Shale oil fracking faces more trouble next year

Recent developments and forecasts from the international energy/economic agencies indicate that the shale oil franking may also get into deeper troubles by 2016.

This indication appears not the best for the United States (U.S.) which is leading the shale franking technology, as its production tends to drop and the hope to capture the export market fades.

Indeed, the United States’ Energy Information Administration predicts that companies operating in U.S. shale formations will cut production by a record 570,000 barrels a day in 2016.

The International Monetary Fund (IMF) had also predicted that the crude oil prices will fall to about $20 per barrel next year, which would be making it more difficult for the franking companies to survive the business as cost of producing shale is estimated $50 per barrel.

Reports however, showed that the fracking outfits that make US oil-rich plains threw everything they had at $50-a- barrel crude in 2015. To cope with the 50 percent price plunge, they laid off thousands of roughnecks, focused their rigs on the biggest gushers only and used cutting-edge technology to squeeze all the oil they could out of every well.

Those efforts appears to have largely succeeded, but with the prices crashing to 11 year low at $37 per barrel, tough times are ahead for them to cope with costs.

Meanwhile, the Organization of Petroleum Exporting Countries (OPEC), in its latest world oil report, said U.S. shale oil production will be more resilient than previously expected.

OPEC said it expects U.S. crude oil production from shale deposits to increase from 3.8 million barrels per day in 2014 to 4.9 million bpd by 2023. By 2040, the trend will start to reverse as U.S. shale output falls to 4.2 million bpd.

“Although the updated forecast for the 2015 outlook shows that U.S. tight crude (oil production) will decline gradually over the long-term to 4.2 million bpd in 2040, in the 2014 outlook, it was projected at only 2.8 million bpd in 2040,” the report said.

Biafra: Kanu apologises to Buhari, Jonathan, Igbo elders

THE leader of the Indigenous People of Biafra and founder of Radio Biafra, Nnamdi Kanu, has expressed regret for referring to President Muhammadu Buhari as a terrorist, evil and a paedophile in his radio broadcasts.

Kanu, who has been charged along with two others by the Federal Government before a Federal High Court in Abuja on six counts of treason and other ancillary offences, said he intended to write a private letter to Buhari to express his apology to the President.

 

He also apologised to former President Goodluck Jonathan and Igbo elders for “some uncomplimentary things” he said about them.

The 48-year-old pro-Biafran agitation leader, who is, however, unapologetic about his demand for a Republic of Biafra, has been in the custody of the Department of State Services since his arrest in Lagos on October 14, 2015.

He tendered the apology for his comment against Buhari and others in a statement which he made to the DSS on October 23.

The prosecution, in its summary of the case, alleged that in one of the radio broadcasts by Kanu on August 1, 2015, he expressed his resolve to actualise the Republic of Biafra and “cast aspersions on the person and the office of the President of the Federal Republic of Nigeria”.

The statement read in part, “Reference to the President of the Federal Republic of Nigeria as a terrorist, evil and a paedophile is regrettable and uncalled for and for that, I unreservedly apologise and will be doing so in a private letter to the President.

“Before PMB (President Muhammadu Buhari) there was the administration of Goodluck Jonathan. I also said uncomplimentary things about him and Igbo elders as well, which I now recognise should not have happened because it is un-African to be rude or insolent to elders.

“All I was trying to do is to draw attention to the problems afflicting society and something done about them.”

Kanu, who described himself as a Nigerian and a British citizen, justified his agitation for a Biafra Republic.

He said IPOB’s secessionist agenda was informed by the “incessant hardship, lack of holistic development in the socio-economic landscape of Nigeria, lack of youth employment, corruption in high offices and economic regression.”

He added that the agitation by IPOB, which, according to him, was founded in London in 2012 by a group of people from the South-South and South-East regions of the country, was in line with the United 

Nations Charter on the Rights of Indigenous Peoples ratified by African countries, including Nigeria.

