can be attributed to charterers securing cargoes ahead of the holidays, which in several countries marks a subsiding of trading activity. Further support stems from a seasonal hike of heating fuels’ production ahead of peak winter demand, McQuilling services said.

 

Looking at activity last year, on Arabian Gulf to the US Gulf route, rates climbed by 23% between the start of September and December to WS 29.5. For cargoes moving from the Arabian Gulf to the East, rates climbed by a slightly more impressive 29% to WS 47. In general, rates on these routes increased by roughly 20% during this time period since 2009.

 

As we enter the final quarter of 2013, VLCC owners might be feeling confident that rates will follow history’s pattern. Since the start of September, rates have climbed by about 20%. Although the impact of this is unlikely to be observed on owner’s balance sheets until early 2014, the trend is a welcome change to this year’s weak activity.

 

Owners are doing their part to drive this momentum by monitoring terminal delays, weather conditions and the timing of voyages. Through this, they hope to nudge history in the right direction and lay the foundation for a more prosperous 2014.

 

This development has been supported by increasing evidence that the global economy could be finding its footing. Employment levels have been increasing in the US, as have purchasing manager indices, a gauge of manufacturing activity, in various countries.

 

Apart from the US putting its own house in order, further support will come from an increase in global refinery throughput rates.

 

According to the International Energy Agency (IEA) in Q3, global refinery throughputs are estimated to be 77.3 mill barrels per day. This is roughly 1.2 mill barrels per day higher than a year ago.

 

Although Q4 often represents a seasonal contraction in throughput rates, the IEA still places it at 900,000 barrels per day higher than 2012 figures.

 

Accordingly, JBC Energy also forecasts rising oil demand in most regions. The most significant contributions of growth will continue to stem from non-OECD countries. There also remains upward potential for European nations, as the region slowly rebalances its financial landscape.

 

Even as these somewhat favourable market conditions materialise, the availability of tonnage remains a tangible threat to any year-end rebound. In addition, the ‘invisible tonnage surplus’ created by sailing at slower speeds, lurks just below the surface.

 

Owners have attempted to reduce vessel availability in the Arabian Gulf throughout the year, by ballasting to West Africa. However, this move results in boosting competition for cargoes in West Africa, primarily with Suezmaxes and an eventual return to the Arabian Gulf in search of higher rates.

 

This repositioning will seemingly continue to have a limited impact providing only temporary relief, as the lasting solution, the permanent removal of larger tonnage, has been slow in 2013.

 

Year-to-date our data shows that only nine VLCCs have left the trading fleet, although market players seem to be moving in the right direction, as three demolitions were recorded in September. This, combined with the delivery of 24 vessels, represents a net fleet growth of 15 VLCCs year-to-date.

 

As 2013 starts drawing to a close, it appears that history is on track to repeat itself and VLCC rates are climbing. Global oil demand is projected to be nearly 1.7 mill barrels per day higher in the second half of this year and increase by 1 mill barrels per day next year, McQuilling concluded.

Battle of the Billionaires Erupts Over Keystone Pipeline

 

http://www.dailyfinance.com/2013/10/25/billionaires-battle-over-keystone-pipeline/

 

By Lawrence Delevingne
Billionaire investors love fighting with each other over the markets, safely out of public view in sleek Greenwich or Manhattan offices. But a new political fight is pushing them into a high-profile debate over the future of energy consumption in the U.S. and they are literally taking to the streets of Washington to make their views heard.

The brawl is over an upcoming decision by the Obama administration about whether energy company TransCanada should be allowed to build a massive oil pipeline, called Keystone XL, that will ship oil sands from Northern Canada to refineries in the Gulf of Mexico. The State Department -- in charge because the project would cross an international border -- is still studying the issue and its environmental impact. A decision could come next year.

The two sides couldn't be more convinced of their positions. Former Vice President Al Gore recently called the controversial project an "atrocity." House Speaker John Boehner has said President Barack Obama should "stand up for middle-class jobs and energy security and approve the Keystone pipeline."

Likewise, prominent investors have planted themselves on opposite sides of the issue.

