10082021

20 — Vanguard, TUESDAY, AUGUST 10, 2021
Bonny Light slides further to $69.77 7 per barrel on Delta variant, others
By Udeme Akpan
THE price of Bonny Light,
Nigeria's premium crude
oil grade, weekend, dropped to
$69.77 per barrel from $72
recorded the previous day, over
fears of increasing United States
stock and the spread of Delta
variant.
The price of Bonny Light and
other crudes, had risen to over
$75 per barrel in July 2021, due
mainly to improved vaccination
during the period.
But the current slide would not
affect the execution of Nigeria's
2021 budget, which was
benchmarked on $57 per barrel
and 1.8 million barrels per day,
(excluding Condensate), as the
nation also produces between
300,000 - 400,000 of Condensate
daily.
The drop in price was mainly
driven by the resurgence of the
Coronavirus pandemic in some
oil consuming nations, including
China and India, expected to
impact negatively on demand,
and by extension price.
It was also influenced by the
report of the U.S. Energy
Information Administration
(EIA), which has it that crude
stockpiles rose by an unexpected
3.6 million barrels last week,
while gasoline inventories fell by
a bigger-than-forecast 5.3
million barrels.
Nevertheless, in its July Oil
Market Report, the Organisation
of Petroleum Exporting
Countries, OPEC, had stated:
"The global economic growth
forecast for 2021 remains
unchanged at 5.5 per cent. In an
initial assessment, global
economic growth for 2022 is
forecast at 4.1 per cent. However,
future global growth continues
to be impacted by uncertainties,
including the spread of COVID-
19 variants and the pace of the
global vaccine rollout.
"In addition, sovereign debt
levels in many regions, together
with inflationary pressures and
central bank responses, remain
key factors that require close
monitoring. Nevertheless,
upside potential could
materialize as ongoing
containment COVID-19
measures in combination with
additional fiscal and monetary
stimulus could turn out to be
more effective than envisaged,
leading to further gains in
consumption and investments."
TUESDAY, AUGUST 10, 2021
Nigeria’s gas flare falls 0.33% in Q1 2021 to
45.33BCF • • 1,720GW power equivalent lost in 2 years
By Obas Esiedesa
AS flare in Nigeria’s oil
Gfields fell by 0.33 percent in
the first quarter of 2021 to 45.33
billion cubic feet, BCF, compared
to 45.48BCF of gas flared in the
fourth quarter of last year, latest
data from the industry have
shown.
Data also showed that on a yearon-year
basis, gas flare dropped
by 21.75 percent in the first quarter
of 2021 from the 57.93BCF
recorded in the first quarter of
2020.
According to the Nigerian
National Petroleum Corporation,
NNPC, monthly report for
February, 2021, data also showed
that in 24 months, from March
2019 to February 2021, a total of
430.97BCF of gas have been
flared.
This is equivalent to 1,720 Giga
Watts of power lost in two years,
according to power generation
expert, Dr. Stephen Ogaji of the
Niger Delta Power Holding
Company Limited.
Gas commercialization
programme
As part of the effort to curb gas
flaring in the country, the Federal
Government in December, 2016,
launched the Nigerian Gas Flare
Commercialisation programme.
The NGFCP was designed as
the strategy to implement the
policy objectives of the
government for the elimination of
gas flares with potentially
enormous multiplier and
development outcomes for
Nigeria. The objective of the
NGFCP is to eliminate gas flaring
through technically and
commercially sustainable gas
utilization projects developed by
competent third-party investors
who will be invited to participate
in a competitive and transparent
bid process for flare sites.
The Department of Petroleum
Resources, DPR, which manages
the programme, in a statement
explained that the
commercialisation approach has
been considered from legal,
technical, economic, commercial
and developmental standpoints.
“It is a unique and historic
opportunity to attract major
investment in economically viable
gas flare capture projects whilst
permanently addressing a 60 year
environmental problem in Nigeria.
“The NGFCP has offered flare
gas for sale through a transparent
and competitive bidding process.
A structure has been devised to
provide project bankability for the
Flare Gas Buyers, which is
essential to the success of the
Programme”.
Latest data from the programme,
according to the Department of
Petroleum Resources, DPR,
showed that so far 203 companies
have been awarded the right to
process flared gas from the 178
gas flared sites.
Speaking on the programme at
the weekend, the Permanent
Secretary, Ministry of Petroleum
Resources, Mr. Bitrus Nabasu
noted that despite the slow pace
of progress, the Federal
Government was determined to
end gas flares in the country.
