₦airaland Forum

Emefiele has successfully created a Venezuela out of Nigeria.

Same policies, same results.

mickey45:
That to me doesn't still justify spending any of our much "needed-for-other things" dollars on probabilistic projects like Chad exploration.
I think the IOCs have more reliable data than FG itself and should such projects be profitable, they'd have started it on their own since.

Having to pipeline the oil down to the ports would only further increase expenditure and vandalism.
Not to forget that FG has almost never singlehandedly completed a business-sensible and self sustaining project lately, almost none.

So I see the money ending up in pockets and GMB's successor putting it on the shelf to face "more pressing" issues.

Dynamics may change shd we have in-house refineries though but I won't bet on it.

Good points bro. I for one have never been against increasing reserve, my only issue is the timing.

OP, Bulls Eye
I have watched with keen interest and just only a few days ago raised this issue in one of my posts, about the sensationalism in the reports. As my right honourable friend has pointed out, we are looking at Dasuki and Co. being charged for 13.6 Billion Naira out of over 400 billion Naira representing about 3% of the arms fund. The government should in all fairness, reveal to the citizens, how much of the money was actually embezzled and how much of it was spent on arms, since some people already believe that Dasuki's arms money was responsible for the "dollarization" of our economy and the root cause of the current challenges faced by our CBN's monetary policies.

saxywale:
Your post is confusing. A graduate can never be a roughneck, atleast in developed countries like the US, Canada, Norway or scotland e.t.c He would enter the control room or supervisory position straight. Or be in an office controlling those on the field with occasional field visits.
The grad with MSc has an opportunity to rise to management. But the guy with high school diploma and all his certificates would spend all his career on the field drilling, a very tough job with no career advancement.

A job roles of a driller is different to than of a drilling engineer. Highest position a driller can attain: Tool pusher; Highest position a drilling engineer can attain: CEO

Just as you can't compare someone with a Masters in corrosion/materials engineering to a NDT technician(even on the highest level+plenty certificates).

True nowadays most companies even require at least an MSc to get you started, Exxon Geoscientist's are required to have at least an MSc, Statoil requires an MSc and a lot of them. Like my earlier position, If one just needs a job, then a certification will be fine, buta top job can relatively easily be accessed with an advanced degree.

pete26:
For a petroleum Engineer who's currently working and has almost a year experience in the oil and gas industry, would u advice a masters degree or a professional course. This has been a very disturbing issue to a brother.

A masters degree is your best bet in oil and gas at the moment. Gone are the days from the "great crew change" when there was a large knowledge gap and companies were pushing people up the ladder to fill up top positions.
For a "millenial" an advanced degree would better position you for those "sterling" positions otherwise inaccessible.

I'll give a terse advice: "if you are planning short term go for your professional certifications, if you can see the big picture in the long term, you would be very sure of that master's degree" despite the examples some people try to show around, I will boldly state that for the very top opportunities you will need those advanced degrees to gain access.

No two ways

wirinet:
You links states that production cost for Nigeria is $31.60 while that of UK is $52.5 . Does it make sense that production cost of the UK is higher than the current market price of Brent crude, which is $37.89 per barrel. So how come the UK is selling at a loss of $15 per barrel? Are you insinuating that Nigeria and the oil companies presently share a profit of less than $10 per barrel?

During the 80s, crude hardly broke the $30 barrier, at on time it went as low as $8, so why were oil companies still in business?

Ha ha ha ha ha
Little wonder people believe just about any info thrown out there such as "a million barrels of crude stolen per day etc.".
I recall our petroleum Economics professor from the Colorado School of Mines saying even the best guys who do the oil and gas calculations most times are intrigued the way the numbers work.
Production cost of oil my brother, comprises of the OPEX and the CAPEX, the CAPEX of today has already been invested years ago and that investment has been spread over time. That is the reason why at a time like this in high cost countries, most oil companies cut back on making investments but rather chose to lift oil from the ground, because for the period the direct cost incurred will be the opex ( cost of administration, salaries and lifting oil from the ground and sending to the terminals) but the
CAPEX not to be neglected.
Let me shock you with info from a discussion I had with someone years ago, someone high up one of the major oil producers in Nigeria: "for every $100 dollars of sales our company makes, we get $3 out of it, I don't understand how we manage to make money but we do make money" and no IOC makes more than this company in Nigeria. You should be able to figure out.


