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More Boost for Nigeria as Oil Production Rises to 1.6mbpd

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•NNPC shops for new American IOC for Bonga South-west Aparo FID in 2024

•NCDMB to get first dividend payment from Waltersmith Refinery by year end

•Security, cost optimisation, others at front burner as NLNG, IOCs seek solutions

Nigeria is speedily recovering from the months of under-production with oil production at 1.59 million barrels per day as of yesterday, according to the Nigerian National Petroleum Company Limited (NNPC).

The Chief Investment Officer, NNPC Upstream Investments Management Services (NUIMS), Mr. Bala Wunti, who represented the company’s Executive Vice President, Upstream, Mr. Adokiye Tombomieye, disclosed this during a panel session at the ongoing 11th Practical Nigerian Content Forum (PNC) in Uyo, Akwa Ibom State.

Wunti, also said the NNPC and its partners were making significant efforts with corresponding outcomes in the upstream oil sector, revealing that the company was bringing another American oil major to take part in the Bonga Southwest/Aparo Final Investment Decision (FID) billed to take place in 2024.

Also at the forum entitled, “Deepening Nigerian Content Opportunities in the Decade of Gas”, Waltersmith Petroman Oil Limited announced that the NCDMB would get its first dividend payment from its 5000 barrels per day modular refinery in Imo State by the end of the current financial year.

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However, issues bothering on challenges of the nation’s oil and gas industry including insecurity, high operational costs, enabling fiscal policies and other such bottlenecks were at front burner as the Nigeria Liquefied Natural Gas (NLNG) Limited, Shell, TotalEnergies and Chevron unanimously canvassed the need to address those problems to drive investments in the gas sector.

Speaking during the panel, which was on “Defining the Requisite Roadmap for Increased Gas Production,” Wunti said the achievement of the 1.59bpd production yesterday was resulted from the collaboration between the NNPC, its partners, the private security contractors and other stakeholders in the industry.

He said that meant that a significant quantity of the lost production volume had been recovered, adding that it represented an average of about 250,000 barrels over the last six months.

Wunti said, “I like talking about outcome and matching the outcomes with the efforts. We do know that in January, our budget is 1.8 million barrels per day.

“I’m sure His Excellency has not been getting the money that he should get from the treasury because the budget was anchored on 1.8 million barrels.

“It degenerated somewhere in July, August to about one million barrels. I’m glad to say, with the collaboration of every one of us and the private security contractor that we put in place, our production today is about 1.59 million barrels this morning. That means we have recovered significant quantity.

“On the average, about 250,000 barrels over the last six months, but on a snapshot, we have seen the 400,000 barrels increase that was deferred earlier as a result of significantly either stealing or as a result of our inability to produce as a result of environmental reasons and some other reasons.”

He, however, revealed that the company was bringing another American oil major to take part in the Bonga Southwest/Aparo Final Investment Decision (FID) billed to take place in 2024.

Bonga Southwest/Aparo is a conventional oil development located in deepwater in Nigeria and is operated by Shell Nigeria Exploration and Production Company Limited.

Discovered in 2001, Bonga Southwest/Aparo lies in block Oil Mining Licence (OMLs 118, 140 and 132, with water depth of around 4,395 feet.

The project is currently in approval stage and was expected to start commercial production in 2026. The FID of the project was to be approved in 2022 and the development of the asset would involve the drilling of approximately 24 wells and includes Floating Production, Storage and Offloading (FPSO) and subsea trees.

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Production from the project was expected to begin in 2026 and was forecast to peak in 2027, to approximately 146,765 bpd of crude oil and condensate and 157 Mmcfd of natural gas. Based on economic assumptions, the production would continue until the field reaches its economic limit in 2059.

Also, the field was expected to recover 759.56 million barrels of oil equivalent (Mmboe), comprised of 644.86mbbl of crude oil and condensate and 688.17bcf of natural gas reserves.

The field is owned by Shell, Eni, TotalEnergies, Chevron, Exxon Mobil and Luke Oil.