In contrast to the counts of managing and assisting in the management of an unlawful society preferred against Kanu and two others, the Radio Biafra founder stated that IPOB, which the prosecution described as unlawful, was registered with the UN to pursue the rights of the people of Biafra.

He stated, “I can confirm that I, Nnamdi Kanu, is the leader of Indigenous People of Biafra worldwide as a legitimately and duly registered body at the United Nations pursuing the rights of a specific indigenous people, in this case, Biafra, to seek self determination according to the said charter.

“The reason for the formation of the Indigenous People of Biafra is to avail those referring to themselves as Biafrans the opportunity made available as a result of the United Nations declaration to seek the peaceful rebirth of Biafra in line with international law.”

Kanu, who is a son of a traditional ruler in Abia State, Sir I.O. Kanu, said he operated Radio Biafra, whose programmes “are designed to wake up the public from its slumber and address the issues of the time” because of his belief in free speech and freedom of expression.

He explained that the intended Biafra Republic comprised Enugu, Ebonyi, Abia, Imo, Anambra, Cross River, Akwa Ibom, Rivers, Bayelsa and Delta states as well the Igbanke part of Edo State; Igala part of Kogi State and Idoma/Igede part of Edo State.

Apart from Kanu, one of the two other defendants in the six counts filed by the Federal Government is a Field Maintenance Engineer, David Nwawuisi, charged with the responsibility of maintaining MTN masts in Enugu State.

The other defendant, Benjamin Madubugwu, was said to be living in the Ubilisiuzo, Ihiala Local Government Area of Anambra State, where he allegedly received custody of a container, housing transmitters, from Kanu.

On December 23 during the accused persons’ appearance in court for their scheduled arraignment, Kanu 

refused to take his plea due to what he called his lack of confidence in the presiding judge, Justice Ahmed Mohammed.

The judge promptly returned the case file to the Chief Judge of the Federal High Court, Justice Ibrahim Auta, for reassignment to another judge and the three accused persons were returned to the custody of the Department of State Services.

The fresh charges were filed against the three men barely 24 hours after Justice Adeniyi Ademola, in a ruling on Kanu’s bail application on December 17, ordered his unconditional release from DSS custody having been detained for about two months without any valid charges filed against him.

N6.08trn budget: Nigeria going the way of Greece —PDP

Olisa Metuh

THE national leadership of the Peoples Democratic Party, PDP, yesterday took a swipe at President Muhammadu Buhari and the All Progressives Congress, APC-led government, saying with government’s proposed N1.84 trillion borrowing as contained in the 2016 budget, Nigeria as a country was going the way of Greece.

Speaking with journalists, yesterday,  in Abuja, PDP National Publicity Secretary, Chief Olisa Metuh, noted that a breakdown of the N1.84 trillion shows that Nigeria would be borrowing N5 billion a day for the next 365 days, starting from January I, 2016, without what he termed, a corresponding provision for economic production and a clear repayment plan, adding that the scenario would  spell doom for the future of the nation.

According to PDP, President Buhari must explain to Nigerians why the N6.08 trillion 2016 federal budget would not be considered a huge fraud, designed to mortgage the future of the country, just as it challenged the Federal Government to a public and open debate on the budget devoid of sentiments of the APC-controlled National Assembly and who are minded against any cuts in their own allocation.

Metuh said: “Some people may be wondering why we raised an alarm about the budget. The reason is simple. When we analysed the budget, we discovered it is a misshapen attempt at a Keynesian economics of applying deficit spending to stimulate growth even when studies have proven that GDP growth rates decrease by over 50 per cent when debt goes from low or moderate to high. But then we know the borrowing here is to pay huge campaign debt and fund a political war chest.

“By every standard, this budget is a booby trap against the nation. When you break down the proposed N1.84 trillion borrowing, you discover that it amounts to borrowing N5 billion everyday for the 365 days in 2016. The questions are: for what specific projects are they borrowing N5 billion per day and how do they intend to pay back?

