Timipre Sylva, minister of state for petroleum, says the federal government has no immediate plans to remove fuel subsidy.

The minister made this known while fielding questions from legislators at a joint session of national assembly committees overseeing the oil sector.

“This government is not about to remove subsidy because it is difficult. We believe as a government that our people are going through a lot,” he said.

“We cannot as a responsible government heap another issue of petroleum price hike or removal of subsidy on Nigerians.

“It is not on the cards at all, we are just looking at how we can manage it.”

Sylva said the official daily consumption rate of petrol in Nigeria does not reflect the actual consumption rate.

He maintained that government does not believe that Nigerians consume over 60 million litres of fuel daily.

According to Sylva, there is a lot of smuggling and lots of our neighbours are taking advantage of the cheaper price in Nigeria.

He said Nigeria is subsidising for almost half of Africa which was very difficult to manage.

The minister said government was working to close up such leakages and when achieved, the cost of subsidy would be bearable.

He added that fixing the refineries would also help to reduce the cost of subsidy and that government is doing a lot to get the refineries working again.

On the declaration of Anambra as an oil-producing state by ex-President Goodluck Jonathan, the minister said that there were lots of things left undone that would have benefited the state.

On Monday, Zainab Ahmed, minister of finance, said subsidy will gulp N420 billion from 2020 budget.

The Nigerian National Petroleum Corporation (NNPC) has announced the discovery of oil in the north-eastern part of the country.

Samson Makoji, acting group general manager, group public affairs division of the corporation, announced this in a statement on Friday.

He said the discovery of oil and gas in commercial quantity in the Gongola Basin will “attract foreign investment, generate employment for people to earn income and increase government revenues”.

“The Nigerian National Petroleum Corporation (NNPC) has announced the discovery of hydrocarbon deposits in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the North-Eastern part of the country,” the statement read.

“It would be recalled that drilling of the Kolmani River II Well was flagged-off in a colourful ceremony by President Muhammadu Buhari on the 2nd of February, 2019.

“NNPC acquired 435.54km2 of 3D Seismic Data over Kolmani Prospect in the Upper Benue Trough, Gongola Basin. This was to evaluate Shell Nigeria Exploration and Production Company (SNEPCo) Kolmani River 1 Well Discovery of 33 BCF and explore deeper levels.”

Makoji explained that one of the rigs was drilled to a total depth of 13,701feet, which led to the discovery of oil and gas in several levels.

He said on Thursday evening, one of the reservoirs was perforated and “hydrocarbon started flowing to the well head at 21:20hours in which the gas component was flared to prevent air charge around the Rig”.

Makoji said NNPC has deployed world-class cutting-edge technologies to de-risk exploration in the frontier basins, adding that the corporation plans to drill additional wells for full evaluation of the hydrocarbon volume in the Gongola Basin.

He also said attention would be given to the Dahomey and Anambra Basins which have already witnessed oil and gas discoveries.

Timipre Sylva, minister of state for petroleum resources, says the government will hold an oil licensing round in 2020.

Speaking in an interview with Bloomberg on Friday, the minister said Nigeria and other members of the Organisation of Petroleum Exporting Countries (OPEC) are willing to take deeper production cuts to keep oil prices stable.

“The oil licensing round is definitely on the table for next year. Part of it is to raise revenue and also to expand the space in Nigeria. There has been no new bid round since 2007 and we think that it is due for us to have a bid round in Nigeria,” he said adding that the rounds will also be a way to raise revenue.

Speaking on efforts to keep oil prices stable, Sylva said: “It will all depend on how things are going you know things cannot be predicted. We left in September and Saudi Arabia happened then everything changed. But if we need to make deeper cuts in December, we will make cuts.

“Everybody agrees in OPEC that we need to stabilise the market, we cannot allow prices to just plummet so if things are going southwards then we will have to do some more cuts. We are ready to make that sacrifice.”

He, however, said the outlook is not “very good” because of geopolitical tension.

According to the minister, Nigeria’s average daily oil production is 2.1 million barrels per day (crude oil and condensates); 1.8 million barrels per day excluding condensates.

“We had some overproduction in August but we committed to cutting down and we cut down in September. We are going to fully comply from October and moving forward.”

Sylva said there will be a meeting with Gabon and South Sudan to convince them to comply with OPEC production cuts.

Since 2017, OPEC and some non-member countries agreed to cut back daily production to shore up crude oil prices and clear a supply glut in global markets.

A day after Eni announced that the US department of justice has closed investigation into its role in the OPL 245/Malabu deal of 2011, Royal Dutch Shell said it has also been notified on its own probe.