“The process is still on and our
intention is to reduce gas flaring
as much as possible so that the
environment will be safe for us.
The process is on and very soon it
will be concluded”, he explained.
Gas flare penalty
DPR in its gas flare regulation
stated that “flare payments shall
apply to any natural gas that is
flared and/or vented at the
production facilities of the
producers”.
Figures from the 2019 Oil and
Gas Audit Report of the Nigeria
Extractive Industries Transparency
Initiative, NEITI, showed that
companies paid $307,591 in 2019
as gas flare penalties in the
country.
Experts react
In an interview with Energy
Vanguard, GNPC Petroleum
Commerce Chair in Oil and Gas
Studies, University of Cape Coast,
Ghana, Prof. Wumi Iledare said a
lot of investment was needed to
end gas flaring in the country.
Prof. Iledare however observed
that gas flaring has gradually gone
down in the past few years,
accounting for less than 10 percent
By Ediri Ejoh
THE Chief Operating
Officer, Asharami Energy,
Henry Menkiti, has urged operators
in the upstream sector to develop
Nigeria-specific prorammes
to address the challenge of emissions
in the march towards energy
transition.
Speaking at the Society of Petroleum
Engineers (SPE) International
Conference and Exhibition,
held in Lagos, Menkiti said the
nation has to establish a progressive
strategy that guides the mining
of hydrocarbons more responsibly.
“We must keep doing what we
try to do best; produce hydrocarbons
as we transition, and at the
same time, be aware of the dan-
of total gas production.
He explained that “there are
some gas flaring that cannot be
eliminated if you have to keep
things running but we must give
credit to the Department of
Petroleum Resources with respect
to gas flaring. It is below 10
percent right now. I still
understand that is still the
equivalent of about
3,000megawatts of electricity
generation”.
He noted that “the investment
required to be able to get gas to
OIL MARKET WATCH
Bonny Light $69.77
Brent $69.07
OPEC Basket $71.83
WTI $66.76
MARS $66.28
(As ofAugust 9, 2021)
end-users is massive and it is
going, to begin with, a good
perception of public policy.
Unfortunately, the perception of
the Public Policy Index, PPI, is still
very low. And until governance of
the oil and gas industry is properly
defined and all these amorphous
regulatory agencies well defined,
a risk-averse person will not invest
in this type of business
environment.
“This gas flaring that people are
talking about, the opportunity cost
to taking the gas to end-users is
massive and there must be
guarantee return on investment.
If it is not there nobody will invest”,
he added.
Speaking on the gas flare
situation, the President of the
Nigerian Association of Energy
Economics, NAEE, Prof Yinka
Omorogbe noted that the Federal
Government must demonstrate
the political will to end gas flaring
in the country by first ending the
use of gas flare penalty as a source
of revenue.
Prof. Omorogbe stated that the
penalty must be seen as a punitive
measure and strong enough to
deter companies from flaring gas.
According to her, “We have to
have the political will to not flare
gas even if it means shutting down
certain fields that are producing
right now. Secondly, you have to
seriously pursue your gas
utilization projects and ensure that
the gas utilization projects are
using up associated gas that would
otherwise be flared.
Asharami seeks emission-cutting programme in Nigeria's
upstream operations gers directly related to emissions,”
he said.
Menkiti said as the upstream division
of energy conglomerate,
Sahara Group, Asharami Energy
is committed to aligning its operations
to process and promote environmental
sustainability.
“Ultimately, addressing emission
cutting requires the collective
effort of all stakeholders in the upstream
sector and we believe the
SPE can play a critical role in driving
the conversation. Sahara is
happy to play a leading role in
this regard,” he added.
Urging the SPE to “evangelize
local technical breakthroughs” in
the sector, Menkiti said this would
help fast-track knowledge sharing,
capacity building and efficient operations.
According to him, the sector
needs to highlight the positive engagements
between the Community,
Government, Operator and
Service companies to enhance the
sustainability of the ecosystem.
He noted that internal and foreign
investors read and benchmark
the health of the ecosystem
against their risk portfolios when
making critical decisions.
“Sahara’s positive multi-stakeholder
approach represents an example
– a role model where collaboration
works; enhancing value
across-the-board for all stakeholders.
Where this is not at play,
it runs the risk of stagnating operations,
having lifting costs running
sky-high and making such
ventures difficult to sustain,” he
asserted.