OPEC Considering Deeper Output Cuts To Prop Up Oil Prices

By Mohammed Shosanya


Lagos – Plan by the Federal Government to fix Nigeria’s ailing refineries and make them work to capacity has been shut down by Maikanti Baru, Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Daily Independent has learnt.

NNPC sources said the plan informed Minister of State for Petroleum Resources, Ibe Kachikwu’s optimism last year that he will resign if Nigeria continues to import fuel by 2019 thinking the plan would be followed through. He had since shifted the country attaining self-sufficiency in terms of refining petroleum products to 2020.

Impeccable sources told Daily Independent that the government had embarked on private public partnership (PPP) arrangement to bring back the ailing facilities to life.

It had concluded agreement with Oando, an indigenous energy company operating in the upstream, midstream and downstream; global commodities trader, Trafigura and world’s largest oil trader, Vitol, to rehabilitate Port Harcourt refineries with installed capacity of 110,000bpsd.

The sources also said the government was to hand over Warri Refinery and Petrochemical Company (WRPC) with installed capacity of 125,000bpsd to Sahara Energy, a subsidiary of a leading international energy and infrastructure conglomerate; Italy’s Saipem, MRS Oil Nigeria Plc and Vitol to refurbish.

It also concluded arrangement to hand over Kaduna Refining & Petrochemical Company Ltd. to MRS Oil Nigeria Plc and Vitol.

The source said Vitol and other firms guaranteed to inject fund in all the refineries with installed capacity of 445,000bpd, noting that the rehabilitation will cost $1.6 billion.

The PPP talk which had been on for over a year was to see the oil firms recoup their investment after repairs of the refineries from sales of crude oil, the sources said.

Spokesman of the corporation, Ndu Ughamadu, didn’t respond to calls and text messages to his phone for NNPC’s reaction.

Several billions of dollars have been sunk by successive administrations in the country to bring the refineries to life without any fruition.

President Muhammadu Buhari had earlier said it was “disgraceful” that no refinery is currently performing up to 50 percent installed capacity, adding that when he was military head of state all refineries were working.

But stakeholders in the nation’s oil and gas sector who spoke with Daily Independent berated the Federal Government over the botched maintenance of the refineries, saying the government had not shown the requisite political will to make the refineries work optimally despite its promises.

They also said that the fact that the incumbent government makes provision for fuel subsidies in 2019 budget shows that the much publicised efforts to bring back the ailing refineries and stop the deluge of products importation was a fluke.

Nnimmo Bassey, environmentalist and oil expert, told Daily Independent that turn around maintenance for refineries in Nigeria has become a huge sinkhole.

He also said it is a huge embarrassment that rather than having the refineries working at full capacity Nigeria is spending astronomical amounts on fuel subsidies.

“And more disturbing is the fact that the 2019 national budget has a huge slice for more subsidies. Government should carry out a radical surgery of the malaise of the refineries and excise the cancer decisively. Dancing around the matter will continue to benefit the so-called cabal while the productive areas of the economy suffer,” he added.

Chief Martin Onovo, a petroleum engineer and one-time presidential aspirant on the platform of the National Conscience Party (NCP), regretted that the current administration made rehabilitation of the refineries and stopping of importation of petroleum products one of its cardinal campaign promises but failed to bring same to fruition.

He said the current government has no business tossing Nigerians around on the status of the refineries when it knows that it would take a long walk to put the assets in good shape and it lacks the capacity to ensure it runs efficiently.

Onovo told Daily Independent that the failure of the Buhari’s administration to evolve aggressive strategy to promote or encourage in-country refining of product has eaten deep into the country’s revenue and exposes the government as agent of lies and deceit.

He added that Nigerians should hold the incumbent administration by the jugular for failure to appropriate substantial funds of the N25.6 trillion accrued to it since 2015 to breathe life into the refineries.


OPEC Considering Deeper Output Cuts To Prop Up Oil Prices

Meanwhile, faced with declining prices and growing inventory in the international oil market, the Organisation of Petroleum Exporting Countries (OPEC) and its allies are considering deeper output cuts to prop up oil prices.

The determined move by OPEC is coming when it had not even started implementing its new six-month agreement to cut output to 1.2 million barrels per day.

The planned deep cuts would specifically be beneficial to Nigeria which depends on oil for over 80 percent of revenues to fund its budgets.

Already members responsible for most of the reductions have pledged to extend or even deepen it.

Officials from Iraq, Kuwait, and the United Arab Emirates have agreed with Saudi Arabia’s expectation that the group, along with Russia and other oil producers, would extend the agreement for another six months.

At a press briefing in Kuwait at the weekend, Iraqi, the U.A.E. and Algerian energy ministers took turns repeating the message that OPEC would deliver its 800,000 barrels per day cut and continue their cooperation with other producers to balance supply and demand.

The U.A.E.’s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory build-up in the first half, hinted additional curbs could be discussed.

“The planned cuts have been carefully studied, but if it doesn’t work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past,” Suhail Mohammed Al Mazrouei, who is also OPEC president, said in Kuwait at the weekend.

“If we are required to extend for another six months, we will, if it requires more, we’ll always discuss and come up with the right balance.”

Last week, oil capped its biggest weekly decline since 2016 on concerns that weakening economic growth and surging U.S. supply will lead to a surplus next year, overwhelming OPEC’s efforts to stabilize the market.

