Economy
Illegal Bunkering: Aiteo Distances Self from Niger Delta Protests
By Dipo Olowookere
The management of Aiteo Eastern Exploration and Production Company has denied any involvement in the protests around the oil-rich Niger Delta region of Nigeria.
In a statement issued by the oil firm, it vehemently refuted the claim made by the Commander of Operation Delta Safe (OPDS), Rear Admiral Apochi Suleiman on or about June 1, 2018 citing the company and its Chief Executive, Mr Benedict Peters, as the masterminds behind the serious allegations levied against him by the people of the oil-rich Niger Delta region of Nigeria.
In the statement, Aiteo said to put the factual matrix in perspective, it appears that on June 1, 2018, hundreds of youths connected to the Niger Delta region organised a World Press Conference at Abuja within which one of the central themes was to draw attention to the activities of Rear Admiral Apochi Suleiman in his role as the OPDS, also known as Joint Task Force (JTF), Supremo. OPDS, which comprises of members of the Nigerian Navy, Army, Police, Nigeria Security and Civil Defence Corps and Custom Service personnel was designed to ensure the safety of lives and property in the Niger-Delta but with the continued unabated illegal oil bunkering activities which has translated into the loss of lives and attendant revenue to the tune of billions of dollars, allegations were made against him, accusing him of complicity in the growing menace of illegal bunkering and oil thefts and calling for his immediate removal from office.
“For the avoidance of any doubt whatsoever, any attempt by the embattled Admiral Suleiman to suggest Aiteo’s involvement in the activities of those who undertook the event or indeed any other related activity is a distraction designed to fail.
“It does not, in any way, detract from the weight of allegations with which Admiral Suleiman has been publicly confronted nor the overwhelming need for him to engage in a process that will allow him to deal with the substantive issues that flow from that event,” the statement said.
The management noted that Aiteo has enormous responsibilities in the oil industry requiring focused intensity and attention in the execution of our quite considerable commercial obligations.
With a daily production in the region of 90,000kbp, the NNPC/Aiteo JV is now directly responsible for producing 5% of the country’s daily Oil production.
In doing so, the firm said it employs over several hundred direct staff and thousands of others indirectly through contractors and service suppliers.
“This sense of responsibility is the bedrock on which our commercial and other activities are founded. Sadly, these oil thefts have meant that we are one of the biggest victims of oil theft in the country.
“As the opportunity regretfully presents, we consider it apt to clarify a number of “matters arising” from the Admiral’s unfortunate comments:
“As a result of recurrent thefts along the NCTL pipeline route resulting in significant pressure reductions on the trunk line, theft points identification as well as illegal refineries, and corroborated by several Joint Investigative visits constituted by various regulatory bodies and the applicable host community, Nigeria has experienced loss of production and revenue that should have accrued to the country. In Dec 2016 alone, 45.46% of the total net crude injected into the NCTL was lost on this basis which implies that the country lost revenues that could have been accumulated in the country’s treasury from crude sales.
“Third party interference with the line has often resulted in oil leaks which ultimately culminate in shutting down the NCTL to undertake emergency repairs. This in itself has resulted in the NCTL being shut down for about 145 days and an approximate deferment of 50.386 million barrels of Crude Oil (Net) for the 6 injectors into the NCTL since Aiteo took over the operatorship of the Trunk line in September 2015.
“As recently as May 1, 2018 there were a total of 24 illegal bunkering points identified along the NCTL. Aiteo has successfully repaired 9 of these illegal bunkering points during May 2018 at a huge cost to the company. These illegal bunkering points also contribute to the huge losses on the volumes injected across the NCTL by the six OMLs and the volumes actually received at Bonny Terminal.
“Due to the continued vandalisation of the NCTL and resulting oil theft, Aiteo has written to the Federal Government, through the Chief of Army Staff, General TY Buratai on two occasions (April 17 and 23, 2018), requesting the involvement of the Armed Forces in reinforcing existing security arrangements to the pipeline as the incessant security breaches were resulting in losses amounting to billions of Naira for the country. We have made similar efforts to various other arms of the security apparatus of the country.
