Tag: oil

  • Post-coronavirus: Mining, oil & gas firms may face compliance issues PwC partner

    George Arhin, a Partner at PwC, has said mining, oil and gas entities may face challenges in complying with regulatory requirements in the local economic environment due to the coronavirus pandemic.

    According to him, although corporate income tax and employee income tax deadlines have been extended from April 30, 2020, to June 30, 2020, some companies in the value chain may fail to rake in returns amid slowdown in activity.

    “Although business activity continues in the mining and oil and gas sectors, companies have to consider external factors, such as the closure of refineries, that may impact sales in order to provide realistic estimates for self-assessments and minimise penalties,” Arhin said in a communique sighted by GhanaWeb.

    He added; “the residency status of expatriates working in some firms may be impacted for the purpose of determining their taxable income, tax rate and tax liability. In Ghana, expatriates originally engaged for 183 days or less may now be considered as permanent residents as they are likely to spend more than 183 days in Ghana due to the current border closure.”

    Meanwhile, the Chamber of Mines at its recent annual general meeting on Friday, May 29, 2020, revealed the mining sector’s total fiscal contribution which was at 7.7 percent of domestic revenue in 2019, was the second-highest after the financial and insurance sectors.

    According to the chamber, the share price of the mining and quarrying sector in total direct domestic receipts mobilized by the Ghana Revenue Authority (GRA) improved by some 70 percent from GH¢2.36 billion in 2018 to GH¢4.02 billion in 2019.

    Source: www.ghanaweb.com

  • Oil prices inch up as demand upswing counters virus concerns

    Oil prices inched up on Friday as the bullish impetus from signs of fuel demand recovery was kept in check by a rising number of new coronavirus cases in the United States and China and tentative expecations of U.S. output ticking up.

    Brent crude LCOc1 futures were 38 cents higher at $41.43 at 0829 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures were up 29 cents at $39.01.

    Both contracts are on track for a weekly fall of around 1.7% after record U.S. crude inventory data dragged prices down on Wednesday. [EIA/S]

    Analysts said satellite data showing a strong pick-up in traffic in China, Europe and across the United States pointed to an improvement in fuel demand.

    Congestion in Shanghai in the past few weeks was higher than in the same period last year, while in Moscow traffic was back to last year’s levels, data provided to Reuters by location technology company TomTom showed.

    However, there are fears a spike in COVID-19 infections in southern U.S. states could stall the demand recovery, especially as some of those states, such as Florida and Texas, are among the biggest gasoline consumers.

    The global economic outlook has also worsened or at best stayed about the same in the past month, a majority of economists polled by Reuters said, and the recession underway is expected to be deeper than earlier predicted.

    “It does appear the market is ignoring supply and demand fundamentals and moving on sentiment,” said Michael McCarthy, chief market strategist at CMC Markets.

    The prospect of increased U.S. crude production also kept a lid on gains on Friday.

    A survey of executives in the top U.S. oil and gas producing region by the Dallas Federal Reserve Bank found more than half of executives who cut production expect to resume some output by the end of July.

    Source: reuters.com

  • Sixteen upstream oil companies owe US$1.57m surface rental fees

    Sixteen oil companies in the upstream sector have failsed to pay their surface rental fees, according to an audit report by the Auditor General Department.

    The 2018 Petroleum Funds Report mentioned Tullow, Petrogulf Limited, Hess Ghana Exploration Limited, Kosmos Energy, Oil Field Energy Ltd, Britain-U Ghana Ltd, Springfield Exploration and Production Limited and Swiss African Oil Company Ltd as some of those that failed to pay as and when due.

    The rest are AMNI Petroleum Dev. Co. Limited, GNPC Operating Services (GOSCO), Medea Development International Limited, PETRICA AS, Blue Star Exploration Ghana Limited and Erin Energy.

    The report indicated that these entities have failed to honour their payments obligations into the Petroleum Holding Fund as stipulated by Section 3(2) of the Petroleum Revenue Management Act 2011 (Act 815).

    Per the law, surface rentals are to be paid by the 15th day of each month.

    However, the Auditor General observed that, regardless of stringent efforts to have especially Oil Field Energy Ltd, Britain-U Ghana Ltd, and Swiss African Oil Company Ltd to pay their obligations to the state, they have failed.

    The report noted that the Ghana Revenue Authority (GRA) was collaborating with the Petroleum Commission to ensure they comply or face the necessary sanctions.

    With reference to interest/penalty on late payment, it said section 93(5f) of the Petroluem Exploration and Production) Act 2016(919) compels the culprit to pay additional five percent of annual fee for each day of the first 30 days after the annual fee becomes due, in addition to the outstanding annual fee and after the 30-day period.

    Regarding the unpaid surface rental fees, the report stated that the Ghana Revenue Authority has been informed of the situation and the Bank of Ghana was waiting its response.

    “The estimated amount of penalties based on section 3(4) of Act 815 is US$10.79 billion. There is loss of income which would have been earned if the funds had been paid on time and invested,” the report said.

    With respect to Gosco/Heritage Exploration and Production Ghana Ltd, the report said the company has not paid their surface rental fees for East Keta Ultra Deepwater Block for 2017-2018 assessments.

    It has informed the GRA of a force majeure event that happened in December 2016 when the Togolese Navy interdicted and ordered the subcontractor engaged by the operator on behalf of the contractor parties to cease operations within the contract area.

