Oil
Nigerian politicians profit from oil theft – Wikileaks
Nigeria’s political elite and the military have profited from large scale oil theft in the Niger Delta which may cost the country up to a tenth of its production, according to a U.S, cable leaked by Wikileaks.
The report further stated that Nigeria is the world’s eighth biggest exporter of crude oil but thieves take a sizeable proportion of its output by drilling into pipelines or sometimes hijacking barges loaded with oil, a type of theft known locally as bunkering.
According to the U S Consul General, Donna M. Blair, Oil theft, widely referred to as illegal bunkering in Nigeria, represents significant economic activity with serious ramifications for Nigeria’s economy, security, democracy and environment,
“No other major oil-producing country loses as much revenue from illicit oil bunkering as Nigeria largely because the political elite, militants, and communities profit from such operations,” Blair added.
“Nigerian officials repeatedly request U.S. assistance to prevent bunkering. The reality, however, is that most oil bunkering is not a global phenomenon readily susceptible to international deterrence, but a largely Nigerian development that requires domestic resolution,” the cable said.
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Wikileaks also suggested that a Joint Military Task Force, JTF, tasked with quelling militancy in the Delta at the time was also involved, adding that, it even likened the JTF and the militants to rival drug gangs.
“Some observers compared the relationship between the JTF and major militant groups to arrangements between rival gangs in U.S. urban areas; generally each JTF unit and militant band had its own territory in which they operated and from which they derived their illicit incomes,” it said.
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“Profits from illegal bunkering became high enough in the last several years to enable both JTF members and militants to profit and co-exist without seriously interfering with each other’s activities. Fighting only erupted when disputes arose about boundaries.”
Some estimates say 100,000 barrels of crude are stolen from the Niger Delta each day, about five percent of the country’s crude production. The cable suggested it may even be more.
“Various experts have estimated the volume of oil theft at between 100,000 and 250,000 barrels per day or as much as 91 million barrels per year. This amounts to billions of dollars in lost revenue for the Nigerian treasury every year,” it said.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
Business
Dangote not truthful on petrol prices in Saudi Arabia- Findings
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Oil
Why Dangote’s PMS Prices Can’t Be Reduced In Nigeria – Adeoye
It is no longer news that Nigeria reached a major milestone with the launch of the Dangote Refinery, allowing the country to produce its own petrol instead of importing it.
Consequently, Nigerians expected fuel prices to drop, which would help lower the rising costs of goods caused by the high price of petrol, but that has not been the case.
Recall that the first batch of PMS from the Dangote Refinery hit the market on Sunday as promised by the federal government.
However the smiles on Nigerians faces quickly wore off and their hope on the refinery for a reduced fuel price after recent increment of pump price was dashed with the price sold to the Nigerian National Petroleum Company Limited (NNPC Ltd).
Many Nigerians who had anticipated a lesser price compared to the present market price of between N855 and N950 were jolted when the NNPC Ltd released a price template for the stock received from the refinery.
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By implication, the price of Dangote PMS is over N100 costlier than the existing market price from NNPC retail stations and other major stations which has caused more fumes and complains by Nigerians.
Shedding light over the issues surrounding petrol price, an energy policy analyst, Yemi Adeoye while speaking on Friday at TVC Business News explained why PMS cannot be sold at lesser price by Dangote.
Adeoye explained that the NNPC is not the regulator of PMS if not an official announcement should have been made instead of Dangote’s instead NNPC is operating as a joint venture with Dangote like it is with every other international oil operating companies in Nigeria, which has come down to the relationship between Dangote Refinery and the NNPC. NNPC supplies Dangute crude oil, while the latter come back with refined PMS.
He also noted that the average price for gas everywhere in the world as well as U.S. is $3.33 in gallons, which amounts to N5,279 in Naira. He explained that a gallon is 4 liters and breaking it down per liter is N1,019.75, which Dangote would have been selling their PMS if allowed to function as a business entity. Therefore, the normal price should have been nothing less than N1,300 per liter without the regulation.
Explaining further, Adeoye said, “Nigeria produces crude oil but refining it requires several steps. First, crude oil must be extracted, which necessitates the use of an oil rig. The cheapest oil rig available costs around $100,000 to $150,000 per day. These factors, among others, contribute to the pricing of Premium Motor Spirit (PMS) because it is an international commodity.” while noting that Dangote would not have announced the price without the regulation of the NNPC.
Adeoye said the commitment of NNPC towards this is supplying crude oil to Dangote in naira instead of dollars which is fair.
“If Dangote should sell PMS as it should, it will be nothing less than N1300. The united state is the highest producer of crude oil with 32 refinaries and sells at N1,319 per liter talkless of Nigeria who owns just one refinary, he added.
Finally, Adeoye said PMS hike is a global phenomenal and it is affecting everything.
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