Friday, March 11, 2016

PETAN, LADOL Collaborate Against Falling Crude Oil Prices
By Roseline Okere
Nigerian Guardian
11 March 2016  3:42 am

Petroleum Technology Association of Nigeria (PETAN) and the Lagos Deep Offshore Logistics Base (LADOL) have expressed confidence that the declining crude oil prices pose great opportunities for patronage of indigenous companies.

The oil price has now fallen by more than half since June of 2014 when it was $110 per barrel, hovering between $27 and $40 a barrel in the last three weeks.

They believed that the current unpleasant situation in the oil market would assist in promoting local content policy in the country.

To this end, the LADOL and PETAN decided to collaborate in the area of human capacity development for Nigeria’s oil and gas sector.

Speaking during a facility tour of LADOL’s free zone in Apapa, the Chairman of PETAN, Emeka Eneh, who led other top officials of the association, said for the Nigerian economy to take the expected sixth position in the world by 2050, businesses in the country have to talk to businesses for the creation of real value.

Eneh said for the country to grow value-added local content, all the players in the different sectors of the Nigerian economy needed to connect and align forces in such a way that they could create value-added opportunities for growing and industrialising the country’s economy.

“Nigeria’s economy in 2050 will be the sixth largest economy in the world, ahead of South Korea; ahead of Canada and ahead of Italy. For that to happen in a country like Nigeria, it has to happen by connecting the dots of the economic engine in a way that creates real value. There is no other way; you can’t legislate it; you can’t imagine it; you can’t politically create it; it has to be done by business talking to business,” Eneh said.

Eneh noted that Nigeria has demonstrated that her private sector is probably one of the most vibrant private sectors anywhere in the world, adding that if the country’s private sector is allowed to run their thing, Nigeria’s economy would move forward.

“So, if we are going to grow value-added local content, all the players in different sectors need to connect and I think this is primarily the driving force. We should align force in such a way that as an industry, we can create value-added opportunities for growing and industrializing our economy,” Eneh added.

The Managing Director of LADOL, Amy Jadesimi said it is key for LADOL to collaborate with PETAN, adding that human capital is also key for the survival of the industry.

She said over 500 Nigerians were working at the company’s project, adding that the number could double by the middle of this year.

Also, LADOL’s Executive Director in charge of Business Development, Jide Jadesimi noted that a key factor in the collaboration between LADOL and PETAN is the abundant young population in Nigeria.

“In that same time in the next 20 years, we will be number eight in the world in terms of the young population under 25. So, to my mind, we have no choice. Now is the critical time in our development, when we can invest in the training and skill development of young people, so that when that time comes, we will actually be uplifted in terms of the world ranking and so on and so forth,” he explained.

Hope rises for oil prices as U.S. shale production declines further

By Roseline Okere  
11 March 2016  |12:17 am

The rising crude oil prices may be sustained till next year, as U.S. crude oil production has continued to decline and expected to drop from the current level of 9.4 million per day it recorded by December 2015 to 8.7 million per day in 2016.

The U. S Energy Information Administration (EIA), which made this disclosure on Wednesday, in a media statement, projected a further slid to 8.2 million barrels per day next year.

Specifically, EIA disclosed that production declined by 80,000 per day in February, which has positively impacted on crude oil prices.

EIA said the oil production reached its lowest level since November 2014. Production also declined from year-ago levels for the first time in more than four years.

It noted this continued production decline was the result of lower crude prices, which have declined more than 70 per cent since the summer of 2014.

Crude oil production in December 2015 averaged 9.3 million barrels per day (bpd), down 166,000 bpd from December 2014 and the first year-over-year decline in U.S. monthly oil output since September 2011, Domestic oil production has generally declined month to month since reaching a 44-year peak of almost 9.7 million bpd in April 2015.

“Even as production declined, output was still above levels from the same month a year earlier”, it added.

It disclosed that most of the decline in oil production has occurred in states where a large portion of output comes from tight oil formations, including North Dakota, Texas, and New Mexico.

The statement noted that oil production from tight formations accounted for most of the increase in U.S. oil production during the past five years, and it is now making up most of the decline in output.

The EIA stated that natural gas working inventories were 2,536 billion cubic feet (Bcf) during the month under review, representing a 46 per cent = higher than during the same week last year and 36 per cent higher than the previous five-year average for that week.

EIA forecasts that inventories will end the winter heating season (March 31) at 2,288 Bcf, which would be 54 per cent above the level at the same time last year. Henry Hub spot prices are forecast to average $2.25 per million British thermal units (MMBtu) in 2016 and $3.02 per MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.

Natural gas is expected to fuel the largest share of electricity generation in 2016 at 33 per cent, compared with 32 per cent for coal.

This, it said, would be the first time that natural gas provides more electricity generation than coal on an annual average basis.

“In 2017, natural gas and coal are both forecast to fuel 32 per cent of electricity generation. For renewables, the forecast share of total electricity generation supplied by hydropower rises from six per cent in 2016 to seven per cent in 2017, and the forecast share for other renewables increases from eight per cent in 2016 to nine per cent in 2017”.

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