In summary the oil and gas business is one where the numbers can sometimes be seen to appear like magic, reality and appearance are intertwined in this world.

GiantParrot:
Nice analysis. However, I get this nagging feeling that you worked towards the N830b without necessarily believing in the truth of what you wrote. Pardon my scepticism, but I have in my experience seen situations where even accomplished scientists tailor evidence to suit their aims. I may be very wrong here though. But here are the reasons for my suspicions:

1. You seem to be calculating profits (38-20) instead of oil revenue, When we are clearly dealing with revenues.
2. Average cost of production in Nigeria was about 31.6 USD from a CNN report released in November. http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL
This is not surprising considering the costs incurred on security, unplanned shutdowns due to vandalism, and corruption in operating the producing assets. Can you provide a link that says it's 20 USD?
3. While it is true that government owns about 60% of JVs, you intentionally omitted the petroleum profit tax paid by other members of the JVs. Doesn't that also qualify as oil revenues? How about the petroleum profit tax from the PSAs.

I do not know how N820 billion was arrived at. I will love to see a credible analysis explaining that sum.

Excellent write up brother, a bottle of red wine for your Christmas meal, from me to you.

http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL

The link I was looking for.

EternalTruths:
Thank you


Let someone post a link to a reliable source that will tell us the real production cost of oil.

I still haven't found the table I was referring to, but herr below is Lai Mohammed and ACN cum APC's cost per barrel put at $35.

https://www.nairaland.com/1206359/economy-brink-collapse-acn-warns


But I still repeat that when operating expenses are factored in then the costs average 31 dollars a barrel.

EternalTruths:
Thank you


Let someone post a link to a reliable source that will tell us the real production cost of oil.

Currently looking for one I had from last month splitting the costs by production and operating expenses and ranked by countries.


Found:
http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL

EternalTruths:
I know about the 60% and 54% rule

Tell him to calculate again using Buhari's $38 and not the $20 I suggested.


He is trying to be smart.


$38 * #199* 365*570240= 1,573,936,531,200 trillion naira

Why did Buhari lied by saying 830 Billion naira.


So who is fooling who.?


Don't tell me cost of production is $20 without fact

You have a point bro, because the calculations should be based on accrued revenue and not net ( following deductions of production costs) because if the analysis has to be done along Jokay07's line of reasoning, total average cost of production for Nigeria is in the region of 31 dollars a barrel, 15 dollars as cost of production and 16 dollars of operational expenses.

So his calculation should have been done using 7 dollars and not 20 dollars as he has shown.

EternalTruths:
Multiply 2.2 million barrels by 365days by $38 by #200

You will get #6,102,800,000,000 trillionnaira

Multiply 2.2 Million barrels by 365days by $20 by #200

You will get #3,212,000,000,000 trillion naira




Tell me how come #860 billion naira


Buhari and APC can't scam me like you illiterates.

Brother just to kindly make some corrections in your analysis, multiply by 60% which is NNPCs share typical of most JV agreements, then a further 52% share which goes to the fg based on Nigerias revenue sharing formulae, + 85% tax on profits of the IOCs and any other royalties or rent contributors not covered by this overtly simplistic analysis.

oromidas231:
I think the APC's economic team just put the benchmark as $38/brl per say....I believe the economy would be hugely diversified in 2016 and a huge chunk of funds to service the budget would come from non- oil sources for the first time in a long while in our nations history. I believe the statement PMB made that "its time for us to farm our lands and explore our solid minerals" was no fluke....let's just be patient as Nigerians and stop judging d APC government like its PDP-run affair!
I think the APC's economic team just put the benchmark as $38/brl per say....I believe the economy would be hugely diversified in 2016 and a huge chunk of funds to service the budget would come from non- oil sources for the first time in a long while in our nations history. I believe the statement PMB made that "its time for us to farm our lands and explore our solid minerals" was no fluke....let's just be patient as Nigerians and stop judging d APC government like its PDP-run affair!

