Oil and Gas News

Crude oil for August 2009 delivery up 1.2%, to $60.26 a barrel ;London Brent up 1.2%, to $61.60 ; oil and natural gas from Ghana’s

Afren Plc, First City Monument Bank Plc (FCMB) and Guaranty Trust Bank Plc (GTBank) have established First Hydrocarbon Nigeria Company Limited (FHN), which is an… oil and gas company, as part of the efforts to boost indigenous participation in the nation’s oil and gas industry.

According to the promoters, FHN would be used as a vehicle to acquire substantial oil and gas assets in Nigeria, including stakes in assets currently under negotiation and assets that might become available, which are currently held by international independents and by the joint ventures between the Federal Government and foreign oil firms.

Besides acquiring the assets that might be divested in connection with indigenous licensing rounds, FHN would also investigate opportunities to acquire the assets of other Nigerian indigenous companies, as appropriate.

An official of Afren said that the company hoped that over time FHN would be owned by a wider Nigerian stakeholder base, ensuring diversity of ownership and a reflection of Nigeria’s national character.

According to him, the company also planned to see that FHN was listed on the Nigerian Stock Exchange in due time, subject to market conditions, stressing that FHN had been established to capitalise on the Afren’s existing platform and to actualise the company’s vision of achieving broader African ownership in the upstream sector.

The initial board of directors, he said, would comprise of Egbert Imomoh, (Chairman, Afren), Alhaji Magaji Muhammad Inuwa, Chief (Dr) Oladele Fajemirokun, Dr Jonathan Long (Chairman of FCMB), Constantine Ogunbiyi (Director, Afren), Ethelbert J.L. Cooper (Co-Founder of Afren), a nominee from GTBank’s board and Osman Shahenshah (Chief Executive, Afren).

Long, Chairman of FCMB, commented: “We welcome and support this initiative to create an indigenous Nigerian E&P champion. Afren has worked extensively with Nigerian communities, partners and contractors since inception, and we look forward to helping to encourage a wider Nigerian ownership of prized Nigerian oil and gas assets.”

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TOR to deal with only 33 OMCs

Accra, July 13, GNA – The Tema Oil Refinery (TOR) will soon deal with only members of the Association of Oil Marketing Companies (AOMC) for the distribution of petroleum products as part of efforts to inject discipline into the sector.
The measure forms part of a major policy statement on the oil industry to be announced by the National Petroleum Authority (NPA) and TOR to regulate operators in the industry, an oil industry source told the Ghana News Agency in Accra on Monday.
According to the source, there are over 56 registered Oil Marketing Companies but only 33 are members of the Association of Oil Marketing Companies.
TOR, in the midst of the recent fuel shortage that hit the country, said it had stopped supplying fuel to 10 out of 56 oil marketing companies for failure to adhere to financial terms with the refinery.
The 33 companies to benefit from the new policy are: Total Petroleum Ghana Limited, Ghana Oil Company Limited, Shell Ghana Limited, Agapet Oil Company Limited, Allied Oil Company Limited, Dukes Petroleum Company Limited, Galaxy Oil, Merchant Oil, Star Oil, Universal Oil, and Virgin Petroleum Ghana.
Others are: Unity Oil, Sky Petroleum Limited, Havilah Oil, AP Oil and Gas Company, Anasset Gas Company, Capstone Oil Company, Champion Oil, Top Oil, Strategic Energies, Superior Oil, So Energy Ghana, Sonnidom Energy Limited, and Obiba J. K. Company.
The rest are: Oando Ghana, Nasona Oil Ghana, Manbah Gas Company, Kaysens Gas Company, Glory Oil Company, Frimps Oil Company, Fraga Oil Company, Excel Oil Company, and Engen Ghana Limited.
In an interview with the Ghana News Agency, Mr Kwaku Agyemang-Duah, Industry Co-ordinator of Association of Oil Marketing Companies of Ghana, described the measure as a better way to strengthen the marketing business.
He said whilst not all marketing companies are members of the AOMC for varying reasons, the association still represented the largest national governing body of the network marketing industry and therefore it was able to provide the most accurate (although modest) reflection of national growth and sales figures for the industry.
Mr Agyemang-Duah said although it was not a requirement for all network marketing companies to become members of the Association, members stood to benefit from cooperate recognition.
He called on oil marketing companies who are yet to register with the association to come on board, for “in unity lies strength”.