“The President should explain to Nigerians how they intend to pay back the loan. Is it by continuous borrowing to service the interests, and does he intend to accumulate colossal debt for future generations of Nigerians?

“The truth is that this administration cannot justify this proposal. There is no known economy in the world where you can justify borrowing N1.84 trillion without specific projects and precise repayment outline. This is worse still in an oil-driven, mono-economy at a time crude oil is selling at $30 per barrel and is speculated to go down to about $20 or even lower in the next one year. The idea can only come when you diversify the economy and boost production capacity in manufacturing and other critical sectors, a direction, which the budget clearly failed to provide. “

Petrol to sell for N86/litre from January, 2016 – FG

The Federal Government, yesterday, stated that effective January 1, 2016, Premium Motor Spirit, otherwise known as petrol, would be sold at N86 per litre by the Nigerian National Petroleum Corporation, NNPC Retail stations, while other oil marketers would sell at N86.50 per litre.

The Nigerian Labour Congress said, however, that it would resist with all its might, any attempt to remove fuel subsidy.

Speaking to newsmen in Abuja, Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Farouk Ahmed, also announced the first quarter 2016 PMS import allocation of three million metric tonnes to the NNPC and other oil marketers.

On the review of the price of petrol, Ahmed said the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.

According him, the revised template, which would be reviewed on quarterly basis and which would soon be presented to oil marketers, is geared towards ensuring an efficient and market-driven price that would reflect current realities.

He said: “Since 2007, while crude oil price had been moving up and down, the template remained the same. This had made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.

“However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward, depending on the market condition.

“If there is no major shift, that is, if there is a marginal change, the price would continue from January to March, 2016. In addition, there would be a Product Pricing Advisory Committee that would be set up to advise the PPPRA concerning movements in the price of crude oil.”

He said the NNPC would sell lower than other oil marketers, due to the fact that it is cheaper for it to import, compared to the independent and major oil marketers.

He listed the major components affected by the review in the pricing template to include: Traders Margin, Lightering Expenses, Nigerian Ports Authority (NPA) Charges, Jetty Throughput and Storage Charges, as well as Bridging Fund. Other components include: Retailers, Transports and Dealer margins.

Giving a breakdown of the revised template, Ahmed disclosed that Trader’s margin, which is the amount paid to traders for bringing the commodity into Nigeria, has been eliminated, from N1.47 per litre previously; Lightering Expenses reduced from N4.07 per litre to N2 per litre; NPA, reduced from N0.77 to N0.36 per litre; while Jetty Throughput and Storage charges were reduced from N0.80 and N3, to N0.40 and N1.50 per litre respectively.

On the other hand, Retailers margin was increased to N5 per litre from N4.60; Transporters rose to N3.05 from N2.99; dealers margin was reviewed upward to N1.95 from N1.75, while bridging fund dropped to N4 per litre from N5.85.

To this end, Ahmed put the Ex-depot price of PMS at N77 per litre, compared to N77.66 per litre; open market price would be N86.29 for oil marketers and N85.93 per litre for the NNPC, while he stated that pump price for oil marketers would be N86.50 per litre and NNPC, N86 per litre.

On the issue of PMS import allocation to the NNPC and other marketers, Ahmed said that the PPPRA, in a bid to guarantee uninterrupted fuel supply nationwide, took into consideration the issue of retail outlets ownership, marketers’ performance of previous quarterly allocation, as well as the challenges in sourcing foreign exchange.

He lamented the fact that in the fourth quarter of 2015, the NNPC was the major supplier of PMS in Nigeria, as it supplied over 111 per cent of their allocation, major marketers supplied only about 36 per cent of their allocation, while independent marketers and Depot and Petroleum Products Marketers Association, DAPPMA, supplied only about 38 per cent of their allocations.

He said: “Consequently, the NNPC was granted 78 per cent of the total allocated volume for the first quarter of 2016, while the balance is to be supplied by other oil marketing companies.

“Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers shall be withdrawn and reallocated to performing marketers.

