If We Devalue Naira Again, We Will Kill Nigerians – CBN Governor

The Central Bank governor, Mr Godwin Emefiele, has defended his decision not to further devalue the naira despite the pressure on the currency of Africa’s top oil producer amid the global price crash. Godwin Emefiele is also under pressure from foreign investors and Nigerian manufacturers, who say his policies are worsening the oil-dependent country’s economic woes. But the governor, on Monday, maintained that the naira was ‘appropriately priced,’ telling the Financial Times Africa Summit he would not allow a policy of ‘interminable adjustment’ as this would only cause more pain for Nigeria’s 170 million people. The naira lost more than 20 per cent of its value between the start of the oil price fall in July 2014 and February, the last time the Central Bank allowed the currency to depreciate. Since then, Emefiele has introduced a range of currency controls — doing everything but adjusting the currency to defend its value. The result has been an effective freezing of the country’s foreign exchange market. The lack of liquidity — the ability to move hard currency in and out of the country — was one reason JP Morgan removed Nigeria from its influential emerging markets bond index last month. President Muhammadu Buhari, who was inaugurated in May, has not yet appointed a cabinet or defined an economic policy to guide the country through the crisis sparked by the oil price crash. This has frustrated investors who strongly disagree with the monetary policies enacted by Emefiele and argue that in the absence of a fiscal policy, the central bank governor is straying beyond his mandate and intervening in manufacturing policy.

Why We Cannot Sell Fuel At N87 Per Litre - Ondo, Ekiti Dealers

Despite the sealing of some filling stations in Ondo and Ekiti States by the Department of petroleum Resources (DPR), the Petroleum Dealers and Owners Association in the states on Monday said it would not be able to sell fuel at the pump price of N87 per litre due to non-availability of the product.

Chairman of the association, Mr Jimi Oladapo, said at a news conference in Akure that petrol was not available at the NNPC depots, adding that members had been sourcing it through other means at exorbitant cost.

According to Oladapo, rather than forcing them to sell at unrealistic price, the Federal Government should deregulate the downstream oil sector to enable them to sell at appropriate prices
"Specifically, total cost per litre of fuel from Lagos ranges between N104 and N108 while the landing cost per litre from Oghara/Warri in Delta State is between N105 and N108 per litre.

"The landing cost is exclusive of operating expenses such as diesel to run the station, staff salaries and wages, strategies, office and pump maintenance.

"From the analysis, you will agree with us that it will be impossible for us to sell at the government approved price of N87 per litre," he said.

Adedapo also noted that even when NNPC gives out fuel, the cost to them at their stations are above N89 per litre.

"One wonders how a businessman with responsibilities can sell below cost price. The ordinary law of supply and demand will not allow it," he stressed.

"Rather than running our stations at a loss, since most of us are on loan from financial institutions, we have resolved not to procure the products until it is readily available at NNPC depots", he said.

NNPC To Ease Scarcity With 1.1bn Litres Of Petrol

The Nigerian National Petroleum Corporation (NNPC) said on Thursday that it had 1.1 billion litres of petrol in stock to ease the current fuel scarcity nationwide.

"As yesterday , Thursday, June 11, 2015, PPMC/PPMC has Premium Motor Spirit (PMS) stock level of 1.1 billion litres, representing 27 days sufficiency," said Joseph Dawha, the NNPC Group Managing Director, in Abuja, while briefing newsmen on the petrol supply situation.

"This stock is excluding volumes with firmed delivery Laycans (dates) within the next couple of days.

"With this level of stock, we have intensified our vessels and trucking operations to ensure that PMS is available at our inland depots and retail outlets nationwide," he said.

According to him, NNPC, through its subsidiary, NNPC Retail Ltd., has embarked on massive PMS lifting to its mega and affiliate stations in Abuja and across the nation.

"In the last five days, we have brought into Abuja 428 trucks of PMS, averaging 85 trucks daily to address the PMS requirement in Abuja and its immediate environs," he said.

Dawha said that NNPC/PPMC was committed to ending the fuel queues in Abuja and across the states by the weekend in collaboration with the major marketers and other stakeholders.

"Evidence has begun to emerge in the last two days as most of our stations are wet and the severity of the queues has started to reduce," the NNPC chief said.

"We have taken steps, as supplier of last resort, to improve availability of PMS in the country and ensure its effective distribution nationwide.

"The supply and distribution efforts must be sustained with the support and cooperation of our stakeholders in the downstream and government agencies, such as police, army, Nigeria Security and Civil Defence Corp (NSCDC).

"We are optimistic that we can put this ugly experience behind us," he said.

Lagos Set To Join Oil Producing States As Production Begins This Year

With the award of a rig contract to carry out the drilling and completion programme for the Aje shallow-water field offshore Lagos, the first oil production is expected to begin in the state by December this year.

The operator of the Oil Mining Lease 113 has, on behalf of the joint venture partners, entered into a rig contract with Saipem for the Scarabeo 3 drilling rig to carry out the drilling and completion programme for the Aje Field Cenomanian oil development, Panoro Energy said in a statement on Monday.

The joint venture partners led by Yinka Folawiyo Petroleum Company Limited (the operator) had in October last year taken the final investment decision to develop the first phase of the Aje field.

According to the statement, the Scarabeo 3 rig is a semi-submersible rig currently stationed offshore Lagos. The rig will be moved 18 nautical miles to the Aje drilling location and will be used to carry out well operations for the first phase of the Aje Cenomanian Oil field development that includes two subsea production wells.

It said the well operations would comprise the completion of the existing Aje-4 well as a production well, and the drilling and completion of a new well, Aje-5, which would be drilled to the Aje-2 subsurface location.

The Aje-2 well is said to have demonstrated high reservoir productivity in a Cenomanian production test conducted in 1997, flowing approximately 3,700 barrels of oil per day of 41˚API oil under suboptimal well conditions.

Well operations are expected to commence in early third quarter of 2015 and are likely to take approximately 90 days to complete, according to the statement.

It stated that once well operations had been completed, subsea equipment would be installed and the wells would be tied back to the Front Puffin floating, production, storage and offloading vessel, currently undergoing refurbishment in Singapore.

The Chief Executive Officer, Panoro Energy, Mr. John Hamilton, was quoted in the statement as saying, "Panoro is very pleased to be entering into the rig contract for the drilling and completion of the Aje development wells. We have been able to achieve a lower rig rate than was expected when the Final Investment Decision was made in October 2014.

"With well operations expected to commence in the next few weeks, we will continue moving towards our incremental growth strategy of converting Panoro's discovered resource base into commercial production and generating positive cash flow in 2016."

Aje is an offshore field located in the western part of Nigeria in the Dahomey Basin at the border with Benin Republic, with the first oil targeted for December 2015, the statement said.

The field is situated in water depths ranging from 100 to 1,000 metres about 24 kilometres from the coast. The field contains hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir.

Yinka Folawiyo Petroleum Company is the operator, with 25 per cent interest in the field. The partners are Vitol, First Hydrocarbons Nigeria Limited, Energy Equity Resources Limited, Panoro Energy ASA and Jacka Resources Limited.

The JV partners had in January 2014 submitted the Field Development Plan for the Aje field to the Department of Petroleum Resources. The FDP was approved in March and is primarily focused on the development of the Cenomanian oil reservoir.