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With more than 600 million barrels of proven reserves, the International Monetary Fund says oil and natural gas from Ghana’s first off-shore field could bring the country as much as $20 billion by 2030. But Ghana need look no farther than Nigeria to see how squandered oil wealth can bring violence that destroys pipelines, takes hostages, and consumes the central government. “Let me say loud and clear that the oil and natural gas in this country is for the benefit of the people of Ghana,” said Ghanaian President John Atta Mills. In an interview Mills says his government is mindful of Nigeria’s example. “You want to learn from the experiences of others. You want to be guided by things which have worked and also take note of things which have not worked,” Mills continued. “If at this stage we in Ghana can not learn from the experiences of our neighbors and colleagues on the continent, then we have no business being in politics.”

President Mills’ election earlier this year in the fifth successive vote since 1992 is the chief reason U.S. President Barack Obama made Ghana his first stop in Sub-Saharan Africa since taking office “Dependence on commodities or a single export has a tendency to concentrate wealth in the hands of the few and leaves people too vulnerable to downturns,” Mr. Obama said. He told lawmakers in Accra that countries thrive when they invest in their people and in infrastructure, when they promote multiple export industries, develop a skilled workforce, and create space for small and medium-sized businesses that generate jobs. “Oil brings great opportunities. And you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa,” Mr. Obama said. After years of steady growth, Ghana’s economy has slowed, in part due to over-spending by the previous government. A budget deficit that was nine percent of gross domestic product in 2007 now tops 15 percent of GDP. Inflation in May reached 20 percent.

The value of Ghana’s currency fell 13 percent in the first quarter.

“Every politician is making claims on this oil. Everyone is banking too many hopes on the oil, and that in itself is a threat,” said Abdulai Dramani, environmental program officer for the Accra-base advocacy group Third World Network-Africa. Mr. Dramani is concerned about the environmental impact of a possible oil spill and how the offshore platforms will affect the local fishing industry. “It has been fenced-off against the fisher folks, and therefore their access to fish is impaired. And that is their livelihood source. So for them, that is the danger.

Even though the oil might generate some revenue, that revenue is not likely to come to them because they have no skills of being employed,” said Dramani. Since reserves were discovered in the Jubilee field, more than 40 companies have applied for licenses to explore for oil. Dramani wants a moratorium on new licenses until Ghanaian law catches up.

President Mills says he will not allow Ghana’s oil boom to get out of hand. “I have seen all sorts of people flocking into that area. People knocking on our doors making all sorts of proposals. But we are firmly resolved to do what is right,” said Mr. Mills. “We have got our blueprint. We have got our guidelines. And we will go strictly in accordance with these guidelines. There are some who are not prepared to go in accordance with the lay-down procedure. There are some who want to be favored,” he continued. Oil could bring President Mills’ government $1 billion dollars in annual revenue by the start of next year. Ghana’s Integrated Social Development Center says past experience with African oil booms shows that the transparent management of oil funds not only improves public spending but gives the public greater confidence that their money is being handled properly.

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Indian Oil Corp., the nation’s biggest refiner, will delay crude-processing and pipeline projects overseas, including Nigeria and Turkey, because of reduced cash flow after selling fuels below cost. “We may not be able to expand overseas in a big way because of the liquidity crunch,” Brij Mohan Bansal, the company’s director of planning and business development, said in a telephone interview from New Delhi yesterday, without providing details. “We are keeping on the backburner our overseas projects, be it refineries or pipelines.”

State-run Indian Oil, which owns stakes in ventures in Africa and the Middle East, had planned to expand overseas to offset some of the loss in revenue from selling fuels below cost to help the government curb inflation. Revenue loss for Indian Oil and its rivals may reach 150 billion rupees ($3 billion) in the year ending March, Oil Secretary R.S. Pandey said on May 13.

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Jordan’s crude oil imports amounted to JOD312m in the first five months of 2009, down 64.7% compared with JOD884.4m a year ago, the Jordan Times reported.

According to the country’s Department of Statistics crude oil imports in May made only JOD43.6m, down 78.5% compared with JOD202.6m last May.

Jordan’s diesel imports totalled JOD63m in the first five months of 2009, down 47.2% compared with JOD119.4m in the same period last year.

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Nigerian militants threatened to end their cease-fire not long after it began Wednesday because they claimed the government was threatening one of their camps.

Before the cease-fire, MEND destroyed oil pipelines in Lagos during a night raid on Monday.

The militant group MEND said seven military joint task force gun boats with heavily armed troops were headed toward a camp near the border of the coastal states of Delta and Ondo.

“If this information from a very reliable source within the JTF happens to be true, the cease-fire will be called off with immediate effect,” the group’s spokesman, Jomo Gbomo, said in a statement.

“We are monitoring the armada and sincerely hope that the planned attack will be converted to a war exercise.”

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