    Source: goldstreetbusiness.com

  • Siberian oil spill contaminates Arctic lake

    An oil spill that sparked a state of emergency has contaminated a freshwater lake in the Russian Arctic, an official said Tuesday, after authorities claimed to have contained the pollution.

    The announcement came after a spokeswoman for the task force in charge of the accident clean-up told AFP last week that the spill had been contained.

    Yet local authorities in the Siberian region of Krasnoyarsk this week conceded that high concentrations of polluted water were discovered beyond floating barriers set in place to stop the fuel from spreading.

    “The fuel has got into Pyasino as well. This is a beautiful lake about 70 kilometres (45 miles) long. Naturally, it has both fish and a good biosphere,” said Krasnoyarsk region governor Alexander Uss, according to Interfax news agency.

    He added that it was important to prevent spilt fuel from reaching the Pyasina River, which flows into the Kara Sea.

    Russia President Vladimir Putin declared a state of emergency last week after 21,000 tonnes of diesel leaked from a fuel reservoir that collapsed May 29 outside Norilsk.

    The spill polluted huge stretches of river, triggering a major clean-up effort.

    Greenpeace director in Russia Vladimir Chuprov told AFP Tuesday that his teams had not been able to access the site due to restrictions in place to slow the spread of the coronavirus.

    He said it would be a “disaster” if 10,000 tonnes of fuel reached the lake, and criticised authorities for not giving more information about the extent of the spill.

    Chuprov also warned of the “harmful consequences” of the pollution reaching the Kara Sea.

    Russian officials have said that the thawing of permafrost as a result of climate change is the likely cause of the fuel tank leak.

    Environmentalists and officials say the spill is the worst accident of its kind in the Arctic region, home to much of Russia’s oil, gas and mining infrastructure and dogged by pollution since the Soviet era.

    Vladimir Potanin, head of metals giant Norilsk Nickel which owns the thermal power plant where the spill originated, told Putin last week his company would pay for clean up efforts estimated at $146 million.

    Russian officials have ordered a review of at-risk structures built on permafrost.

    Source: france24.com

  • Saudi Arabia’s oil-export revenues plunged US$11 billion in the first quarter as crude prices tanked

    Saudi Arabia’s oil exports dropped by $11 billion in the first three months of 2020, the kingdom’s statistics agency said this week.

    Saudi Arabia’s revenue from oil exports tanked 21.9% or about $11 billion in the first quarter of 2020, according to official data released by the country’s statistics agency.

    The General Authority for Statistics said the sharp decline fueled a 20.7% year-on-year drop in the kingdom’s total revenue from merchandise exports to $53 billion. The drop in exports reflected depressed oil prices last quarter, as the coronavirus pandemic hammered demand for fuel.

    Saudi Arabia and Russia also waged an oil-price war for several weeks that only ended in April after OPEC and its allies agreed to cut crude production by 10% . Lower prices contributed to oil exports making up 75.8% of Saudi Arabia’s total exports last quarter, down from 77% a year earlier.

    The global downturn didn’t just weigh on Saudi Arabia’s oil exports. Its revenue from non-oil exports, such as plastics and chemicals, fell by 16.5% in the first three months of the year.

    Saudi Arabia’s main trading partner was China last quarter, as the world’s second-largest economy bought about $9 billion worth of its exports. Japan and India were its next two biggest buyers, buying $5.3 billion and $5.2 billion of its exports respectively.

    Source: markets.businessinsider.com

  • Oil giant BP to cut 10,000 jobs

    The boss of UK-based oil giant BP has told staff it plans to cut 10,000 jobs from its global workforce after being hit hard by the coronavirus pandemic.

    In an email to staff, BP chief executive Bernard Looney said most of the jobs would go by the end of the year and the majority of people affected would be in office-based jobs.

    “We are protecting the front line of the company and, as always, prioritising safe and reliable operations,” he added.

    Source: bbc.com

  • Government working with oil companies to protect workers from coronavirus

    Deputy Minister of Energy in charge of Petroleum, Dr Mohammed Amin Adam, has said the government is supporting oil companies that are operating in Ghana to protect their workers from contracting the coronavirus.

    His comment come after over 50 workers of Tullow oil have tested positive for the COVID-19.

    Tullow in a statement last week announced that fifty-eight workers at the Jubilee field tested positive for COVID-19.

    The company however said production remains unaffected.

    But speaking to Joy News, Dr Amin Adam assured the public that the government is acting to ensure that workers of the oil firms and Ghanaians in general are protected from the pandemic.

    “We have worked with the oil companies t ensure that they adopt the protocols to ensure the safety of their workers in this COVID-19,” he said.

    Source: laudbusiness.com

  • Oil receipts up 93% in first quarter but outlook grim

    Government received US$170.3m in petroleum revenue for the first quarter of the year, an increase of 93 percent over earnings of US$88.3m in the first quarter of 2019.

    The receipts came from the sale of crude oil by the Ghana National Petroleum Corporation (GNPC) as well as payments from the oil companies, the Finance Ministry revealed in the Petroleum Receipts and Distribution Report for the first quarter of 2020.

    During the period, GNPC sold 1.9m barrels of crude oil produced from the Sankofa and TEN oilfields, but there was no lifting of cargo by the corporation from the Jubilee field.

    The government received an average price of US$63.5 per barrel for the crude oil sold, a price which is now out of range as the impact of the coronacrisis on global oil demand has more than halved international crude oil prices in the last two months.

