Dangote refinery: IOCs insist on selling crude via foreign agents – Newstrends
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Dangote refinery: IOCs insist on selling crude via foreign agents

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6 months ago

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Dangote refinery: IOCs insist on selling crude via foreign agents

The Vice President, Oil and Gas, at Dangote Industries Limited (DIL), Devakumar Edwin, on Wednesday insisted that International Oil Companies (IOCs) operating in Nigeria have consistently frustrated the company’s requests for locally produced crude as feedstock for its refining process.

The management of Dangote Industries Limited disclosed it in a statement on Wednesday.

Mr Edwin’s response came against the background of a statement by the Chief Executive Officer of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe.

Mr Komolafe had in an interview on ARISE News TV said that “it is ‘erroneous’ for one to say that the IOCs are refusing to make crude oil available to domestic refiners, as the Petroleum Industry Act (PIA) has a stipulation that calls for a willing buyer willing seller relationship.”

Last month, Mr Edwin accused IOCs in Nigeria of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals.

He said the IOCs are deliberately frustrating the refinery’s efforts to buy local crude by jerking up high premium price above the market price, thereby forcing it to import crude from countries as far as the United States, with its attendant high costs.

On Wednesday Mr Edwin noted that the NUPRC has been very supportive to the Dangote Refinery as it intervened several times to help the facility secure crude supply.

However, he said the NUPRC chief executive was probably misquoted by some people hence his statement that IOCs did not refuse to sell to the company.

“To set the records straight, we would like to recap the facts below. Aside from Nigerian National Petroleum Company Limited (NNPC Ltd), to date we have only purchased crude directly from only one other local producer (Sapetro). All other producers refer us to their international trading arms,” Mr Edwin said.

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He explained that these international trading arms are non-value adding middlemen who sit abroad and earn margin from crude being produced and consumed in Nigeria.

“They are not bound by Nigerian laws and do not pay tax in Nigeria on the unjustifiable margin they earn. The trading arm of one of the IOCs refused to sell to us directly and asked us to find a middleman who will buy from them and then sell to us at a margin. We dialogued with them for nine months and in the end, we had to escalate to NUPRC who helped resolve the situation,” Mr Edwin said.

He added that when the company entered the market to purchase crude requirement for August, the international trading arms claimed that they had entered their Nigerian cargoes into a Pertamina (the Indonesia National Oil Company) tender, and it had to wait for the tender to conclude to see what is still available.

“This is not the first time. In many cases, particular crude grades we wish to buy are sold to Indian or other Asian refiners even before the cargoes are formally allocated in the curtailment meeting chaired by NUPRC,” he said.

Commending the NUPRC for its various interventions in the oil company’s crude supply requests from IOCs, and for publishing the Domestic Crude Supply Obligation (DCSO) guidelines to enshrine transparency in the oil industry, Mr Edwin said “If the DCSO guidelines are diligently implemented, this will ensure that we deal directly with the companies producing the crude oil in Nigeria as stipulated by the PIA.”

He highlighted that when cargoes are offered to the oil company by the trading arms, it is sometimes at a $2-$4 (per barrel) premium above the official price set by NUPRC.

“As an example, we paid $96.23 per barrel for a cargo of Bonga crude grade in April (excluding transport). The price consisted of $90.15 dated Brent price + $5.08 NNPC premium (NSP) + $1 trader premium. In the same month we were able to buy WTI at a dated Brent price of $90.15 + $0.93 trader premium including transport.

“When NNPC subsequently lowered its premium based on market feedback that it was too high, some traders then started asking us for a premium of up to $4 million over and above the NSP for a cargo of Bonny Light. Data on platforms like Platts and Argus shows that the price offered to us is way higher than the market prices tracked by these platforms. We recently had to escalate this to NUPRC”, Mr Edwin said.

He urged the regulatory commission to take a second look at the issue of pricing.

“NUPRC has severally asserted that transactions should be on a willing seller/ willing buyer basis. The challenge however is that market liquidity (many sellers/ many buyers in the market at the same time) is a precondition for this. Where a refinery needs a particular crude grade loading at a particular time then there is typically only one participant on either side of the market.

“It is to avoid the problem of price gouging in an illiquid market that the domestic gas supply obligation specifies volume obligation per producer and a formula for transparently determining pricing. The fact that the domestic crude supply obligation as defined in the PIA has gaps is no reason for wisdom not to prevail.

“The $2-$4 is per barrel. It is important that we specify it so people understand the magnitude. Without specifying per barrel may mean it is just $2-$4 on the full value of the cargo, which is insignificant,” he said.

Dangote refinery: IOCs insist on selling crude via foreign agents

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Yuletide: Chisco deploys new luxury, mini buses, top quality services

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45 minutes ago

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January 1, 2025

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Yuletide: Chisco deploys new luxury, mini buses, top quality services

…hails Tinubu for 50% fare rebate

Nigeria’s Transport Company of the Year, Chisco Transport Ltd, has deployed in various routes nationwide its newly procured new luxury and mini buses with the latest innovative features in the industry.

