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Agusto & Co. – A New Dawn for Nigeria’s Oil & Gas Downstream Sector?

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The Agusto & Co. 2020 Oil & Gas Downstream Report revealed that the growth of the Nigerian Oil and Gas Downstream Industry remains hindered by the lack of substantial investments, import constraints and regulated pump prices.

This is largely attributable to the dominance of the government in the Industry, particularly in relation to the importation of refined petroleum products. Over the years, the Industry has enjoyed stable demand of petroleum products as a result of the subsidies provided by the government. This contributed to the gradual the crippling of government finances.

The Federal Government of Nigeria has taken positive steps to fully deregulate the Industry. The recent plunge in the price of crude oil and petroleum products occasioned by the coronavirus pandemic and slowdown in global oil demand led to a reduction in the pump price cap of PMS to ₦123 per litre.

However, a recovery of crude oil prices in June 2020 led to the revised price of ₦143.8 per litre for PMS. The consensus medium-term outlook for the crude oil market is positive, which implies that the price of petrol will be higher than the old regulated pump price in the near future.

The pricing of PMS will continue to be overseen by the Petroleum Products Pricing Regulatory Agency (PPPRA) through a pricing template. The new pricing template takes several factors such as the petroleum product cost and the foreign currency conversion rate into consideration. 

Agusto & Co. expects the recent adjustment of the official exchange rate from ₦306 to ₦380 per US$ to test the sustainability of the pricing template before the end of 2020.

Notwithstanding, the new pricing regime is expected to emplace a more transparent operating model, stimulating investment growth and encouraging the importation of products by Oil Marketing Companies. Agusto & Co. also believes that the continuous efforts of the government to deepen the utilisation of LPG in Nigeria will continue to bear fruit in the medium to long term.

Substantial local supply of refined petroleum products is imminent with the 650,000bpd Dangote Refinery which is currently under construction. The expansion of the Waltersmith refinery by 25,000 bpd to 30,000 bpd and other smaller modular refineries are also expected to drive increased local refining capacity in the near to medium term.

Nevertheless, a significant structural change in the industry is hinged on the approval of the Petroleum Industry Bill (PIGB), which aims to create efficient and effective governing institutions with clear and separate roles.

The delay in the approval of the bill has brought about uncertainty for potential investors. However, given Nigeria’s track record of weak policy implementation and the negative impact of the COVID- 19 pandemic on economic activities, Agusto & Co. does not expect the PIGB to be approved before the end of 2020.

Declining Consumption Levels following the COVID-19 Pandemic

According to Agusto & Co.’s estimates, total consumption of white fuels in Nigeria in 2019 stood at 28.1 billion litres, translating to a total revenue of ₦4.7 trillion. Our research shows that 99% of petroleum products consumed were imported as the country’s refineries operated below the installed capacities, sometimes down for months.

For instance, no white fuels were produced at NNPC refineries for the seven months from June to December 2019 due to ongoing rehabilitation works. The impact of the COVID-19 pandemic on economic activities in Nigeria has resulted in a decline in the consumption of petroleum products.

The lockdown restrictions which were implemented by the government as part of an effort to curtail the spread of the coronavirus disease affected the consumption of PMS significantly. 

Agusto & Co. expects the consumption of petroleum products particularly PMS and ATK to decline to 27.2 billion litres in 2020 given the severely restricted travel and transportation activities during second and third quarters of the year. This is expected to translate to a decline in revenue to ₦4.3 trillion in 2020.

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AVEVA Appoints Joanna Mainguy as New Sustainability Accelerator Director

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Joanna AVEVA
Joanna Mainguy, Sustainability Accelerator Director at AVEVA
  • Joanna Mainguy will steer strategies for sustainability innovation across AVEVA’s portfolio and partner ecosystem, furthering ESG targets for 2025 and beyond

AVEVA, a global leader in industrial software, driving digital transformation and sustainability, today announced the appointment of Joanna Mainguy as Sustainability Accelerator Director.

Joanna’s appointment testifies to AVEVA’s dedication to strengthening the company’s sustainability impact in line with advancing global climate commitments. 

As Sustainability Accelerator Director, Joanna Mainguy will focus exclusively on sustainability solutions and strategies to accelerate innovation that will help AVEVA’s customers to achieve their net-zero targets.

She will look at how AVEVA leverages current market and customer analysis to inform its in-house development team, advise on new customer collaborations and on how AVEVA should grow its partnership network and M&A pipeline to reflect its sustainability priorities.

Joanna will lead the implementation of a sustainability solutions plan tailored to meet the most pressing needs of AVEVA’s industrial customers on low-carbon transition, circularity and resilience, via an integrated product, marketing and sales approach. She will work closely with AVEVA’s portfolio, business area and R&D leads to continue to develop new sustainability capabilities and drive collaboration on go-to-market initiatives that support industry with contributing to an accelerated energy transition and shift to a circular economy.