    Government in its 2020 budget projected a crude oil price of US$62.6 per barrel and petroleum revenues of US$1.6bn for the year.

    However, following the fall in oil prices, Finance Minister Ken Ofori-Atta said preliminary analysis shows that at an average crude oil price of US$30 per barrel, the government would register a shortfall in crude oil receipts amounting to US$1bn.

    He further explained that the shortfall corresponds to a projected shortage in Annual Budget Funding Amount of GH?3.5bn, while shortfalls in the Ghana Stabilisation Fund and the Ghana Heritage Fund are GH?1bn and GH?453m respectively. It also implies transfers to GNPC will experience a shortfall of GH?642m.

    Last year, Ghana made US$937.6m in petroleum revenues, a 4 percent decline from the 2018 figure of US$977.1m. This was due to a 10.2 percent decline in the achieved price of US$63.2 per barrel in 2019 compared to US$70.3 per barrel in 2018.

    The drop also occurred at a time the operator of the Jubilee field, Tullow Oil, underwent a restructuring process amid production challenges at both Jubilee and TEN.

    The challenges at Jubilee related to re-injection of gas into oil wells, which Tullow said had led to a 30 percent cut in production. At the TEN fields, a production well at Enyerra had to be suspended, leading to a cut in production.

    In the wake of the weaker oil prices, all the multinational oil companies and GNPC have reduced planned capital investment in 2020, which could negatively affect output this year.

    Source: thebusiness24online.net

  • Maritime security seizes 10 canoes in illegal oil bunkering

    A maritime security operation to crack down on illegal oil bunkering along the coast of the Western and the Central regions has led to the seizure of 10 large-size canoes.

    The operation, which took place last Friday, involved the Marine Police Unit (MPU), the Ghana Navy and the Ghana Maritime Authority (GMA).

    The Director-General of the GMA, Mr Thomas Kofi Alonsi, who led the operation to impound the canoes, said one of the canoes contained fuel that could fill three road fuel tankers that carry 18,000 litres each.

    He also said that 20 people who were arrested on board the canoes had been granted police enquiry bail.

    The impounded canoes are currently at the Navy quayside at the home port of the Western Naval Command in Sekondi, while the GMA has indicated that it is seeking legal backing to destroy them.

    Modus operandi

    Mr Alonsi said the source of the petroleum products, mostly diesel, was the merchant vessels at the anchorage.

    On reaching the shore, he said, the fuel was transported to filling stations in the communities for sale to the public.

    He said the GMA had resorted to engaging the MPU and the Ghana Navy to combat the illegal activity.

    He said the operation would continue without fear or favour, adding that the Legal Department of the GMA had been instructed to obtain the necessary legal orders that would allow the regulator to lawfully destroy all boats seized.

    Preventive move

    At a meeting with security chiefs in the Western Region, Mr Alonsi said, it was found that the illegal fuel trade along the coast of the Western/Central enclave had assumed alarming proportions.

    “The fuel, which is usually of low quality, end up on the market, having escaped the regulatory scrutiny and quality assurance of the National Petroleum Authority, posing serious risks to vehicles,” he said.

    The  Western Naval Commander, Commodore E.A. Kwafo, said: “If not stopped, the owners of the canoes may become emboldened and start carting other illicit products, such as weapons and drugs”.

     

    Source: Graphic.com.gh 

  • COPEC urges government to cushion oil and gas companies following lockdown

    The Chamber of Petroleum Consumers (COPEC) has called on the state to also cushion Oil and Gas Companies following the challenges brought on by the coronavirus pandemic.

    In a statement, COPEC said a lot of them “are reeling heavily under the harsh effects of our 3 weeks lockdown and subsequent low volumes and revenues which can increase job losses and redundancy within the country.”

    The chamber also called on the National Petroleum Agency (NPA) to also reduce the burden of license renewal fees charged to these companies “to enable them to adjust to the vagaries of the Coronavirus outbreak on their businesses.”

    This is to ensure “they keep fuel prices lower for Ghanaians without the tendency to increase or collect their full margins which can only lead to increases in pump prices.”

    COPEC finally called for an increased moratorium of the next six months for Oil Companies to file returns instead of the current moratorium which runs to July.

    It argued that “sales volumes across the board have reduced significantly and any attempts to enforce the earlier 21 or 45-day collections could only mean going to the banks to borrow which eventually places undue pressures on them to engage in all manner of games to survive.”

    Find below the full statement

    RESOLVE THE GCNET/UNIPASS ISSUE IMMEDIATELY TO CURTAIL ANY FUEL SHORTAGES ACROSS THE COUNTRY.

    The ongoing challenges in respect of revenue settlement following from a decision to migrate onto a new platform (UNIPASS) from the existing GCNet platform is leading to a lot of challenges with petroleum liftings across depots in the country.

    Oil Marketing Companies ( OMCs ) and the Liquified Petroleum Gas Marketing Companies ( LPGMCs ) that had orders for supply of fuel to various outlets could not load a single litre of fuel all day on Wednesday the 29th of April due to discrepancies in the migration onto the new customs system ( UNIPASS ) at the depots.

    A communique issued earlier yesterday from the NPA indicating a swift response to resolve the issue to enable the liftings seemed not to have yielded as most Oil Marketing Companies and the LPGMCs had to make alternative arrangements to accommodate their drivers who had been dispatched to load products from the depots across the country.