Shell and Eni teamed up to acquire OPL 245 from Malabu Oil and Gas Ltd in 2011 but the deal has become a subject of criminal proceedings in Milan, Italy, following allegations of sleaze.

Shell and Eni are currently on trial but they have denied any wrongding.

“The U.S. Department of Justice (DoJ) has notified us that it has closed its inquiry into Shell in relation to OPL 245. We understand that this is based on the facts available to the DoJ, including ongoing legal proceedings in Europe,” Shell said in a statement.

In 2011, the federal government brokered a deal between Malabu Oil and Gas Ltd, the original allotees of the enormously endowed but controversial OPL 245, and Shell/Eni who wanted to buy the oil block from the Nigerian company.

While Shell and Eni paid a signature bonus of $210 million to the federal government, they paid $1.1 billion to buy 100 percent interest in the oil block from Malabu.

However, the entire $1.3 billion was transferred to the account of the federal government in London, UK, from where Malabu was paid its $1.1 billion.

Subsequently, it was alleged that bribes were paid to politicians, businessmen and middlemen to facilitate the deal, considered by activists as unfavourable to Nigeria.

The US justice department has ended investigation of Eni, Italian oil giant, over its joint acquisition of OPL 245 with Shell in 2011.

But after Eni issued a press statement on Tuesday in which it said this is yet another confirmation that it did not engage in any illegality, the department said it was “misleading” because investigation could be re-opened if circumstances changed.

Eni later issued a clarification, saying there was a translation error in its original statement and promised to cooperate with the US authorities if the case is re-opened.

“If the DoJ would decide to reopen its investigation based on events new and unknown, then Eni will cooperate again with the Department to further demonstrate that Eni and its management are not involved in any illegal conduct,” an Eni spokesman said.

In 2011, the federal government brokered a deal between Malabu Oil and Gas Ltd, the original allotees of the enormously endowed but controversial OPL 245, and Shell/Eni who wanted to buy the oil block from the Nigerian company.

While Shell and Eni paid a signature bonus of $210 million to the federal government, they paid $1.1 billion to buy 100 percent interest in the oil block from Malabu.

However, the entire $1.3 billion was transferred to the account of the federal government in London, UK, from where Malabu was paid its $1.1 billion.

Subsequently, it was alleged that bribes were paid to politicians, businessmen and middlemen to facilitate the deal, considered by activists as unfavourable to Nigeria.

Eni and Shell have denied any wrongdoing.

The Rivers state government says it has acquired the 45% stake in oil mining license (OML) 11 situated in Eleme local government area, Ogoni and in other communities in the state.

Nyesom Wike, governor of the state, announced this in a broadcast aired in the state on Monday.

Wike explained that the acquisition was made on court judgements in cases filed before courts in Nigeria and the United Kingdom for enforcement.

“I am delighted to inform you that the Rivers State Government has fully acquired Shell Petroleum Development Company of Nigeria (SPDC) 45% interest in Oil Mining Lease (OML) 11 situated in Ejama-Ebubu community in Eleme Local Government Area and the adjoining Ogoni and other communities of Rivers State,” the governor said.

“This fresh case commenced in 2001 passed through four different justices of that Court arising from twists and turns associated with opposed litigations, until it was disposed of about 10 years after in June 2010 by Buba J. (the fifth judge to preside over the matter).”

The oil license has been under contention with President Muhammadu Buhari directing the Nigerian National Petroleum Corporation (NNPC) to take over ownership of OML 11.

The government said the decision not to renew Shell’s operating license is in the interest of the nation’s security.

The Nigerian National Petroleum Corporation (NNPC) says it will begin full rehabilitation of the nations three refineries by January 2020.

The nation’s refineries are located in Port Harcourt, Warri and Kaduna.

Mele Kyari, NNPC’s group managing director, made this known on Saturday during a facility tour to the Port Harcourt refinery.

In a statement by Ndu Ughamadu, the spokesman for the corporation, the rehabilitation would ensure that crude refining would hit optimum capacity by 2022.

According to him, making the refineries operate at optimal capacities is a mandate that the NNPC will leave no stone unturned to actualise.

“We will stick to time, we will deliver this project by 2022. We will commence actual rehabilitation work in January,” he said.

“We will do everything possible between October and December to close out all necessary conditions for us to deliver on that project.

“I believe that with the support that we have from the shareholders – the government of this country, the entire staff of this company and the contractors, I believe it is doable and we will deliver the project.

“It’s no longer about business now, but a reputational issue. For the original builders of the refinery, Tecmmont, Eni/NAOC and NNPC, let us be conscious of the fact that our reputation is at stake as far as this project is concerned.

“The NNPC leadership has promised this country that our refineries will work, therefore, we must work not to disappoint over 200million Nigerian stakeholders.”