Joanna was formerly Industry Director, EMEA, for Energy & Sustainability at Microsoft, where she led strategic engagements with major energy providers and supported the energy transition with digital solutions. She has worked across the entire energy value chain and has more than 15 years of experience in process industries and the energy sector, including work for major system integrators, software and energy companies.

Lisa Wee, Global Head of Sustainability, AVEVA, said: “We are excited to welcome Joanna to AVEVA. She will bolster our mission to enable faster uptake of existing sustainability solutions across the industrial landscape, while in parallel we continue to invest in product capabilities and partnerships that will push out the frontiers of sustainability innovation for industry. At AVEVA we look to lead by example on sustainability and we achieved a 93% reduction in Scope 1 and 2 emissions last year. We aspire to help our customers better leverage digital solutions to realize their own ambitious sustainability targets early, and Joanna brings a wealth of experience to help support this.”

Commenting on her appointment, Joanna Mainguy, Sustainability Accelerator Director, AVEVA, said: “I am delighted to join AVEVA at such a pivotal time in its sustainability innovation and growth trajectory. I look forward to working with AVEVA teams and customers to continue to grow the sustainability benefits that can be achieved with AVEVA software. I am also keen to work closely with our partners to drive further positive change at scale, since we know addressing the climate crisis will continue to require expanded collaboration”.

AVEVA actively embeds sustainability into its core product strategy with specific capabilities in its software portfolio.

AVEVA’s software enables organizations to connect and contextualize key sustainability data with artificial intelligence and human insight, enhancing their agility, resilience and sustainability in order to help drive responsible use of the world’s resources.

AVEVA’s 2023 Sustainability Progress Report reveals significant progress across all three pillars of the company’s sustainability framework, encompassing product strategy, operations and culture. 

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Climate Change: NNPC Ltd/Total Energies JV Achieves Zero Gas Flare

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In pursuit of meeting the targets of 20% (unconditional) and 47% (conditional) greenhouse gas emission reduction as contained in the Nationally Determined Contribution under the Paris Accord signed by the President Bola Ahmed Tinubu administration, the NNPC Ltd/TotalEnergies Joint Venture has achieved zero routine gas flare in all its assets.

According to a statement signed by Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd., this feat was announced on Thursday during an inspection tour of OML 100 in South-eastern Niger Delta, off Port Harcourt, by a joint NNPC Ltd and TotalEnergies Team to ascertain the success of the OML Flare Reduction Project launched in December 2023.  

The NNPC Ltd/TotalEnergies Joint Venture, which is the concession holder of four leases, had hitherto achieved zero routine flaring across OML 99 (2006), OML 102 (2014), and OML 58 (2016), leaving OML 100 as the only lease with routine flaring going on.

The significance of this achievement is that the last routine flare volume of about 12MMscf/d (twelve million standard cubic feet per day) of gas has now been eliminated giving rise to a greenhouse gas emissions reduction of about 341KtCO₂e/yr.

The achievement is an outcome of a programme introduced by the NNPC Ltd to galvanize action towards achieving the zero routine flare by 2030 across its portfolio of assets.

It is also a testament to NNPC Ltd’s prioritization of sustainability anchored on the ‘first R’ of its 5R Strategy (Reduce, Replace, Renew, Re-plant, Repurpose), as it strives to reduce its carbon footprint.

Work is ongoing across all other assets within NNPC Ltd’s Upstream Directorate to ensure that all assets achieve zero routine flaring by 2030 or earlier.

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NNPC Celebrates 14,000bpd Production from Akpo West Field

By SANDRA ANI

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In line with President Bola Ahmed Tinubu’s directive to the Nigerian National Petroleum Company Limited (NNPC Ltd) to optimise production from the nation’s oil and gas assets, the Company has announced the successful commencement of oil production from the Akpo West Field.

The milestone, which is the result of meticulous planning, strategic collaboration, and unwavering dedication from all stakeholders involved in the project, will add 14,000 barrels per day condensate to the nation’s production. This will be followed up by the production of about 4million cubic meters of gas per day by 2028.

The development of Akpo West which is on Petroleum Mining Lease (PML) 2 (formerly OML 130) leverages the existing Akpo Floating Production Storage and Offloading (FPSO) facility via a subsea tie-back to keep costs low and minimize greenhouse gas emissions.

The milestone was enabled by the strategic leadership of the Group Chief Executive Officer (GCEO), Mr. Mele Kyari, and the Upstream Directorate of the NNPC Ltd whose support played no small role in propelling the operators to actualise the short- and mid-term hydrocarbon production goal of the President Tinubu administration.

Located 135 kilometres offshore, Akpo West is one of the discoveries on PML 2 with proximity to the Akpo main which started up in 2009 and produced 124,000 barrels of oil equivalent per day in 2023.

PML 2 is operated by TotalEnergies with a 24% interest, in partnership with CNOOC (45%), Sapetro (15%), Prime 130 (16%), and the Nigerian National Petroleum Company Ltd as the concessionaire of the Production Sharing Contract (PSC).

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