    This situation if left unresolved within the next 24 hours could and will certainly lead to serious fuel shortages across the country.

    One would expect that the new system would have been rolled out gradually side by side with the old system in order to help in facilitating a gradual phasing out of the existing system ( GCNet ) but the seeming haste in abandoning the old system whiles the new system ( UNIPASS) is not fully ready and integrated is clearly leading to discrepancies being witnessed and we wish for a speedy resolution to forestall any possible shortages across the country.

    Our attention has further been drawn to the cutting of staff numbers by some of our Oil Companies due to the adverse effects of Coronavirus on volumes and revenues through a lot of others have refused to lay off.

    In light of the above, we call on the State to ensure the various Oil and Gas Companies are not left out in the announced SME support as a lot are reeling heavily under the harsh effects of our 3 weeks lockdown and subsequent low volumes and revenues which can increase job losses and redundancy within the country.

    We further call on the Regulator of the downstream ( NPA ) to also work out a mechanism to ease down on the heavy license renewal fees charged to these companies to enable them to adjust to the vagaries of the Coronavirus outbreak on their businesses with the view to ensuring they keep fuel prices lower for Ghanaians without the tendency to increase or collect their full margins which can only lead to increases in pump prices.

    Finally, we will like to reiterate an earlier call on the Ghana Revenue Authority to give a moratorium for the next 6 months to Oil Companies instead of the current one spanning up to end of July to file their returns later than the current 45 days since sales volumes across the board has reduced significantly and any attempts to enforce the earlier 21 or 45-day collections could only mean going to the banks to borrow which eventually places undue pressures on them to engage in all manner of games to survive.

    Signed

    Duncan Amoah
    Executive Secretary

     

    Source: citinewsroom 

  • U.S.’s Mnuchin considers lending program for struggling oil companies

    Treasury Secretary Steven Mnuchin said he is considering a government lending program for U.S. oil companies looking for federal aid as they cope with a devastating plunge in prices, Bloomberg News reported on Thursday.

    Oil prices have crashed as demand has shrunk due to lockdowns during the coronavirus pandemic.

    “One of the components we’re looking at is providing a lending facility for the industry. We’re looking at a lot of different options, and we have not made any conclusions,” Mnuchin told Bloomberg News in an interview bloom.bg/2xTUBFK.

    U.S. crude oil futures collapsed to trade in negative territory for the first time in history on Monday, as desperate traders paid to get rid of barrels amid a dearth of storage space.

    Last week, Energy Secretary Dan Brouillette told Reuters he was working with Mnuchin to roughly double the size-limit on loans available to mid-tier U.S. energy companies under the recently passed CARES Act stimulus package to $200 million-$250 million.

    Crashing oil prices have prompted shale companies to slash spending and halt drilling activity.

    President Donald Trump said on Tuesday he asked his cabinet to devise a plan to inject cash into the ailing U.S. oil-drilling industry.

    Source: reuters.com

  • Coronavirus: Oil plunges for a second day on gloomy outlook

    The UK benchmark for oil has fallen by more than 10% to around $16 (£13) a barrel.

    It comes the day after the price of West Texas Intermediate (WTI), the benchmark for US oil, fell below zero for the first time ever.

    The falls are a striking illustration of just how much economic activity has slowed around the world.

    Prices have weakened sharply because of a combination of events triggered by a collapse in global demand.

    The knock-on effect has been a supply glut and a worldwide shortage of storage space for oil.

    On Tuesday energy ministers from the Opec and other major oil-producing countries held an unscheduled conference call to discuss the collapse but did not agree any new measures to cut supplies.
    Storage issues

    “This is an unprecedented demand drop. Nobody in their lifetime has seen anything like this,” said James McNally of Third Bridge Group.

    The collapse in physical demand for crude products like petrol and jet fuel has left storage hubs at capacity or, as one trader put it: “They’re close to the brim.”

    Storage at US oil hub Cushing has already grown to more than 15 million barrels in the past month – and is expected to soon be at capacity for the first time ever.

    Coronavirus is rewriting the rules of the global economy in front of our very eyes,” said Adam Vettese, analyst at eToro.

    “With oil demand virtually non-existent, this quite amazing sell-off is almost entirely down to fears over storage.”

    Will the price of petrol fall?

    While the price of petrol is linked to the wholesale price of oil, it is driven by competition.

    That means that what motorists pay is not directly linked to crude. Instead, suppliers control the prices they sell petrol at.

    Crucially, a key factor affecting the price of fuel is that the biggest proportion of the money you hand over for a litre of petrol in the UK goes to the government in the form of tax.

    Fuel duty is charged at 57.95p per litre. On top of that, you have to pay VAT at 20% on the cost of petrol.

    Below £1 a litre?

    Could this week’s oil price turmoil see prices drift below £1 for the first time since the late 2000s?

    “In theory, petrol prices could fall below £1 per litre if the lower wholesale costs were reflected at the pumps – but at the same time, people are driving very few miles, so they’re selling vastly lower quantities of petrol and diesel at the moment,” pointed out RAC fuel spokesman Simon Williams.

    This means many forecourts will be reluctant to trim their prices any further, he said.

    At the same time, he said, more price pressure on petrol could hit the viability of independent garages, which provided “a vital service in areas where the supermarkets don’t have a foothold”.

    “It would be bad news all round if these forecourts shut up shop for good.”

