Business

Nigerian Government loses N1.474tn to 222 terminal shutdowns in 10 months

Published

3 years ago

January 10, 2022

The production of 50.788 million barrels of crude oil valued at N1.474tn was stalled between January and October last year due to community interferences and other challenges forcing oil terminals to shut down production 222 times within the period.

Nigeria’s crude oil earnings were depleted by about N1.474tn between January and October 2021 due to various concerns at terminals that prevented the production of 50.788 million barrels of oil during the 10 months.

It was gathered that community interferences, industrial actions by oil workers, COVID-19 outbreak at some terminals, pipeline vandalism, among others, curtailed oil production in various terminals, leading to huge financial losses for Nigeria.

This came as stakeholders urged the Federal Government to push for the deployment of the latest technologies in securing oil infrastructure, as well as try to avoid issues that would warrant industrial actions.

Industry data obtained from different reports of the Crude Oil Marketing Division of the Nigerian National Petroleum Company Limited in Abuja showed that in January, February and March, the volumes of oil lost due to production shut-ins were 3,678,000; 4,105,000 and 3,142,000 respectively.

The losses posted in April, May, June and July were 4,578,700; 4,187,500; 6,035,000 and 7,193,520 respectively.

It continued in August, September and October, as crude oil production losses due to shut-ins were put at 6,680,620; 6,362,700 and 4,824,946 respectively.

A summation of the crude oil volumes that were shut in between January and October 2021 indicated that the country lost about 50.788 million barrels of oil during the 10 months.

The 2021 average monthly prices of a barrel of Brent, the crude against which Nigeria’s oil is priced, were obtained from Statistica, a global statistical firm.

Figures from the international firm indicated that the average prices of Brent in January, February, March and April 2021 were $54.77, $62.28, $65.41 and $64.81 respectively.

In May, June, July and August 2021, the average prices were $68.53, $73.16, $75.17 and $70.71 per barrel respectively.

For September and October, the average monthly prices of Brent per barrel were put at $74.49 and $83.54 respectively.

At the official exchange rate of N411.95 to the dollar, the worth of the crude volumes lost by the country in January, February, March and April were N82.98bn, N105.32bn, N84.66bn and N122.24bn respectively.

For May, June and July, the country’s oil earnings were depleted by N118.23bn, N181.88bn and N222.76bn respectively.

Also in August, September and October, Nigeria could not make N194.71bn, N195.246bn and N166.05bn respectively from the sale of crude oil due to interferences in oil production at terminals.

This implies that the value of the 50.788 million barrels of crude oil that was lost by Nigeria during the 10 months was about N1.474tn, a development which, according to analysts, would have been avoided.

They noted that the huge financial loss came at a time when the country’s debts had been increasing, with the Federal Government sourcing for funds by borrowing several billions of dollars.

According to industry stakeholders, humongous sums have also been spent by the government in its bid to service the country’s debts and so much had also been budgeted for debt servicing in the coming year.

On December 16, 2021, for instance, The PUNCH exclusively reported that Nigeria spent N2.49tn on debt service payments in the first nine months of this year, according to data from the Debt Management Office.

Meanwhile, the COMD reports of events that affected production in January 2021 showed that the 3,678,000 barrels lost due to production shut-in were recorded in eight terminals.

It named the affected terminals to include Forcados, Abo, Yoho, Agbami, Pennington, Ugo Ocha, Qua Iboe and Ima.

On some of the issues that led to crude oil loss in January, the report stated that Shell Petroleum Development Company declared a force majeure that lasted for four days.

This, it said, was due to the shutdown of Trans Forcados Pipeline as a result of community issues on January 10, 2021, over outstanding payments.

In February, a total of 17 incidents led to the shut-ins at terminals, among which include the outbreak of COVID-19 at the Abo Terminal.

It was further observed that 14 terminals recorded crude oil losses in February. They include Forcados, Abo, Akpo, Bonga, Amenam, Erha, Escravos, Brass, Egina, Bonny, Pennington, Ebok, Tulja and Ima.

The month of March witnessed 16 incidents that resulted in the loss of 3,142,000 barrels of crude oil at 10 terminals. The affected terminals include Forcados, Akpo, Erha, Brass, Egina, Bonny, Pennington, Okono, Yoho and Ima.