NNPC Mega Filling Station now selling at N138 per litre in Abuja yesterday.

“Furthermore, the PPPRA wishes to reiterate that consideration for participation in future allocations shall be on the basis of attainment of 100 per cent performance in first quarter 2016.

“Accordingly, the PPPRA hereby warns that any marketer found selling above the PPPRA approved price shall be appropriately sanctioned. These include, but not limited to, exclusion from future participation in product importation and revocation of licences.”

We will resist fuel subsidy removal —NLC

Meanwhile, Nigeria Labour Congress, NLC, yesterday, said it was aware of the discordant tunes by government officials and All Progressives Congress, APC’s chieftains on petroleum products and management of subsidy scheme, insisting that it would resist any attempt to remove fuel subsidy with all its might.

NLC said it had since December 22, directed all its affiliates to commence mobilization of members for eventuality, noting that workers and indeed Nigerian masses would not accept any removal of subsidy through the back door.

In a statement by Dr. Peter Ozo-Eson, General Secretary to the Ayuba Wabba faction of NLC, congress said: “In the past few weeks, we have heard discordant tunes from government officials and chieftains of the ruling APC on what the future portends for the prices of petroleum products and the management of the subsidy scheme. Party chieftains who supported and encouraged the massive protests against subsidy removal in 2012 are now preaching the inevitability of subsidy removal! The Minister of State for Petroleum first announced that come next year the price of petrol will revert to N97 per litre and that subsidy will be phased out. Two days after, he denied this and stated that what he said was that the price will operate within a band of N87 to N97 and that this did not mean removing the subsidy. The same minister now says that the price of petrol will now be N86 in January, signifying the deregulation of the sector.

“These vacillations and flip flops are, in our view, designed to confuse Nigerians and pave the way for deregulation of petrol prices through the back door. The fact of the matter is that as long as we continue to depend on imported refined products, deregulation and the abandonment of a subsidy scheme will unleash hardship on Nigerians. In any case, according to our laws, the determination of the recommended prices of petroleum products is the responsibility of the Petroleum Products Prices Regulatory Agency (PPPRA). By law, the board of PPPRA is made up of stakeholders. None of the contradictory prices the minister is throwing up is a product of the agency. Indeed, the board of the PPPRA has not operated for over two years although we have made repeated demands for the convening of the board.”

According to the statement: “We call on the government to be guided by the rule of law and constitute and convene the board of PPPRA in accordance with the law without further delay. This will enable the agency to examine and agree a new pricing template based on the realities of today. Any price unilaterally determined and announced by the minister is in violation of the law.

“In the meantime, we wish to restate our opposition, adopted at our Central Working Committee Emergency Meeting of 22nd December, to any attempt by the government to increase the price of or remove subsidy on petrol.”

How we’ll fund N5,000 welfare scheme —Lai Mohammed

Minister of Information and Culture, Alhaji Lai Mohammed

THE Federal Government, yesterday, explained how it would fund the N5,000 monthly welfare payment to vulnerable Nigerians just as it reaffirmed that the Boko Haram insurgency had been technically suppressed.

The minister also disclosed that the insurgents had been restricted into two local government areas of the 30 local government areas they controlled at the onset of the Muhammadu Buhari administration.

Funding of N5,000 welfare scheme

On how the funding of the N5,000 welfare scheme would be achieved, Mohammed said: “What we want to achieve by our social intervention of which the conditional transfer is just one part, is to move out millions of Nigerians from poverty. That is why we have this half a trillion naira social intervention.

“Part of what we intend to do with the half a trillion naira is to train market women, artisans and unemployed graduates in the art of management and also give them loans to start their own businesses. Part of our social intervention also includes the transfer of N5,000 to the most vulnerable people.

