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Energy

7 dead in explosion at NNPC facility

7 people were killed in the explosion which occurred during the discharging of Gbetiokun production.

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NNPC, Domestic Crude Allocation, Why NNPC’s Duke Oil is quitting London operations for Dubai , NNPC divests stake in four oil wells to NPDC , How NNPC discovered oil, gas deposits in the North , Nigeria to leverage on condensate refineries to be petrol net exporter, How NNPC saved $3 billion from arbitration , NNPC, IPPG donate medical supplies to South West state governments, NNPC discloses bases for employment and managerial progression in the oil firm, NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

The Nigerian National Petroleum Corporation (NNPC) has reported a major explosion in one of its upstream facilities on Tuesday July 7, 2020. The explosion incident occurred at Gbetiokun, OML 40, which is operated by the Nigerian Petroleum Development Company (NPDC), on behalf of the NPDC/Elcrest Joint Venture.  

The incident was confirmed in a press statement by the Group General Manager Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Wednesday, July 8, 2020. 

He revealed that 7 people were killed in the explosion which occurred during the discharging of Gbetiokun production. 

READ ALSO: Accountant-General’s office fire: FG reacts to claims of missing N700 billion

In the statement, Obateru said, ‘’The incident, which occurred on Tuesday during the installation of a ladder on a platform (Benin River Valve Station) for access during discharging of Gbetiokun production, unfortunately caused 7 fatalities.’’ 

The release also stated that detailed investigation of the cause of the explosion has started, while the Department of Petroleum Resources has been duly notified and Form 41 was being prepared for the Industry regulator as required in circumstances of this nature.  

The bodies of casualties have been deposited in a morgue in Sapele, while families of the personnel involved are being contacted by their employers: Weld Affairs and Flow Impact, which are consultants to NPDC. 

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The release stated that all personnel onboard the platform had been fully accounted for.  

Meanwhile, the Group Managing Director of NNPCMallam Mele Kyari, in the statement commiserated with the families of the bereaved, praying that God grants them the fortitude to bear the irreparable loss of their loved ones.  

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected].

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Energy

BUA Group awards contract for polypropylene plant in its refinery project

The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

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BUA Group chairman, Abdulsamad Rabiu, African Continental Free Trade Agreement, AfCFTA, CCNN

Nigeria’s leading indigenous conglomerate, BUA Group has announced that it has signed a contract agreement with Lummus Technology for the establishment of a polypropylene plant in its refinery and petrochemical project.

The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

The Chairman of BUA Group, Abdul Samad Rabiu, while disclosing the contract agreement, expressed confidence in the capacity and technical expertise of Lummus Technology to deliver a best-in-class project.

READ: BUA says its export-focused sugar project will create jobs and checkmate price hike

What the Chairman of BUA Group is saying

Rabiu in his statement said, “We are pleased to sign this polypropylene contract for our BUA refinery and petrochemicals project with Lummus Technology, a world leader in delivering polypropylene solutions, which will solve the increasing demand for high-performance grade polypropylene in Nigeria, the Gulf of Guinea as well as the Sub-Saharan Africa Region.

“We are confident in the capacity and technical expertise of Lummus Technology to deliver a best-in-class, 285,000 tpy polypropylene unit for our refinery project scheduled to come on stream in 2024.’’

READ: Dangote, BUA reconcile over sugar plant dispute after meeting with Ganduje, others

What the President/Chief Executive Officer of Lummus Technology is saying

On his part, the President/Chief Executive Officer of Lummus Technology, Leon de Bruyn, said that he was looking forward to working with BUA refinery on the project.

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Leon said, “We look forward to working with BUA Refinery on this critical project and supporting the first Novolen polypropylene unit in Nigeria. Our world-class Novolen technology is well suited to meet Nigeria’s increasing demand for the growing petrochemical products market.

It offers a flexible range of industry-leading products for all PP applications, and the industry’s lowest overall capital and operational costs while providing customers with high process reliability and flexibility in responding to market needs.”

READ: BUA Group, French company announce progress in 200,000 bpd refinery project

What you should know

Lummus Novolen Technology GmbH licenses polypropylene technology and provides related engineering and technical support/advisory services. Novolen also supplies NHP® catalysts for the production of high-performance polypropylene grades in the Novolen process, and NOVOCENE® metallocene catalyst for the production of special polypropylene grades.

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Currencies

How rise in oil prices will impact exchange rate

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

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Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

READ: Nigeria records highest trade deficit since 1981

Why oil price is rising

The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

  • Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
  • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

What it means for the exchange rate

Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

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  • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
  • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
  • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.

Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.

However, the inclusivity of this growth may still be in question.

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