We don't have a choice, but sit and watch hoping the gamble pays off. I really do hope the economic team would be able to enter action with boldness.

49cents:
You nailed it @ bolded!!!

That's the APC style: they borrow monies and do signature projects to score cheap political points, they even do so at inflated amounts (cf, Fashola's website and Borehole)

While they use IGR for themselves leaving the next government to pay thier debts which projects they took credit for

Exporting what is obtainable at the states, to the center. Well we just have to pray this borrowing gamble pays. Have a good holiday bruv. Buona vacanze

Eazydeek:
Hahaha This goat is a joker, you call yourself an educated fellow ? But look at what you typed with your fecal filled brain hahahahah

Laugh wan kiiiii me oh, the dude de brag about education on Nairaland but in reality he's a road side cobbler hahahahahahahahaha

Chai Datas don cheap sha

Keep laughing bro and best wishes

mandarin:
Exploration around Chad Basin is political and of great necessity. Your points are fantastic but you see there are decisions that are not just economic but also necessary for political reasons. The issue of Boko Haram itself is a potential threat to oil exploration around the Chad Basin while that of Militants is a rather latent threat to oil production activities around the Niger Delta. I feel i will agree with you if you point at more offshore explorations.
My case for strenghtning the energy sector is getting these refineries privatized, license loads of modular refineries and major ones, invest in underground pipeline transports system and build more LNG.
OUR FUTURE LIES IN OUR DOMESTIC MARKET where we can determine our own price regimes and wage price war in taking over the neighbouring markets if we decide to price our crude cheaper for domestic refineries and open our boarders for sales to other countries.
Government at all levels can generate incomes and taxes if consumption is stimulated like while raising taxes on luxury cars, basic cars are made cheaper, raises domestic gas consumptions and encourage more many gas to power plants. Our future lies here with our huge population and landmass, we can raise our GDP above a trillion dollar.

Meanwhile, those criticising the non oil budgeted income never realised that tax incomes have been largely underreported through various corrupt practices. Customs, council officials and revenue officers do not report sufficient revenues to government.Many organizations are owing and shortchanging government but if there is zonal restructuring and involvement of tax collectors you will be surprised more so when states beging to levy the huge informal sector like markets and shops by introducing compulsory tax cards.

I actually do not subscribe to rich government poor people but if government spend to improve infrastructures, health and education, then economic activities will thrive.

excellent points brother, i totally agree with you.

ochobaba:
Inrespective of the fact that dey kept complaining...have you sat down to imagine just 7nigerians stealing 3trillion naira...
Have you sat down to think that if the money had been inside fg account
My brother this is arrant nonsense from the past government

Inasmuch as there might have been leakages in the past, three things to take into consideration.
1) have you sat down to critically imagine 7 identified but anonymous individuals stealing 3.3 trillion?
2) For anyone to steal that much, this "media -savvy" government would have released names, there is no love lost between this administration and the previous so they would not take the pain to cover up for any such individual except the individuals are in their midst especially one whose last names starts with a T and ends with a U .
3) You know we have 3.3trillion naira of our money in the hands of 7 individuals and you want to subject the 169million plus to borrowing 1.8trillion naira for oir budget?

I just hope people can critically analyze every piexe of information they receive, rather than swallowing everything these politicians and their domestic appendages spill over the media, hook, line and sinker.

vizion:
Pls do not forget that a lot of Nigerians work for the exploration companies too.

So put a hold on the exploration activities is not also good for the economy, as this ppl would be out of jobs and would not have funds to spend, which is detrimental to economical growth.

Also, cost of exploration at this moment would be cheaper than when oil prices are higher.

True but let's not forget that activities in that area had been suspended for about 6 years now.

dustydee:
Ever wondered why we import heavy crude? Why did you say it doesn't make sense? An economic analysis will do. India as far from Nigeria as it is imports crude oil from Nigeria, why? Why don't they just buy refined products instead of buying crude and refining?
You have to realise that different crude types have different characteristics and the fractions you get from them differs.
Basically you are suggesting that we are better off importing petrochemical products than producing them here.