    Are pump prices fair?

    Since the end of March, the wholesale price of petrol has been around the 16p a litre mark, according to the AA.

    “Add fuel duty at 57.95p a litre, a generous 9p a litre supplier/retailer margin, plus VAT and the average pump price of petrol would normally be around £1 a litre,” said the AA’s fuel spokesperson Luke Bosdet.

    Instead, the average pump price is higher because the retailers say they need to charge 10p a litre more to offset the lower volumes of fuel they are selling, he pointed out.

    Journey levels are at about 40% of normal during the working week, falling to 20% by Sunday.

    This meant those who were still driving were being “overcharged on average by more than a fiver a tank”.

    “I suspect that when the lockdown comes to an end, coronavirus is beaten and driving starts to return to normal, questions will be asked about the fairness of pump prices during the great oil crash of 2020.”

    Source: bbc.com

  • US oil prices turn negative as demand dries up

    The price of US oil has turned negative for the first time in history.

    That means oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May.

    Demand for oil has all but dried up as lockdowns across the world have kept people inside.

    As a result, oil firms have resorted to renting tankers to store the surplus supply and that has forced the price of US oil into negative territory.

    The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell as low as minus $37.63 a barrel.

    “This is off-the-charts wacky,” said Stewart Glickman, an energy equity analyst at CFRA Research. “The demand shock was so massive that it’s overwhelmed anything that people could have expected.”

    The severe drop on Monday was driven in part by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on Tuesday. Traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.

    June prices for WTI were also down, but trading at above $20 per barrel. Meanwhile, Brent Crude – the benchmark used by Europe and the rest of the world, which is already trading based on June contracts – was also weaker, down 8.9% at less than $26 a barrel.

    Mr Glickman said the historic reversal in pricing was a reminder of the strains facing the oil market and warned that June prices could also fall, if lockdowns remain in place. “I’m really not optimistic about the prospects for oil companies or oil prices,” he said.

    OGUK, the business lobby for the UK’s offshore oil and gas sector, said the negative price of US oil would affect firms operating in the North Sea.

    “The dynamics of this US market are different from those directly driving UK produced Brent but we will not escape the impact,” said OGUK boss Deirdre Michie.

    “Ours is not just a trading market; every penny lost spells more uncertainty over jobs,” she said.

    The oil industry has been struggling with both tumbling demand and in-fighting among producers about reducing output.

    Earlier this month, Opec members and its allies finally agreed a record deal to slash global output by about 10%. The deal was the largest cut in oil production ever to have been agreed.

    But many analysts say the cuts were not big enough to make a difference.

    “It hasn’t taken long for the market to recognise that the Opec+ deal will not, in its present form, be enough to balance oil markets,” said Stephen Innes, chief global market strategist at Axicorp.

    Source: bbc.com

  • Oil market falls too big to offset with output cuts, IEA warns

    The International Energy Agency (IEA) on Wednesday forecast a 29 million barrel per day (bpd) dive in April oil demand to levels not seen in 25 years and warned no output cut by producers could fully offset the near-term falls facing the market.

     

  • Oil prices rebound on hopes for output cut deal

    Oil prices rebounded Tuesday on fresh hopes an OPEC-led meeting this week will reach an agreement to reduce oversupply and shore up the market.

    Prices have fallen sharply since expectations for a quick deal to cut output levels were dashed, but the rescheduling to Thursday of a meeting of major crude producers boosted sentiment.

    US benchmark West Texas Intermediate was up 3.83 percent to $27.08 a barrel in Asian morning trade.

    A barrel of Brent crude, the international benchmark, was trading 2.81 percent higher at $33.98.

    Prices fell to 18-year lows last week as the market wallowed in oversupply arising from a price war between Saudi Arabia and Russia, which have ramped up production.

    “Prices recovered some of the early losses, as both Russia and Saudi Arabia suggested they would be willing to cut production but only if the rest of the world followed suit,” ANZ Bank said in a note.

    “The stumbling block appears to be the US, which is reluctant to join an agreement.”

    But with US Energy Secretary Dan Brouillette holding talks with Saudi Arabia and Russia, “the market is hopeful of some sort of agreement,” the bank added.

    OPEC is the Organization of the Petroleum Exporting Countries of which Saudi Arabia is the biggest producer, while Russia is not an OPEC member.

    “Ultimately there is hope that cooler heads will prevail, and producers will reconcile and formulate a response that puts a floor under oil prices,” said AxiCorp global market strategist Stephen Innes.

    “Still, the challenge remains to the extent which producers are willing to cut.”

    Source: France24

  • Oil crashes below $20

    The great oil crash of 2020 ain’t over yet.

    US crude plunged nearly 7% and finished at an 18-year low of $20.09 a barrel Monday as the coronavirus pandemic continues to deal a devastating blow to energy demand.

    At session lows, oil touched $19.27 a barrel — the weakest intraday price since February 2002.

    Brent crude, the world’s benchmark, tumbled as much as 13% and fell to as low as $21.65 a barrel, its lowest point in 18 years. Brent settled at $22.76 a barrel, the lowest close since November 2002.

    The renewed selling in the oil patch underscores the unprecedented collapse in demand caused by the social distancing restrictions imposed by governments around the world. Highways are empty. Entire airlines are shutting down. Macy’s (M) just furloughed a majority of its 125,000 workers.

    Factories large and small have halted production.

