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Nigeria’s crude exports suffer setback, 18 cargoes unsold

By News Express on 16/06/2014

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There were indications that differentials of Nigerian crude oil grades may fall this week, as about 18 cargoes scheduled for July exports remained unsold.

Meanwhile, the Nigerian National Petroleum Corporation (NNPC) has begun to strategise on the best modalities to adopt, over emerging challenges from the rising competition at the global supply market.

Trade sources showed apathy for the sweet crude exports with the sizable number awaiting orders, out of 63 cargoes schedules for export in the month.

This is coming as the Shell Petroleum Development Company of Nigeria Limited (SPDC) suspended production from its EA oil field in the Niger Delta.

Out of the overhangs, there were two EA cargoes for both June and July, which are likely to be postponed due to the force majeure.

As the market expects the August loading programme between today and tomorrow, it was noted that only about two or three cargoes of July-loading for Angolan crude were still on sale.

Differentials for Nigerian cargoes have also inched lower, but traders say they will have to fall further before the remaining 18 vessels would find buyers.

“If you chart assessed differentials there’s a small correction (on Nigerian cargoes) and a sharp sell-off (for Angolan), only one has flown off the shelves,” a trader said.

SPDC had announced production deferment from its EA oil field in the Niger Delta.

This would lead to an output shortage of about 40,000 barrels per day (bpd), indicating that Nigeria may not be able meet some of its export commitment for the month, with the declaration of force majeure.

“Force majeure” is a legal term releasing a company from contractual obligations when faced with circumstances beyond its control.

Corporate Media Relations Manager, SPDC, Precious Okolobo, who confirmed the outage in statement to The Guardian, said the shut is to allow for repairs on its soft yoke mooring platform which is crucial to the production process.

He stated: “Production at SPDC operated Joint Venture has suspended production at the EA field for repair of the soft yoke mooring platform (SYMP) which connects the Floating Production Storage and Offloading (FPSO) vessel, Sea Eagle with the mooring platform. Some 40,000 barrels of oil per day production is deferred.”

According to him, the recent bad weather offshore caused a damaged on the SYMP bearing thereby necessitating the shutdown of the facility. Effective 1200hrs (Nigerian time) today (June 12), SPDC declared force majeure on off-takes for the EA blend until the work programme is completed and production resumed.

The EA field is located south west of Warri in water depths of around 25 metres. First oil was achieved on December 14, 2002.

SPDC recently resumed crude exports from the Forcados terminal on March 25, following the removal of a crude theft point on the export line.

The company shut the underwater pipeline when a leak was discovered on March 4, leading to the suspension of exports through the terminal, which can produce up to 400,000 barrels of crude per day.

The Group Managing Director of NNPC, Andrew Yakubu, has tasked the corporation’s Business Development Directorate to evolve innovative and proactive strategies for identifying new business opportunities that could capture and create value for the corporation.

Yakubu made this challenge at the opening ceremony of a two-day workshop with the theme: “Value Creation: An Optimum to Business Development” organised by the Business Development Directorate of NNPC to brainstorm, build the capacity of staff, and chart a way forward for the Directorate.

The NNPC boss, who pledged utmost support to the Directorate on account of its strategic importance as the engine room of creative business ideas that could sustain and propel the corporation to higher heights, urged the Directorate to wake up to its responsibilities.

He said: “The time to take your mandate more seriously is now… For NNPC to realise its vision of becoming a world class oil and gas company in line with our transformation roadmap which includes the right to play on the global scene, a strong business development capability must be a top and strategic priority.”

According to him, the evolving business environment in the international energy scene with regard to the development of shale gas in the United States of America as well as the increasing competition from traditional oil producers like Angola and new oil producers like Ghana, Ethiopia, Kenya, Uganda and others present challenges that should propel the Business Development Directorate to lead the charge in developing strategies for NNPC to take advantage of the opportunities offered by the changes. 

Group General Manager, Group Public Affairs Division, NNPC, Ohi Alegbe, quoted Yakubu as urging the Directorate to “build the necessary capabilities and skills and seek collaboration from within and outside the NNPC business ecosystem” in order to fulfill its mandate.

Yakubu also called for a high-level cooperation and interaction between the Business Development Directorate and other Directorates in order to achieve synergy and unity of purpose in the process of exploring new business opportunities, adding: “While the Business Development Directorate must take leading roles in identifying opportunities for the organisation, a shared-value strategy must underpin our growth aspirations.”

The Group Executive Director, Business Development Directorate of the NNPC, Ms. Aisha Abdurrahman, stated that it was her concern about the sub-optimal level of activities in the Directorate that inspired her to organise the workshop to generate ideas and chat a roadmap for actualising the Directorate’s mandate.

•Source: The Guardian. Photo shows NNPC Group Managing Director, Andrew Yakubu.

Source News Express

Posted 16/06/2014 2:19:33 PM


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