“I did mention that we’re going for FID on Bonga North either last quarter of this year or first quarter next year. I did mention that Bonga South-west is going to sleep, we’re going to focus on 2024. We’re aligning with all our partners to focus on doing Bonga South-west/Aparo.

“We’re bringing one American more to make it for Aparo. So we’re targeting the FID in 2024. Several other projects with Chevron, we hope to do the FID before the end of first quarter of 2023 – the Agbami Gas Project. All these are coming with significant gaseous hydrocarbon,” he noted.

He said the current improvement in electricity supply was a result of the security architecture, which has enabled the generation of additional 500 million standard cubic feet (scuf) of gas, assuring that the NNPC would be sending additional 250 million scuf to NLNG and 250 million scuf to the domestic market.

“That increase is making Egbin and all the other power plants around Lagos very stable. And we’re making sure that all the efforts we make we can measure them. I was very excited when I saw Simbi putting the outcome versus the input. So in upstream today, we don’t look at only the input and the output, but we go all along to capture and commend the outcome”, Wunti added.

Delivering the sponsor’s keynote address, the Chairman of the Independent Petroleum Producers Group (IPPG) and Waltersmith Petroman Oil Limited, Mr. Abdulrazaq Isa, announced that the NCDMB, which is an investor in the 5000 barrels per day Waltersmith modular refinery would be receiving its first dividend by the end of the 2022 financial year.

According to Isa, “After just 27 months of operations, NCDMB will receive its first dividend payment from the refinery for this financial year. We also forecast that by Q2 2023, the refinery will have paid off all its debt and commenced installation of another module of 5000 bpd.

“The Waltersmith Refinery which was enabled by NCDMB has been phenomenally successful.”

Isa also stated that the Minister of State for Petroleum Resources, Chief Timipre Sylva, had been instrumental in driving the Decade of Gas policy, which aims to unlock over three billion cubic feet of gas per day.

He added that this would create significant benefits for Nigeria by attracting Foreign Direct Investments (FDIs) in excess of $10 billion in addition to creation of millions of jobs across the gas value chain.

He posited that unlocking this gas potential within the decade would certainly involve big gas development projects, where the local content successes recorded on similar projects could be replicated.

He said the commitment of funds under the NCDMB’s commercial ventures partnership programme continues to stimulate investment and promote in-country capacity, adding that it was imperative that the role NCDMB had played through strategic investments and as a business catalyst on impactful projects were highlighted.

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Isa maintained that the Waltersmith refinery was a notable example of efforts of the NCDMB to promote local content through active financial participation in businesses that have huge local values.

He disclosed that the refinery has enhanced value-add from the industry by increasing local refining capacity, creating employment opportunities, and delivering diesel, kerosene, naphtha and High Fuel Oil (HFO) into the domestic market.

In his remarks, the Executive Secretary of NCDMB, Mr. Simbi Wabote, revealed that the board has achieved 54 per cent local content retention level in the Nigerian oil and gas industry in 2022.

According to him, the push for Nigerian Content as envisaged in the agency’s 10-year Strategic Roadmap has continued to yield results in the last five years, pointing out that out of the 96 initiatives under the strategic roadmap, NCDMB has completed 77.

“It is my pleasure to announce that the 2022 Nigerian Content level in the Nigerian oil and gas industry is 54 per cent based on our monitoring and evaluation of industry activities which bring the average in the last five years to 44 per cent Nigerian Content level.

“Once again, this performance is well above the minimum target of 42 per cent NC set for 2022 by the Board’s Project Management Office (PMO) just like we outperformed the 38 per cent NC target set for 2021 by achieving 42 per cent Nigerian Content.”

He listed the top-three performers of in-country spend in 2022 as Fabrication and Construction at 99 per cent NC, Manpower at 81 per cent NC, and Project Management at 80 per cent NC, while the bottom-3 performers were Procurement at 34 per cent NC, Engineering at 46 per cent NC, and Services at 50 per cent NC.