    Global oil consumption will likely crater by 12 million barrels per day this quarter, or 12%, the steepest decline ever recorded, according to Bank of America.

    “It is very ugly and there is no way to sugarcoat it,” Bank of

    America commodity analysts wrote in a Monday note to clients.

    At the same time, Saudi Arabia and Russia are flooding the world with excess oil — at exactly the time when the opposite approach is required. That price war is exacerbating the pain in the oil market.

    Those two factors have driven US oil prices down by a stunning 68% since the recent peak of $63.27 a barrel in early January.

    The selling comes after President Donald Trump, heeding the advice of health experts, extended federal social distancing guidelines until April 30. And Dr. Anthony Fauci, the nation’s top infectious disease expert, warned on CNN the United States could see millions of coronavirus cases and 100,000 or more deaths.

    Source: edition.cnn.com

  • Oil price drops again to US$31, fuel prices to reduce today

    Few days after bouncing back from its sharp decline in nearly two decades, oil prices have gone down once again today.

    This was after a Saudi-Russian price war and an equities meltdown sparked by the coronavirus pandemic saw their biggest weekly losses in more than a decade.

    The Brent global benchmark was down 6% at $31.88 a barrel.

    Last week’s price war began after Saudi Arabia and other members of the OPEC oil cartel pushed for an output cut to combat the impact of the virus outbreak.

    But Moscow, the world’s second-biggest oil producer, refused prompting Riyadh to drive through massive price cuts and pledge to boost production.

    The COVID-19 outbreak added to downward pressure as it throttled global equities, with growing concerns over a potential worldwide recession and escalating travel restrictions prompting a crash in demand forecasts.

    Meanwhile, fuel prices at the pumps are expected to go down by about 10% today.

    The Institute for Energy Security (IES) had forecast between 5% and 8% price reduction in the price of fuel in the second pricing-window of March 2020.

    “Taking into consideration the 18.97% plummeting in prices of Crude oil, coupled with the 15.81% and 19.51% considerable crushing in the prices of Gasoil and Gasoline respectively on the international market; the Institute for Energy Security (IES) foresees prices of fuel on the local market falling by 5% to 8% in the second Pricing-window for March 2020”, the IES said in a statement.

    Source: classfmonline.com

  • Oil price bounces back on Tuesday

    A sharp bounce in the price of oil Tuesday provided some support to under-pressure stocks in early Asian trade, a day after global equities suffered their biggest losses in more than a decade.

    World stock markets had capitulated on what has become known as “Black Monday”, with the Dow Jones Index in the US losing more than 2,000 points, and the crash even triggering the emergency break in early trade amid panic selling.

    But there was some relief on Tuesday as oil prices jumped around 5% after plunging by a third the previous day, in their worst session since the 1991 Gulf War.

    Brent crude advanced 4.6% to around $36 a barrel.

    Japan’s main Nikkei index opened three percent lower following the dizzying falls on Wall Street but later pared back losses by more than half.

    An hour and a half into trade, the Nikkei stood at 19,622.05 points, a loss of 0.4% compared to the previous day.

    The Nikkei was helped by a sell-off in the yen, which is normally heavily bought during times of market uncertainty. A weaker yen is positive for exporters on the Japanese market and usually boosts their share prices.

    The market in Seoul was down 0.4% and the ASX in Australia pared losses to around one percent after opening lower by nearly four percent.

    In China, where authorities reported the lowest number of fresh coronavirus cases since data started being reported in late January, the benchmark Shanghai Composite Index opened 0.61% higher at 2,961.38 points.

    The Shenzhen Composite Index, which tracks stocks on China’s second exchange, opened 0.63% higher, up 11.68 points, at 1,854.34.

    Market panic had been driven by uncertainty over the spreading coronavirus but also a spat between Saudi Arabia and Russia over oil production that had battered prices.

    Source: fin24.com

  • Asian stock markets tumble after oil prices crash

    Asian stock markets fell sharply on Monday spooked by a major crash in oil prices and weak economic data.

    In Japan, the benchmark Nikkei 225 index fell more than 5% while in Australia, the ASX 200 slumped 7.3%, its biggest daily drop since 2008.

    Markets have been rattled by the threat of a price war between oil exporting group Opec and its main ally Russia.

    Asian investors also reacted to a slump in Chinese export figures and the shrinking of the Japanese economy.

    Global markets have already seen heightened volatility over fears of a major economic hit from the coronavirus outbreak.

    With oil prices crashing more than 30% on Monday, energy firms have seen some of the biggest share price falls.

    Australia-listed Oil Search’s share price dropped by 31% while energy firm Santos saw its shares drop more than a quarter in value (27%).

    Oil and other commodity companies make up a large part of the Australian stock market.

    In China, its benchmark Shanghai Composite fell almost 2%, while in Hong Kong, the Hang Seng index plummeted 3.7% in early trading on Monday.

    “China will make its contribution to the thunder clouds hanging over markets as Monday starts,” said Jeffrey Halley, senior market analyst at broker OANDA.

    On Saturday, China released import and export figures for the first two months of the year. Exports fell by 17.2% while imports dropped by 4%. This gave the Chinese economy a trade deficit of $7.1 billion as it struggles with the economic impact of the coronavirus outbreak.

    “China may slowly be returning to work, but manufacturers will now likely be facing an international fall in demand, with coronavirus now well-established outside of Chinese shores,” added Mr Halley.