Two hedge fund managers are ardently and vocally against the pipeline. One is Jeremy Grantham, the relatively low-profile chairman of $108 billion money manager GMO.

In February, he was nearly arrested at a White House protest organized by the Sierra Club, for whom he is a lead supporter. His daughter Isabel was among 48 people arrested for handcuffing themselves to the White House fence, according to media reports.

A spokesman for Grantham declined to comment.

The other anti-pipeline hedge funder is Tom Steyer, the billionaire founder of $18 billion Farallon Capital Management. Steyer retired last year to devote himself to political causes; Keystone has been his top priority.

A prominent Democratic fundraiser and environmentalist, Steyer has personally lobbied President Obama and created and appeared in numerous anti-Keystone ads through his group Nextgen Climate Action. Like Grantham, he also protested in Washington at an anti-Keystone rally earlier this year.

"Climate change is the defining issue of our generation. We have a choice between investing in dirty tar sands that will worsen our climate crisis or cleaner energy that reduces our dependence on foreign fuels, brings new jobs in growing industries and preserves the planet for future generations," Steyer told CNBC.com.

 

More from CNBC:

• Keystone would make OPEC obsolete
• Google no match for Keystone pipeline
• Made-in-USA shipbuilding's ally

T.Boone Pickens, chairman of energy hedge fund firm BP Capital, says Steyer and other supporters are misguided because Keystone would reduce American dependence on oil from unsavory regimes.

"The Keystone pipeline, of course that's foreign also, but it's friendly foreign. The stuff coming out of the Mideast, I don't consider to be friendly," Pickens told CNBC.com.

"So I'll take friendly every time over unfriendly. But I don't have to have any Army, Navy or Marines to protect the Keystone pipeline. So you've got to be a sap not to take that oil from them. They have as much oil in Northern Alberta as the Saudis have."

Pickens dismissed environmental concerns from the pipeline itself: "It's not an environmental issue. There are pipelines all over the United States. They didn't want to cross Nebraska and there are 51 pipelines across Nebraska. So the pipeline can be laid out."

Steyer disagrees.

"Let's be clear: The oil from the Keystone XL pipeline will go through the United States, not to the United States. This is an export pipeline that will mean cheaper oil for our foreign competitors," Steyer told CNBC.com when asked about Picken's comments.

"Instead, we should be thinking differently about energy. By investing in clean energy, we can truly achieve energy independence, while creating jobs and addressing the climate crisis."

Another apparent proponent is Stan Druckenmiller, the retired founder of vaunted hedge fund firm Duquesne Capital Management. Druckenmiller is listed as a "major contributor" to FWD.us, a political advocacy group that has run ads in support of the pipeline.

FWD.us was founded by Facebook Chief Executive Mark Zuckerberg and also has support from top technology investors Mary Meeker of Kleiner Perkins Caufield & Byers; Keith Rabois of Khosla Ventures; Fred Wilson of Union Square Ventures and Flatiron Partners; and Joe Lonsdale of Formation 8.

Some members, including Elon Musk of Telsa and David Sacks of Yammer, quit FWD.us over the Keystone ads. Druckenmiller's support for the pipeline could not be directly confirmed. A spokesman did not immediately respond to requests for comment.

Environmental groups working against Keystone are happy to have some support from the investment community.

"It's a good thing to have iconic investors like Grantham and Steyer making the case against this boondoggle," Jamie Henn, communications director at climate change advocacy group 350.org, said. "It's increasingly clear that tar sands aren't just disastrous for the climate, they're also a bad investment. There's no place for a pipeline like Keystone XL in a carbon constrained world."
Steyer said his investment peers are finally engaging on the issue.

"Climate change is the biggest risk facing the world economy today. Extreme weather cost the U.S. economy $100 billion last year, and we can't afford to make the problem worse. Investors are becoming more engaged on this issue," Steyer said. "[That's] why I have teamed with Mayor Bloomberg and Hank Paulson to quantify the risks our economy faces from unmitigated climate change."

-By Follow CNBC's Lawrence Delevingne on Twitter @ldelevingne.

Pirates seize two Americans off Nigeria's coast

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