He also challenged the Port Harcourt refinery management to ensure that the nation’s indigenous engineers and other professionals working in the refinery were fully engaged to participate actively during the rehabilitation and own the process.

According to him, the involvement of the indigenous workers will build capacity, save cost and introduce an era of steady and uninterrupted production curve that will grow the oil and gas industry.

Workers in the country’s oil sector have rejected moves by the federal government to incorporate them in the Integrated Personnel and Payroll Information System (lPPIS).

The workers made their position known on Tuesday in a letter addressed to Chris Ngige, the minister of labour and employment.

The letter was jointly signed by Lumumba Okugbawa, general secretary of the Petroleum and Natural Gas Senior Staff Association (PENGASSAN), and Olawale Afolabi, general secretary of the Nigeria Union of Petroleum and Natural Gas (NUPENG).

NAN reports that a circular from the office of the accountant-general of the federation dated September 7, 2018, had directed the enrollment of oil and gas workers on lPPIS.

This resulted in series of meetings to proffer ways to address the matter, at the end of the meetings; a technical committee was set up by the ministry of labour and employment to assess the unions’ concerns.

“It is pertinent to state that this Committee is yet to meet as we write, unfortunately, we have been inundated again by the threat from the Office of the OAGF, via a Circular with reference
number OAGF/IPPIS/93/1187, dated 29th August 2019 to stop the salaries of our members, come October 2019,” the letter read.

According to the statement, the government integrated financial management information system (GIFMIS) platform already offers a similar purpose and there is also the presidential initiative on continuous audit (PICA) whose responsibility it is to audit the nominal and payroll of agencies.

The unions directed its members in affected regulatory agencies not to provide any information concerning personnel payment and allowances to the accountant-general’s office for the purpose of lPPIS until the technical committee meets.

They also warned that they would withdraw their services if their salaries are stopped without clarification of the issues raised.

The price of Brent crude gained $12 in early trading on Monday to hit $71.95 per barrel after an attack on oil facilities in Saudi Arabia.

Yemen’s Houthi rebels had claimed responsibility for attacks on Saudi Aramco oil facilities in Abqaiq where the world’s biggest crude-processing facility is located and the kingdom’s second-biggest oil field in Khurais saying 10 drones were deployed for the attack.

The attack cut five percent of global oil supply and it is estimated that Saudi lost 5.7 million barrels of its 9.8 million barrels daily production according to the August data provided by the Organisation of Petroleum Exporting Countries (OPEC).

Brent crude futures, the international benchmark of crude oil, recorded its biggest gain since it was launched in seconds when trading opened on Monday.

The price of West Texas Intermediate crude, which is traded by the United States of America, was also higher by 9.5%, hitting $60.06 per barrel.

In a series of tweets on Sunday night, Donald Trump, president of the US, said he has ordered the release of the country’s oil reserves to keep the markets well-supplied.

Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount….

— Donald J. Trump (@realDonaldTrump) September 15, 2019

….sufficient to keep the markets well-supplied. I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.

— Donald J. Trump (@realDonaldTrump) September 15, 2019

According to the International Energy Agency (IEA), the loss suffered is higher than that suffered by Iran during the Islamic Revolution in 1979.

It is also higher than the August 1990 drop in Kuwaiti and Iraqi oil output when Saddam Hussein invaded the Middle East country.

Major refineries in the West Coast of the United States of America, including California, have chosen Nigerian crude as their preferred raw material.

This is despite the shale boom that saw the United States become a competitor with oil-exporting countries from its previous status as a buyer.

Since the beginning of 2019, Californian refiners have been loading cargoes of Forcados, Qua Iboe, Bonga, Erha and other crude grades.

This, Reuters reports, is due to the absence of pipelines for the shale hub in Texas and New Mexico.

An estimated six million barrels have been imported from Nigeria between April and August; four times higher than the quantity purchased all of 2018.

Marathon Oil’s refinery at Long Beach is reported to be the most consistent buyer.

“It makes more cost sense. Even if U.S. crude is closer on the map when you factor in the price and availability of taking in barrels from Louisiana or Nigeria, Nigeria came out cheaper,” a seller was quoted to have said.

The boom is fuelled by shale production and the lifting of a 40-year law that stipulated that only US-flagged vessels can transport US crude.

However, traders warn that the export window could close soon because of the timescales and distance involved.

“The honeymoon will be over in a year from now,” said Ehsan Ul-Haq, lead analyst with Refinitiv.

“At present, all refiners are desperate to produce marine gas oil or very low-sulphur fuel oil. Once the market reaches equilibrium … there will be less interest.”

The journey of shipping crude from Nigeria is said to be 20,000 kilometres and is estimated to take 40 days.