    In Japan, market sentiment was hit by GDP data that showed a plunge in economic growth of -7.1% in the fourth quarter of 2019.

    Source: bbc.com

  • Fuel prices to remain unchanged – IES

    Price of petroleum products on the local market will remain largely stable at least for the next two weeks.

    According to the Institute of Energy Security (IES), this is due to the relative stable prices of petrol and diesel on the international market, coupled with the 1.32% upward reverse in price of International Benchmark – Brent Crude.

    However, it said competition between Oil Marketing Companies (OMCs) to control and gain more market shares may result in selling price of fuel falling marginally within the first Pricing-window of March 2020.

    Oil prices reverse upward briefly within the second Pricing-window under review as implied demand destruction was less than expected.

    However, oil prices fell on Friday, 21st of February, as OPEC decided not to move its March meeting forward while Russia indicated that it currently has no intentions to cut production further. Brent crude rallied marginally by 1.32% from $55.89 per barrel to close at $56.63 per barrel on average terms during the period under review.

    From the Foreign Exchange market, the cedi appreciated by 4.98% against the U.S. dollar, trading at an average price of Gh¢5.34 to the U.S. Dollar over the period under review; from a previous rate of GH¢5.62 recorded in the first Pricing-window of February, 2020.

    Meanwhile, fuel prices at the pump experienced reduction across some major OMCs including Goil, Total Ghana and Zen Petroleum in the Pricing-window under review as projected by the IES.

    While Goil and Total Ghana shaved-off 1.28% and 0.91% for petrol and diesel, Zen Petroleum gave away a whopping 6% for petrol and diesel to sell at GH¢4.92 per litre; thus, making Zen petroleum the OMC with the least selling price.

    However, the second Pricing-window of February 2020 saw some OMCs maintaining their prices at the pump to record a national average price of GH¢5.41 and Gh¢5.40 for petrol and diesel respectively.

    Within the period under review, Benab Oil, Nick Petroleum, Frimps, Champion and Cash Oil, joined Zen Petroleum as OMCs that sold the least-priced on the local market relative to others in the industry as found by IES Market-scan.

  • Cannabis oil products could be off the shelves in a year

    Oils, snacks and drinks containing the cannabis extract cannabidiol (CBD) will be “taken off the shelves” next year if they do not gain regulatory approval.

    The Food Standards Agency (FSA) said products had to be registered by March 2021 or they would be pulled.

    Despite rising sales of CBD goods, not one product has been approved in the UK yet, raising safety concerns.

    The FSA has also issued new advice on CBD use, saying it should not be used alongside other medication.

    Cannabidiol is derived from cannabis but does not have any psychoactive properties. It is sold in some pharmacies and health food shops as a supplement and used to treat conditions such as pain or insomnia.

    However, the FSA only began regulating the market in January last year and some argue it has dragged its feet.

    Trials have found CBD products on sale that contain unlisted and potentially hazardous ingredients, or illegal levels of tetrahydrocannabinol (THC), the psychoactive ingredient in cannabis.

    Many may contain little or none of the extract itself, contrary to their marketing claims and despite their high prices.

    The FSA said producers had been slow to submit their products for approval, forcing it to impose the deadline.

    “The CBD industry must provide more information about the safety and contents of these products to the regulator by March 2021, or the products will be taken off the shelves,” boss Emily Miles said.

    Source: bbc.com

  • Govt clears legacy debts to bulk oil distributors – Senyo Hosi reveals

    The government has fully paid off its indebtedness to bulk oil distribution companies (BDCs) that accrued between 2011 and 2015, the Chief Executive Officer of the Chamber of Bulk Oil Distribution Companies, Senyo Hosi has revealed.

    According to Mr Hosi, the final payments, which included interests accrued on the debt, was done on January 13, 2020, through bonds issued by the Energy Sector Levies Act (ESLA) to the Legacy Bonds Limited, a special purpose vehicle jointly owned by the Ghana Chamber of Bulk Oil Distributors (CBOD) and the Ghana Association of Bankers (GAB).

    A press statement from CBOD issued Monday [February 10, 2020) said the amount received was now due for redistribution to beneficiary banks and petroleum service providers.

    Below is a copy of the press statement from CBOD

     

    Source: Graphic.com.gh

  • Oil falls to nearly $56 a barrel, its lowest in a year

    Oil prices fell on Monday to their lowest in more than a year, dragged down by worries about lower demand in top crude importer China after a new coronavirus outbreak spread from there to about 20 other countries.

    Brent crude was at $56.26 a barrel by 9.26 am GMT, down 36 US cents. Prices dropped by more than a $1 earlier in the session to $55.42, the lowest since January 2019.

    US West Texas Intermediate (WTI) crude fell 5c to $51.51 a barrel, after earlier hitting a session low of $50.42, the lowest since January 2019.

    On the first day of trade in China after the New Year holiday, investors erased $393bn from China’s benchmark stock index on Monday, sold the yuan and dumped commodities as fears about the virus dominated the markets.

    Iranian oil minister Bijan Zanganeh said the spread of the coronavirus had hit oil demand and called for an effort to stabilise oil prices.

    “The oil market is under pressure and prices have dropped to under $60 a barrel and efforts must be made to balance it,” Zanganeh said.

    He said Iran would agree to hold an earlier Opec meeting if the rest of the group’s members agreed to oil production cuts. Opec and its allies, a group known as Opec+, are considering meeting in February instead of March.