“And we are being partnered in this by the World Bank and other multilateral organisations. It has been done in many countries before and we believe that it can be done here. Many people have written ridiculously about N5,000 and claimed that it is not up to what they spend on recharge cards. And we said yes, those who are writing such things are not the average Nigerians we are seeking to help.
“If you look at the lady who is selling water melon or pawpaw, she does not have up to N5,000 capital. People don’t know that N5,000 can be meaningful for many Nigerians because they are too comfortable in their corners. They do not know that N5,000 can make the difference between life and death for many Nigerians.

“Many people have died because they cannot afford transportation to the health centres. We are grappling with the reality on ground and we know that this conditional cash transfer is working in some states and it is being piloted by DIFID. In Jigawa, Yobe, and Kano, a British group is tying the conditional N5,000 transfer on a pilot scheme.

“When we say conditional transfer, it means that you must show evidence that you have enrolled your children in school and immunised them. It is not just that we are giving you money free, you must also show evidence that you have complied with some obligations. We know it works because it has increased school enrolment, led to a drop in mortality rate and decline in stunted growth.

“Apart from blockages and savings, there are many government institutions today, who ought to be returning money to the treasury but they are not doing so. We know that some organisations made over N20 billion last year but returned less than N100 million to the treasury.

“This is why the idea of the Treasury Single Account is so important to us. We are going back to the basics. We believe that the money for this project will come from savings, budget and prudent management. Also we are going to have support from multilateral organisations, especially in the area of cash transfer. Again some of these projects are not just recurrent, they are also capital in a way.”

Pandemonium in Badagry over iman’s alleged bid to use lover for money ritual

Badagry: The 20-year-old victim, Busayo Amdalat in hospital

Mowo 11, a suburb of Olorunda Local Council Development Area of Badagry area in Lagos State, was yesterday thrown into pandemonium, as an Islamic cleric, Mallam Shehu, popularly referred to as Alhaji Sambo, attempted to use his 20-year-old lover, Busayo Amdalat, for money ritual.

The victim, who resides in Ibeju-Lekki, was said to have visited the cleric at Mowo Phase 2 in Badagry to spend the Christmas holidays.

It was gathered that in the early hours of yesterday, the cleric had a visitor known as Ifa and they asked the victim to put on a white cloth and when she did, the cleric and his accomplice hit Busayo with an iron rod on her head.

Slashing the victim’s throat
It was gathered that when Sambo’s accomplice, Ifa was slashing the victim’s throat, she was able to muster courage by hitting Ifa on the head with a bottle and in the process ran to a nearby street where a carnival was taking place.
Rushed to hospital

Some residents, who saw her drenched in a pool of blood with injuries inflicted on her neck and other parts of her body, quickly rushed her to an undisclosed hospital in the area.

A resident, Taiwo Abdulraman, who spoke with Vanguard said, the residents quickly mobilized themselves into two groups; one of them went after the cleric and his friend, Ifa, while others took the lady to hospital.

“We quickly mobilised and went after him, when we got to his house, we saw blood in parts of the building. There were lots of charms and other fetish substances in his house. We saw the iron rod and the sharp knife he used on her, but we didn’t meet him in the house. We also quickly mobilized and went to his second house at MTN Bus Stop, but he was nowhere to be found, he said.”

When Vanguard paid a visit to the hospital where the 20-year-old victim was being treated, her face and neck were covered with plaster.
The victim speaks

Narrating her ordeal, Miss Amadalat said “We both had a quarrel before now for close to three weeks. I knew his first wife before she died but the second wife did not want him (Sambo) to marry me but he resolved that he was going to marry me. I even got pregnant for him but he rejected the pregnancy at some point in time.

“I went to report him to a Muslim cleric but the cleric said there was nothing he could do to convince my lover to accept the pregnancy. For about two months, I did not call Sambo and because of the issue, I changed my telephone number.”

She said after Sambo apologized to her she forgave him.

Badagry: The Islamic cleric, Alhaji Sambo

Her words: “So, yesterday, Sambo and a man called Ifa were having a discussion in his house. Before I knew it, he started taking lots of alcohol, when I cautioned him; he refused to listen to me. He even offered me some but I rejected it.