It assured the travelling public of safe and top quality services on all its routes this Christmas/New Year season, and beyond.

It stated this in a statement released on Tuesday, adding that the company, which had been one of the country’s front runners in long distance passenger transportation and logistics for over 45 years, recently inaugurated about four new branches in order to bring its services closer to its teeming customers.

It listed some of the new branches that had helped to boost service delivery this Yuletide season as in Awka, Enugu, and on Okota Road (near Cele Bus Stop on Oshodi-Apapa expressway), Lagos.

It stated, “This is in addition to embarking on a comprehensive maintenance of the existing fleet of buses in order to ensure they are in roadworthy shape for trips across Nigeria and the Lagos-Cotonou-Lome-Accra international route.

“Apart from advanced safety features like real-time GPS tracking and efficient safety systems, the new-look Chisco Transport fleet, featuring state-of-the-art buses, has all it takes to guarantee that passengers travel in style with their comfort and safety prioritised this season.”

It stated that the updated fleet had enhanced the popular Chisco 24 to 48-hour nationwide mail and parcel services.

All these, the leading transport solutions and logistics provider said, are part of deliberate efforts to ensure seamless and comfortable bus and logistic services to the customers during the 2024 Yuletide season and thereafter.

Chisco’s Head of Business Operations, Mr Buchi Ochuba, in the statement explained that the same commitment to ensuring safe and comfortable trips out of major cities and towns before Christmas, would also be deployed to return journeys in the new year.

He said that the management was aware that the huge investments the company had been making towards upscaling its services recently earned it the Transport Company of the Year at the recent Nigeria Auto Journalists Association (NAJA) Awards in Lagos.

Ochuba reiterated Chisco Transport’s resolve to sustain the high standards that earned the company an enviable reputation, as well as continue investments in safety and comfort of travellers that have earned it the confidence of the travelling public and the auto journalists’ award.

“We appreciate the fact that in adjudging Chisco Transport the Transport Company of the Year, NAJA must have taken into consideration the high standards of our services, the over 50 new air-conditioned buses we procured recently, the new branches we inaugurated, our customer reward scheme and other investments we made to enhance passenger transportation and logistics,” Ochuba stated.

According to him, everything is in place to make certain that the teeming Chisco Transport customers all over Nigeria and on the international route enjoy top quality services, adding “We wish them a wonderful Christmas and a highly prosperous 2025.”

Chisco Transport also applauded President Bola Tinubu for the gesture of subsidising inter-state luxury bus transport fares by 50 percent this Christmas season.

Drawing attention to the importance of infrastructure to the road transportation business, the statement further commended the President for the appreciable allocations for the sector in the 2025 budget.

“We, therefore, wish to urge members of his cabinet to put in more deliberate efforts to help the President attain his vision with speedy and prudent execution inspired by patriotism.”

On the current sharp increase in fares across the routes, the award-winning transport company blamed the situation on rising costs of maintaining the buses, as well as on the high pump prices of diesel and petrol.

The Head of Operations, however, added that at the peak of every Christmas season, long distance buses are almost empty during return trips, which leads to a situation whereby the fares for the first journeys are raised to cushion the losses incurred during reverse trips.

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Naira exchanges N1,650/$ in parallel market

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4 hours ago

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January 1, 2025

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Naira exchanges N1,650/$ in parallel market

Yesterday, the Naira appreciated N1,650 per dollar in the parallel market, compared to N1,655 on Monday.

Similarly, the Naira appreciated to N1,535 per dollar in the official foreign exchange market.

Data published by the Central Bank of Nigeria, CBN, showed that the exchange rate for the Nigerian Foreign Exchange Market (NFEM) fell to N1,535 per dollar from N1,537 per dollar on Monday, indicating N2 appreciation for the naira.

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Consequently, the margin between the parallel market and NFEM rate narrowed to N115 per dollar from N118 per dollar on Monday.

 

Naira exchanges N1,650/$ in parallel market

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Exchange rate ends 2024 at N1,535/$1, marking a 40.9% depreciation

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17 hours ago

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December 31, 2024

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Exchange rate ends 2024 at N1,535/$1, marking a 40.9% depreciation

The exchange rate between the naira and the dollar ended the year at N1,535/$1 representing a 40.9% depreciation for 2024.

The official exchange rate between the naira and dollar closed in 2023 at N907.11/$1 thus depreciating by 40.9% for the year which compares to a 49.1% devaluation at the end of 2023.

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Nigeria introduced several foreign exchange policies in 2024 as the central bank expanded on market-friendly forex policies to attract foreign investors.

Meanwhile, on the parallel market where the exchange rate is sold unofficially, the naira exchanged for N1,660 to the dollar when compared to N1,215/$ according to Nairametrics tracking records. This represents a 26.8% depreciation.

 

Exchange rate ends 2024 at N1,535/$1, marking a 40.9% depreciation

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