He noted that the Practical Nigerian Content Forum was a flagship event of the Board which attracts major stakeholders in the oil and gas industry from across Nigeria.

“The event serves as an opportunity to showcase the practical investment opportunities and achievements by NCDMB in the Nigerian oil and gas industry and its linkage sectors.

“It also hosts senior government officials, heads of International and Indigenous Oil Companies, and exhibitions of industry products and services in the upcoming event.”

However, in their separate interventions during the panel session moderated by the pioneer Executive Secretary of NCDMB, Dr. Ernest Nwapa, the Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company Limited (SPDC), Mr. Osagie Okunbor; Managing Director of TotalEnergies Upstream Nigeria Limited, Mr. Mike Sangster; Managing Director of Chevron Nigeria Limited, Mr. Rick Kennedy; and Deputy Managing Director of NLNG, Mr. Olalekan Ogunleye, harped on the need to address the challenges confronting operators in the nation’s oil and gas industry.

They listed such issues as insecurity, high operational costs, unfavourable fiscal policies and other such bottlenecks that make Investments in the industry especially achieving the Decade of Gad agenda difficult.

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$1bn investment recorded in auto industry – Minister

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The Federal Government has recorded more than one billion dollars’ worth of investments in the automotive industry. Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo, said this in Abuja on Tuesday when he featured at the 20th edition of President Muhammadu Buhari’s administration scorecard series organsied by the Federal Ministry of Information and Culture.

“Over one billion dollars in investment has been recorded in the automotive sector and we are ready to move on to the next phase for the automotive industry,” the minister said.

He said the review of the National Automotive Industry Development Plan (NAIDP) was almost completed, adding that the plan was going through validation process.

Adebayo restated the ministry’s commitment toward enabling business environment to attract and retain investments.

According to him, the ministry and the Nigerian Investment Promotion Council (NIPC) are committed to attracting and protecting investments that genuinely benefit Nigeria and its citizens.

He said that the revised Bilateral Investment Treaty (BIT) would boost investment.

“Nigeria has successfully revised its model Bilateral Investment Treaty (BIT) to include a specific provision for investment facilitation, which institutionalizes the principle of assisting investors in completing their investments.

“We are proud to offer Nigeria’s first investment policy to the Federal Executive Council (FEC) for approval.

“This strategic statement, which will outline our priorities, aims, commitments, and expectations, is a turning point for the Federal Ministry of Industry, Trade, and Investment and Nigeria as an investment destination,” he said.

Adebayo, who said that Nigeria had Investment Promotion and Protection Agreements (IPPAs) with Singapore, Morocco, and Saudi Arabia to attract and retain investments, said the ministry was developing more.

“We have IPPAs with Singapore, Morocco, and Saudi Arabia to attract and retain investments. The president ratified both accords on Sept. 16, 2022 and we are developing more IPPAs,” he said.

Adebayo said the ministry also distributed 5,571 acceptance certificates worth N7.7 trillion to 2,665,800 firms.

“The acceptance certificates allow businesses claim tax reduction when computing Company Income Tax.

“We also issued more than 130 Production Day Certificates, a crucial Pioneer Status Incentive step,’’ the minister said.

To further accelerate industrialisation, Adebayo said that the ministry was expediting the establishment of Special Economic Zones (SEZs) across the country.

According to him, the special economic zones will increase infrastructure availability and provide fiscal incentives for value addition.

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Pay customers with N100, N50, CBN orders commercial banks

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The Central Bank Of Nigeria has directed all commercial banks to pay customers over the counter in N100, N50, N20, N10, and N5 notes, regardless of the amount withdrawn.

Bankers Committee issued the directives to all commercial banks in the country on Monday, and announced the discontinuation of old notes payment of N1000, N500 and N200 across the counters.

It also urged people to use their alternative channels for transactions, while those insisting on new naira notes were advised to use Automated Teller Machine (ATMs).

The directives came on Monday, following a meeting of the bankers committee in Lagos.