The slide continued even after the Organization of Petroleum Exporting Countries and its partners surprised traders with the size of the supply reduction announced on Dec. 7.

https://www.independent.ng/baru-shuts-down-ppp-deal-expected-to-redeem-nigerias-refineries/

“And more disturbing is the fact that the 2019 national budget has a huge slice for more subsidies. Government should carry out a radical surgery of the malaise of the refineries and excise the cancer decisively. Dancing around the matter will continue to benefit the so-called cabal while the productive areas of the economy suffer,” he added.






Lol, and you wanna ask yourself, "Who is the Minister of Petroleum?
The simple truth is that Buhari is born to fail woefully.

The hypocrisy and clear stupidity of that man is something else. When the going gets good in the oil sector, Zombies quickly heap praises on their lifeless Lord and saviour, but when the oil sector is experiencing some challenges, they quickly hide their baba inside Aisha torn underwear and point to my brother Ibe Kachikwu.

Oando = Tinubu

Clearing the way for Atiku

Reducing competition for Dangote refinery

Baru wouldn't wanna release this ailing refineries to competent private hands to refurbish, instead he prefers the status quo and would rather steal funds allocated to this refineries to private pocket.

#TheAtikuPlan. Government has no business doing business, sell it off or privatise it to private businessmen who can revamp this sector and pay tax to the government. It's not science...

dre11 i believe this story...

This government sef

The subsidy cabal and the presidency cabal don't want the fleecing to stop.Since Buhari came in and saw how the "subsidity" issue can be explore to get slush funds, he have never recant or apologize his "Subsidy does not exist. Subsidy is a scam." statement but have continued to shamelessly pay same.

"..President Muhammadu Buhari says the federal government has set aside N305 billion or $1 billion for fuel subsidy payments in the 2019 budget..."
https://www.thisdaylive.com/index.php/2018/12/20/buhari-votes-n305bn-for-petrol-subsidy-in-n8-83tn-2019-budget/

So our refineries must not be made to work despite the govt failure to fulfilled its one-year one-refinery scam promise.Mikanti Baru is Buhari's henchman in the NNPC doing his bidding.

That's One of the cabals that is setting this country ablaze.


Fraudulent government and their zombified supporters

Many years ago Yar adua revoked the sale of the refineries to Dangote and refunded his 500m usd. By 2020 Same dangote refinery would render Nigeria's refinery as scrap. What a country

Does this man got the approval of the presidency?

Shey una don see government when una vote in na... Imagine where 1.6 billion dollars can be used to make the refineries work again but our buhari would rather appropriate 1 billion dollars for subsidy he claims is a fraud.

Now they are not the ones going to spend to repair it but they sure thwarting the efforts of private firms doing it so their access to subsidy slush funds can remain!

Buhari must Go In Jesus name.

Buhari for another 4 years? God forbid!

I thought the APC govt campaigned against petroleum subsidy.

Hmm

Scam

Finding a way to steal more money in the name of fixing already dead refineries...

He knows he is working under Mr integrity who doesn't probe people close to him.


Just find a way to build another refineries, even if it will take 5 years.

Next level things, Lets join them by investing in cocoa and cashew business, contact me for your supplier 08070580763

But buhari lai no be small o, more than 3 yrs down the line the idiot never fix any refinery, neither has he even provided any site to build new ones like he promised.

JasonScoolari:
“And more disturbing is the fact that the 2019 national budget has a huge slice for more subsidies. Government should carry out a radical surgery of the malaise of the refineries and excise the cancer decisively. Dancing around the matter will continue to benefit the so-called cabal while the productive areas of the economy suffer,” he added.






Lol, and you wanna ask yourself, "Who is the Minister of Petroleum?
The simple truth is that Buhari is born to fail woefully.

The hypocrisy and clear stupidity of that man is something else. When the going gets good in the oil sector, Zombies quickly heap praises on their lifeless Lord and saviour, but when the oil sector is experiencing some challenges, they quickly hide their baba inside Aisha torn underwear and point to my brother Ibe Kachikwu.

Buhari is not in control of his government, believe me, a healthy Buhari will do anything to bring these refineries back to life.

stonemasonn:
Buhari is not in control of his government, believe me, an active Buhari will do anything to bring these refineries back to life.

the more reason why he has to br sent back to daura

when atiku aired his plans to privitise our refinaries many said he is OLX and will sell it to himselve, but u see, even this APC admin. Beleives that privitising our refinaries PROPERLY is a good idea!!
But hell, they lack the willpower to go about it!!

Shame on Kachikwu for accepting a "boy-boy" position. Baru the Barron is more influential than him.


Buhari has killed this country.

Don't mind those hypocrites. God is exposing their lies one by one.

Interesting

Evil practices prevail when godly people are lukewarm to deal with such practices.

We are born into this country Nigeria. We need to diligently save this country.

If we seek to leave(like millions already did), our relatives would not be spared.

We need to use our PVCs, vote in competent Government, defend our votes on election day; because our future children's lives matter.

If the refineries work


How can Baru and Buhari and burantai chop subsidy money

Hmm

After all the many lies and propaganda this is what it has come to? I wonder what Ibe Kachikwu is still doing there as minister-in-name only...he should resign and hold up his honour rather than keep getting tainted with these dirty northern thieves and demons who will do everything to keep bleeding the country dry in the name of crude oil.

When is Dangote coming on board with his refinery sef?