“Aiteo is very concerned, not just about the effect of these disruptions on its bottom-line, but the health and livelihood of people living in these areas. This tragic trajectory is not only condemnable, but inimical to human existence, in the long term.
“Some of these issues are captured in recurring questions that may even have been articulated by those communities complaining about the OPDS’s role as follows:
“Why has large-scale illegal oil bunkering and refining assumed unprecedented dimensions in recent times?
“Is it correct that the security forces are now offering protection/escort services to those allegedly responsible for oil thefts?
“How is it that vessel movement of the oil thieves occurs unnoticed in the region despite heightened activity in large scale illegal bunkering?
“Nigeria cannot afford to remain passive as our sovereign wealth is being aggressively pilfered, aided by indifference on the part of relevant stakeholders. These activities are highly injurious to the economy of a country vacillating between recession and the fringes of economic stability. As a major indigenous producer, Aiteo identifies with issues about which the communities rightly complain. “Although – and again we make this abundantly clear – we have NOT instigated them to participate in any protest, we believe the object of their complaint about the persistence of illegal bunkering remains germane. All hands must be on deck to diminish and extinguish the theft of oil across the NCTL and other such national facilities and its attendant implications,” the statement said.
The management emphasised that as a socially responsible organisation, Aiteo understands that the community bears the brunt of illegal bunkering and refining activities.
“Indigenes of these communities remain morally and legally free to exercise their constitutionally guaranteed civic rights to peacefully protest against ills in their community till their voices are heard and desired remedial or corrective actions are taken.
“Aiteo utilizes this opportunity to reiterate its long-standing commitment to due process and international best practices in the discharge of every aspect of its statutory mandate,” it said.
By Dipo Olowookere
A 0.31 per cent gain was recorded by the Nigerian Exchange (NGX) Limited on Tuesday, helped by renewed bargain-hunting by investors, with the year-to-date return extending to 6.61 per cent.
It was observed that the growth achieved by Customs Street yesterday was supported by the banking and the industrial goods indices, which went up by 1.32 per cent and 0.69 per cent apiece.
They offset the losses recorded by the three other sectors, with the insurance counter down by 1.32 per cent, the consumer goods segment down by 0.23 per cent, and the energy space down by 0.17 per cent.
At the close of business, the All-Share Index (ASI) increased by 516.94 points to 165,901.57 points from 165,384.63 points and the market capitalization appreciated by N333 billion to N106.495 trillion from N106.162 trillion.
The market breadth index was positive yesterday after the bourse ended with 35 price gainers and 34 price losers, representing bullish investor sentiment.
The quartet of Industrial and Medical Gases (IMG), Union Dicon, Zichis, and Austin Laz chalked up 10.00 per cent each to sell for N34.65, N9.90, N5.06, and N4.07, respectively, while RT Briscoe appreciated by 9.95 per cent to N9.50.
On the flip side, Omatek lost 10.00 per cent to trade at N2.43, Cutix also fell by 10.00 per cent to N3.15, Union Homes shrank by 9.95 per cent to N76.90, Sunu Assurances declined by 9.94 per cent to N4.62, and Deap Capital crashed by 9.93 per cent to N7.62.
During the trading day, 736.4 million stocks worth N24.7 billion exchanged hands in 46,026 deals compared with the 762.8 million stocks valued at N18.4 billion traded in 55,374 deals a day earlier, indicating a rise in the trading value by 34.24 per cent, and a slip in the trading volume and number of deals by 3.46 per cent and 16.88 per cent apiece.
The activity chart was led by volume on the second trading session of the week by GTCO with 65.9 million equities valued at N6.5 billion, Chams transacted 55.7 million shares worth N249.8 million, Custodian Investment traded 49.8 million stocks for N2.2 billion, Universal Insurance sold 36.1 million equities valued at N51.5 million, and Zenith Bank exchanged 35.4 million shares worth N2.6 billion.