No brother, if you followed my posts you will understand my position, India and Nigeria can not be compared in this regards, we already have the oil downhere and could refine or build our refineries close to the source. What is the rationale behind
1) travelling abroad to find heavy oil with the abundance of easily refined light oil.
On a scale of preference our basic challenge is on petroleum products, while leave a crude that guarantees us higher and finer yields for one that gives more asphalt. Petroleum is our primary objective, and not other by products.
2) trucking the imported oil all the way to Kaduna and trucking back any refined products.

http://sunnewsonline.com/new/okonjo-iweala-disagrees-with-petroleum-marketers-over-n200bn-debt/

OP, This was from May this year, on the issue of subsidy you can't say the previoud government stopped the payments last year.


"
Speaking to newsmen in Abuja, the Minister explained that last week the Federal Government paid the market­ers N156 billion but noted that since after the payment the debt had risen to N131 billion. “Since December we have paid half a trillion naira. We have paid N500 billion. So, we have tried really hard and so we have appealed to them that they are also Nigerians. With the fact that we have prioritized them in their payment so Nigerians won’t suffer. That has been the main tenet of this. Let us try and pay eventhough we have seri­ous revenue challenges so that Nigerians won’t suffer, Nige­rians won’t be in queues” she appealed.

We shouldn't be creating reasons why the current government can be exonerated if "God Forbids" they fail, every excuse should be placed on the sidelines and we forge ahead.

"Complaint has never and will never be a strategy" - NavierStokes

I think the ratio is actually NNPC 52% and Marketers 48%. All the same we got our hands on a very dicey situation an offshoot of the approach the cbn took a few months back. Now its like a domino, and everything begins to fall like a pack of cards. One wrong move was all it took, we can only pray for the recovery in the oil price so we can fall back on the same Niger Delta people that are greatly castigated. I saw a lot of ignorant comments in the past about the "Niger Delta Oyel". But truth is that is the only thing that can quickly take us out of the forthcoming chaos. Diversification will take wuite ome time to achieve, we can mainly hope for the rise in that "Oyel's"price.

Jesusloveyou:
what a country? So is now a crime to let us know what happened in d past govt from d available record

Do you get the point? Tell us who took our money, charge them to court, prosecute them and recover it all not making unsubstantiated allegations agsinst anonymous persons. Who will steal 1million barrels of crude a day from a country pumping 2million barrels a day more or less, or 3.3 trillion amonst 7 persons.
I repeat the gentleman and his "domestic appendage" should face governance and stop telling us hollow stories considering their stance on Abacha only a few years back.

Jesusloveyou:
did she blame anyone? She simply telling us that with record available only 7 people corner our 3.3tr naira, instead to be weeping for nigeria, u are rejoicing with criminals, what a life?

All the accusations made by this government's official and unofficial spokespersons have been geared towards one thing, passing blames to anonymous suspects "a minister stole $6bn, Jonathan's ministers stole 1million barrels of oil daily, $150 bn stolen by Jonathan's ministers, 3.3 trillion naira stolen by 7 people) they either name and shame or forever remain silent and face their job.

dustydee:
I am saying he is not more qualified than one who operated and maintained the refinery for several years. One that knows the inner workings of the refinery. The write-up was Dr Egbogah's opinion, and he's entitled to it. But that doesn't make it right.

Brother it is all out there now that the KRPC refinery functions on feedstock that is imported from faraway Latin America. Even the explanation of higher volumes I believe can not be justified by the cost of transporting light crude all the way to Latin America or wherever and transporting the heavier crude back here, with subsequent trucking from the coasts to Kaduna. Doesn't make sense in anyway bro. It doesn't make sense .

kITATITA:
 Young people should monitor monetary allocations to ministries and demand judicious use of same."

The bolded is a challenge she has thrown at you and others. She wants you to monitor and hold her husband accountable. I think it is clear enough.