The NNPC explained that one of the reasons for production losses at the Forcados Terminal in March, for instance, was because “Pan Ocean OML 147 (had to) shut-in production because of industrial action.”

The report further noted that there was a production shut-in at Jisike in Brass Terminal from March 22 to April 2, 2021, adding that this was “due to industrial action by PENGASSAN (Petroleum and Natural Gas Senior Staff Association of Nigeria).”

An analysis of the COMD report of events that affected production in April 2021 showed that 30 incidents depleted oil delivery at 13 terminals during the month under review.

The terminals were outlined as Forcados, which witnessed up to 11 incidents in April, Anyala Madu, Bonny, Ugo Ocha, Otakikpo, Abo, Sea Eagle, Usan, Agbami, Okono, Antan, Pennington and Ima.

The month of May also recorded 30 incidents that also occurred at 13 oil production terminals, which include Forcados, Anyala Madu, Bonny, Ugo Ocha, Otakikpo, Egina, Sea Eagle, Usan, Brass, Akpo, Yoho, Qua Iboe and Ima.

In one of the incidents at the Bonny Terminal in May, for instance, the NNPC said, “Eroton production was shut down due to vandalised AKOS015S wellhead and community disturbance.”

A total of 32 incidents led to the curtailment of crude oil production at 15 terminals in June last year.

The affected terminals include Forcados, Anyala Madu, Bonny, Ugo Ocha, Okono, Sea Eagle, Usan, Brass, Erha, Yoho, Qua Iboe, Agbami, Egina, Pennington and Ima.

The volume of oil lost in July stood out as the highest during the 10-month review period, as the delivery of 7,193,520 barrels of crude was stalled by 39 incidents that occurred at 14 production terminals.

The terminals where these incidents occurred include Forcados, Antan, Bonny, Sea Eagle, Usan, Brass, Yoho, Qua Iboe, Escravos, Akpo, Ajapa, Otakikpo, Pennington and Ima.

Further analysis of the reports from NNPC showed that 20 incidents led to the loss of the 6,680,620 barrels of crude oil recorded in August this year due to various production shut-ins.

It was also observed that eight crude oil terminals were affected in August, as production was curtailed at the facilities during the period. The affected terminals in the review month include Forcados, Sea Eagle, Brass, Yoho, Qua Iboe, Escravos, Ajapa and Otakikpo.

Explaining some of the incidents that curtailed production in one of the terminals, for instance, the NNPC said, “Energia (an oil firm) injection into Brass line (was) suspended due to pipeline damage.

“Pillar injection into Brass (was) suspended due to third party interferences on NAOC (Nigeria A grip Oil Company) Akiri pipeline.”

For September, it was observed that 18 incidents warranted the loss of 6,362,700 barrels of crude oil, following production shut-ins recorded in the review month.

A total of nine terminals were affected in September, including Forcados, Sea Eagle, Brass, Yoho, Qua Iboe, Escravos, Urha, Ajapa and Otakikpo.

On some of the incidents that led to the crude oil losses in September, the NNPC stated that “production (was) curtailed due to pipeline outages” at the Forcados Terminal.

It also noted that “Energia injection into Brass line (was) suspended from September 1 to 30, 2021 due to pipeline damage.”

Findings from the NNPC report of events that affected production in October 2021, however, showed that the incidents that led to crude oil production shut-ins reduced to 11 during the month.

But eight terminals were affected as the total loss recorded in October was 4,824,946 barrels of crude oil, which was the lowest among the figures posted during the three months.

The affected eight terminals include Forcados, Bonny, Odudu, Brass, Yoho, Urha, Ajapa and Aje.

Commenting on the development, the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, said, “Government should deploy automated pipelines as well as latest technologies to protect oil assets.”

Also, a former President, Association of National Accountants of Nigeria, Dr, Sam Nzekwe, said, “Some of the concerns raised here can be avoided, such as issues that often lead to strikes by workers. We can’t be losing such huge sums due to production shut-ins.”

The Minister of State for Petroleum Resources, Chief Timipre Sylva, and the NNPC had repeatedly stated that the government was interfacing with communities in the oil region on why it was necessary to halt acts that often resulted in crude oil losses.

“The NNPC in collaboration with the local communities and other stakeholders continuously strive to reduce and eventually eliminate this menace,” the corporation had stated in one of its most recently published monthly reports.

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Business

Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

2 months ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

2 months ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

2 months ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.