“Later that night, he asked me to wrap myself in a white clothing of which I obliged. The man called Ifa wanted to use a cloth to cover my face and in the process, Sambo came in with an iron rod and hit me on the head. I shouted but nobody heard me because it was a bushy area.

“Ifa and Sambo attacked me with a knife but I managed to lock myself in a room. I now lied to them I had called one of the neighbours, it was in that process that they left and I managed to escape from the house.”

Obat Petroleum in N1.2bn subsidy diversion controversy...EFCC to investigate

Chairman, Obat Petroleum, Oba Frederick Akinrutan

 

By Oluwagbenga Bankole

The Economic and Financial Crimes Commission is set to investigate Obat Oil and Petroleum Limited over the reported illegal diversion of N1.2b subsidy claims to the personal account of its chairman, Oba Frederick Akinrutan.

According to a document obtained by our correspondent, Petrocam Trading Nigeria Limited entered a joint agreement with Obat Oil Petroleum Limited to import some metric tones of Premium Motor Spirit (PMS) popularly known as petrol. In the agreement, Petrocam is the marketer, while Obat is the contractor.

The contractor which is Obat, hereby engaged the marketer which is Petrocam to finance the business whether by its own resources or through its Bank and Obat accept such engagement on the terms and condition in the contract both companies jointly signed.

Petrocam (Marketer) approached and got for advances to finance the business from Sterling Bank Plc, through which bank all known payment are made.

A collection account no. 0020560534, Obat Oil and Petroleum Limited with Sterling bank plc was opened to take receivables from the transaction primarily for the purpose of repaying the loans Petrocam took from Sterling bank to finance the project.

It was however gathered that Obat Oil diverted N1.2b, money meant for Petrocam to liquidate the loan it took to finance the business to its Access Bank account and later wanted to move it to Asset Management Corporation of Nigeria (AMCON) First Bank account in order to clear a debt they owe a client. Our correspondent gathered that the EFCC blocked Obat Oil from moving the money to AMCON.

Our correspondent authoritatively gathered from a reliable source in AMCON that a client which Obat Oil owe went to report them to AMCON and that is why they diverted the subsidy disbursement in order to clear the debt.

A source at the EFCC who does not want his name in print said that the EFCC will investigate the issue and charge Obat Oil to court if the allegation leveled against them is true.

Meanwhile, in a letter written to Obat Oil by Sterling Bank Plc which financed the business, signed by its General Manager Corporate, Mr. Adegboyega Adegun and Assistant General Manager, Corporate, Mr. Abiodun Odutola, the bank stated that; “we write to advice that we are aware that the Sovereign Debt Note serial number FGN/2014/01/Q14/1673 and FGN/2014/01/R14/1694 due on the joint venture transactions between Petrocam Trading Oil Limited and Obat Oil and Petroleum Limited which were financed by Sterling Bank are part of the subsidy payment approved and paid by government as published by Business Day newspaper of December 11, 2015. ”

It further stated that; “as banker of these transactions, we write to demand that all subsidy proceeds accruing to the transaction including exchange rate differentials and all other relevant claims from government must be remitted to Obat Oil and Petroleum Limited account number 0020560534in Sterling Bank Plc for the purpose of liquidating outstanding loan obligations in line with the terms and conditions of the facility under which the transactions were financed. Also note that apart from financing the importation product, Sterling Bank paid all relevant government charges including the PEF and admin.”

In a response to the text message our correspondent sent to the Chairman of Obat Oil, Oba Frederick Akinrutan, an official of Obat Oil who called himself Otunba said that the allegation of Petrocam is in violation of the court process since the case is already in court.

 He added that the legal counsel of Petrocam had advised the company to have account reconciliation meeting on Januaru 9, 2016.  However, he could not provide the letter.

“We are shocked to hear that the story has been reported to the press since there is opportunity for both parties to iron out area of concern,” he lamented.

When asked by our correspondent whether they truly diverted the N1.9b subsidy claims to their account, Otunba failed to answer the question.