By Adedapo Adesanya
The oil market was up by nearly 2 per cent on Tuesday after the United States shot down an Iranian drone approaching an aircraft carrier and armed boats in the Strait of Hormuz, stoking concerns talks aimed at de-escalating US-Iran tensions could be disrupted.
This action caused the Brent futures to rise by $1.03 or 1.6 per cent to $67.33 per barrel, as the US West Texas Intermediate (WTI) futures jumped by $1.07 or 1.7 per cent to $63.21 a barrel.
Both crude benchmarks dropped more than 4 per cent on Monday after President Donald Trump said Iran was seriously talking with America.
However, the US military shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea on Tuesday.
In the Strait of Hormuz between the Persian Gulf and the Gulf of Oman, Iranian gunboats approached a US-flagged oil tanker in what US and British maritime security sources describe as a failed attempt to interfere with the vessel’s transit.
Members of the Organisation of the Petroleum Exporting Countries (OPEC) including Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia. The Strait of Hormuz, through which roughly a fifth of the world’s oil supply passes, remains Iran’s most obvious pressure point.
Despite the latest development, the UAE urged Iran and the US on Tuesday to use the resumption of nuclear talks this week to resolve a standoff that has led to mutual threats of air strikes. Iran, meanwhile, is demanding that talks be held in Oman not Turkey.
In Ukraine, President Volodymyr Zelenskiy accused Russia on Tuesday of exploiting a US-backed energy truce to stockpile munitions, and using them to attack Ukraine a day before peace talks. This boosted worries that Russia’s oil would remain sanctioned for longer.
On Monday, President Trump announced a trade deal with India, one of the world’s biggest economies and oil importers, on Monday to cut tariffs to 18 per cent from 50 per cent in exchange for the country halting Russian oil purchases and lowering trade barriers.
The American Petroleum Institute (API) estimated that crude oil inventories in the US decreased by 11.1 million barrels in the week ending January 30. Crude oil inventories decreased by 247,000 barrels in the week prior.
Official data from the US Energy Information Administration (EIA) will be published later on Wednesday.
By Adedapo Adesanya
The Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, has reiterated its commitment to playing a pivotal role to support transformative reforms in Nigeria’s power sector.
This is as it act as co-Financial Adviser to the Nigerian government on the successful issuance of the recent N501 billion inaugural tranche under the Presidential Power Sector Financial Reforms Programme (PPSFRP), as part of the N4 trillion Power Sector Bond Programme, aimed at resolving over a decade of legacy debt obligations in Nigeria’s electricity supply industry and restoring financial stability across the sector.
AFC provided comprehensive financial advisory services to the federal government, including the design of the Programme’s negotiation strategy framework, support in negotiating and executing Settlement Agreements with Power Generation Companies (GenCos), and structuring the bond issuance. Working in partnership with CardinalStone Partners as co-Financial Advisers, AFC deployed its deep sector expertise and strong local market knowledge to deliver the landmark transaction.
The programme was overseen by the Presidential Power Sector Debt Reduction Committee (PPSDRC), with technical leadership from the Office of the Special Adviser to the President on Energy, and implemented through NBET Finance Company Plc, a special purpose vehicle of Nigerian Bulk Electricity Trading Plc (NBET). Proceeds from the issuance will be used to settle verified, overdue receivables owed to GenCos for electricity supplied between February 2015 and March 2025, injecting liquidity into the power sector and extinguishing long-standing claims.
Commenting on AFC’s involvement, Mr Banji Fehintola, Executive Board Member and Head, Financial Services at Africa Finance Corporation, said: “The successful issuance of the inaugural tranche under the Power Sector Bond Programme underscores AFC’s commitment to supporting transformative reforms in Nigeria’s power sector. By resolving long-standing liquidity challenges and restoring confidence among investors and operators, this transaction lays the foundation for sustainable growth and improved electricity supply across the country.”
When fully implemented, the programme is expected to impact approximately 5,398MW of electricity generation capacity by Nigerian GenCos and finalise settlement for 290,644.84GWh of electricity billed since 2015. It will also strengthen companies serving about 12 million active registered customers, creating a solid platform for new investments in capacity enhancement and expansion.
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