Thanks brother, the issue here is about the government getting to work and not complaining to the masses everyday, no one would tolerate a football club manager who takes 6 months to select his team, and comes everyday with press statements of reasons for his underperformance especially when you understood the kind of job you were signing up for.

What difference is there between the bothe statements " an unnamed cabal has been benefitting from subsidy" and " an unnamed 7 have benefitted 3.3 trillion from our coffers"

Eazydeek:
Fool, you should ask yourself if they stole or not.. You support politicians who don't know you exist, sell your future, steal your money

But you go against those people that wants to bring them to book because of your political or ethnic differences, some of you go to school but aren't educated

Be ashamed of yourself & for your parent's effort you put in vain

You will need 4 lifetimes to be at par with me educationally. " in any battle of wits it is needless to argue with an unarmed man like you". Have a great day.


PS: acting as expectrd after the rice of last night.

sweetgala:
Idiot, 7 people stole your entitlements and you are here castigating the leaders who have advised on how to demand what is your right.

Like Pat Utomi said yesterday on channels TV , if every Nigerian was sent a letter annually that read " your share of state revenue thsi year is 3000 but after fraudulent deductions 99.9% what is left to you is this here 150" we'd ask more about how our national resources are spent.

God save the future generations

7 people stole 3.3 trillion and what has been done about it, if we start looking at most of these monies that they claim were stolen, must have been frittered on frivolous gatherings like this one she just hosted. Who made her the government's spokesperson?

And the best you can do is call me an idiot for stating the position of the majority. You can chose what nonsense to believe for majority of the people out there the demand is that government gets down to business and not this "seemingly infinite" start-up time they are currently displaying.

You are acting as expected after the rice of last night

This government has been following the footsteps of her "worthy" example. All the policies so far has been in tandem with Venezuela and I am afraid the results may not be too different.
http://media.bishopi.com/ec.aspx?l=16935354&e=1514270

dustydee:
Dr Egogah is respected in the oil and gas industry and so is Ian Udoh. But I will go with Ian because he is more experienced, in my opinion, than Dr Egbogah in refinery technology and operations. A look at is CV will confirm that he is not an expert in refining. Kaduna refinery was setup for a purpose and it served that purpose until our lack of maintenance culture affected its operation.
As with your analogy, I'd rather believe the mercedes benz manager than a Tractor company manager who tells me that the mercedes is not properly designed.

That Dr Egbogah according to you, is not "experienced" in refining doesn't mean he would know nothing about the feedstock, know nothing about the operations of the refinery. These are very basic assertions he put out there being challenged. In the case of your analogy, "Dr Egbogah can not be referred to as a Tractor Manager here, a regulator or critique would be more appropriate ". At the end your choice is as you prefer.

mapet:
Bros,

1. Production normally declines almost immediately, and when you consider that many of our wells are old, then the only viable option is to replace your reserves
2. Exploration does not necessarily mean you want to produce immediately. Some of these endeavours lasts from between 18months and 3years
3. Exploration and finding helps to increase the valuation of your asset.

Fratello,

Our reserves were already above 34billionbbls, which with current productiim rates can last us up to 40+ years, we have several explored projects that we could phase upwards to development and production. And dont forget that for these existing projects the lifetime of a reservoir exceeds 20 years in a great many cases.
My point if you didn't get is: why the rush for exploring the Chad at a time like this, when we should be positioning ourselves for the rise expected from Q4 2016. Considering that even with this downturn, technologies is what a lot of companies are expecting to do the magic, and reserves is a function of Technology and economics. I do hope you get my argument, the budget is already out there we may not be able to change what's on ground but at least we can still air our opinions like we did with the cbn months ago before we found ourselves where we are today.


In this downturn every company is trying to go leaner and more efficient by trying to allocate resources to the most important projects, and the drive is towards production volumes except the already efficient producers who have the luxury of exploration.

[quote author=ISpiksDaTroof post=41260480]Bode George?!

[/quotes]

http://newnigeriaagenda.org.ng/bode-george-and-30000-only/