The CBN Governor, Godwin Emefiele, in a statement on Sunday extended the deadline for old naira notes from January 31 to February 10, 2023.

Emefiele also noted that he obtained permission from President Muhmammadu Buhari to effect the extension.

According to him, the extension, ‘a seven-day grace period’ was as a result of measures put in place to ease the scarcity.

The decision is coming after CBN had previously insisted that it would not extend the deadline.

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Famous 4×4 Grenadier coming to Nigeria, courtesy Coscharis Motors

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Coscharis Motors has announced its readiness to introduce the popular rugged off-road vehicle, Grenadier, to the Nigerian auto market.

This follows the naming of the auto company by INEOS Automotive as its official retail partner in Nigeria.

Nigeria is the sixth market in Sub-Sahara Africa to join the brand after South Africa, Kenya, Tanzania, Namibia and Botswana.

A statement on Monday by Abiona Babarinde, the auto firm’s General Manager, Marketing and Corporate Communications, said, “The first Grenadier demonstrator vehicles are expected to arrive in Nigeria in early 2023 with customer deliveries expected to commence within the first quarter.

“All after-sales servicing will be conducted at a dedicated workshop also located in Lagos.”

Commenting on this partnership, the President/CEO of Coscharis Group, Dr Cosmas Maduka, said, “We are proud that INEOS Automotive has appointed Coscharis Motors to represent its brand in Nigeria. “This milestone marks another step in the evolution of our company. With our history and experience of the Nigerian market, we know that the INEOS Grenadier is going to be a serious player in the off-road segment.

“We have no doubt that the Grenadier has what it takes to handle Africa’s tough terrain and that it is the perfect option to meet the specific demands of those who need a capable, refined, and reliable off-road vehicle in the region. We look forward to the first customer test drives and hearing public feedback, because this vehicle is definitely going to stir things up in Nigeria.”

The statement quoted Tim Abbott, INEOS Automotive’s Head of Region South Africa and Sub-Sahara Africa, as saying, “We are carefully selecting our partners across the SSA region, to find people who know their local market and customers, and also understand our brand.

“Coscharis Motors shares our belief that the INEOS Grenadier is the perfect vehicle not only for Nigeria, but for the continent. Our shared passion for off-roading, along with their excellent reputation in the automotive industry, makes it the perfect partnership for Grenadier in Nigeria.”

Coscharis says the Grenadier has been developed to be refined on the road and extraordinarily capable off-road.

“The Grenadier is powered by a choice of two straight-six, 3.0-litre BMW engines. Both the BMW B57 diesel and B58 petrol powertrains have a proven track record, regularly appearing in top ten world’s best engine lists since 2016. They have been used in everything from sports cars to SUVs.

“The two power units bring BMW’s sophistication and refinement to the Grenadier, but they have been enhanced by INEOS Automotive’s engineering team. As well as providing powerful acceleration on tarmac, they also deliver peak torque at low revs – sustaining it through the rev range – for optimal off-road performance,” it states.

It also notes that the carefully calibrated characteristics help the driver to confidently manage the vehicle’s momentum and grip without stressing the engine, ensuring full control when tackling tricky terrain.

It adds, “The refined turbo petrol engine produces 286PS (210kW) and 450Nm (332 lb ft) of torque, while the twin-turbo diesel generates 249PS (183kW) and 550Nm (406 lb ft), for even greater pulling power. Start/stop is built-in, increasing range and preserving air quality when the vehicle is stationary.

“While it is every inch a rugged 4X4, it ticks all the right boxes on the road, too. The chassis combines a five-link suspension setup with Brembo brakes and Bridgestone tyres, meaning the Grenadier is composed, well- mannered and fun to drive no matter what the terrain.”

The firm also reveals that by the end of this year, INEOS Automotive plans to have a network of more than 200 sales and service sites for the Grenadier spanning over 50 countries, including established dealer groups, 4X4 specialists and agricultural equipment dealers.

 

 

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