    Joint Technical Committee (JTC), made up of members of Opec and other producers, is scheduled to meet in early February to assess the virus effect, Opec+ sources said. “The market needs assurances that the supply/demand equation remains in balance for prices to hit a floor. This suggests a commitment from Opec not just to extend oil supply cuts, but even implement deeper ones beyond March,” said FXTM analyst Hussein Sayed.

    As the coronavirus outbreak hit fuel demand in China, Sinopec Corp, Asia’s largest refiner, told its facilities to cut throughput this month by about 600,000 barrels per day.

    Independent refineries in Shandong province, which collectively import about a fifth of China’s crude, also slashed output by 30% to 50% in just over a week, executives and analysts said.

    “Clearly travel restrictions and the extended shutdown of large parts of the Chinese industrial sector have weighed on oil demand and this is reflected in the weakness that we are seeing in the ICE Brent time spreads,” ING analyst Warren Patterson said.

    The premium of the first-month Brent contract to the second-month contract narrowed to 9c a barrel on Monday from 70c a month ago, indicating that traders are not concerned about supply tightness because of the demand effect of the coronavirus.

    Source: businesslive.co.za

  • Oil prices rise after Iraq missile attacks

    Oil prices have risen after two bases hosting US troops in Iraq were hit by ballistic missiles.

    Brent crude was up by 1.4% at $69.21 per barrel in the middle of the Asian trade, easing back from earlier gains.

    So-called safe haven assets, like gold and the Japanese yen, also rose on the news.

    At the same time global stock prices were sent lower on concerns over the growing conflict in the Middle East.

    Read:Iran says oil field found with 53 bln barrels of crude

    Japan’s benchmark Nikkei 225 stock index fell by 1.3%, and Hang Seng in Hong Kong was down 0.8%.

    Iranian state television said the attack was a retaliation for the killing of the country’s top commander Qasem Soleimani.

    The attack happened just hours after the funeral service for Soleimani, who was killed by a US drone strike on Friday.

    His death had raised concerns that the conflict between the US and Iran could escalate further.

    Read:US blames Iran for attacks on Saudi oil facilties

    That could disrupt shipping in the world’s busiest sea route for oil, the Strait of Hormuz. Around a fifth of global oil supply passes through the strait which connects the Gulf with the Arabian Sea.

    The Strait of Hormuz is vital for the main oil exporters in the Gulf region – Saudi Arabia, Iraq, the UAE, and Kuwait – whose economies are built around oil and gas production. Iran also relies heavily on this route for its oil exports.

    Qatar, the world’s biggest producer of liquefied natural gas (LNG), exports nearly all its gas through the strait.

    Read:World War 3: Iran fires missiles at US targets in Iraq: All the latest updates

    After the latest attacks, the US aviation regulator banned American airlines from flying over Iraq, Iran and neighbouring countries. The ban includes the Gulf of Oman and the waters between Iran and Saudi Arabia.

    The Federal Aviation Administration (FAA) said the decision was in response to heightened military activity, and increased political tension in the region.

    Before the latest guidance, the FAA had already prohibited US airlines from flying below 26,000 feet (7,925 metres) over Iraq and from flying over an area of Iranian airspace above the Gulf of Oman since Iran shot down an American drone in June 2019.

    At the same time Singapore Airlines has said that all of its flights would now be diverted from Iranian airspace.

    Source: bbc.com

  • Iran attack: Oil prices rise after Iraq missile attacks

    Oil prices have risen after two bases hosting US troops in Iraq were hit by ballistic missiles.

    Brent crude was up by 1.4% at $69.21 per barrel in the middle of the Asian trade, easing back from earlier gains.

    So-called safe haven assets, like gold and the Japanese yen, also rose on the news.

    At the same time, global stock prices were sent lower on concerns over the growing conflict in the Middle East.

    Oil price surges above $70 a barrel

    Japan’s benchmark Nikkei 225 stock index fell by 1.3%, and Hang Seng in Hong Kong was down 0.8%.

    Iranian state television said the attack was a retaliation for the killing of the country’s top commander Qasem Soleimani.

    The attack happened just hours after the funeral service for Soleimani, who was killed by a US drone strike on Friday.

    His death had raised concerns that the conflict between the US and Iran could escalate further.

    That could disrupt shipping in the world’s busiest sea route for oil, the Strait of Hormuz. Around a fifth of global oil supply passes through the strait which connects the Gulf with the Arabian Sea.

    The Strait of Hormuz is vital for the main oil exporters in the Gulf region – Saudi Arabia, Iraq, the UAE, and Kuwait – whose economies are built around oil and gas production. Iran also relies heavily on this route for its oil exports.

    Qatar, the world’s biggest producer of liquefied natural gas (LNG), exports nearly all its gas through the strait.

    After the latest attacks, the US aviation regulator banned American airlines from flying over Iraq, Iran and neighbouring countries. The ban includes the Gulf of Oman and the waters between Iran and Saudi Arabia.

    From selling of shirts, watches to owning Oil & Gas Company, the story of Ethel Laurel Akafful

    The Federal Aviation Administration (FAA) said the decision was in response to heightened military activity and increased political tension in the region.

    Before the latest guidance, the FAA had already prohibited US airlines from flying below 26,000 feet (7,925 metres) over Iraq and from flying over an area of Iranian airspace above the Gulf of Oman since Iran shot down an American drone in June 2019.

    At the same time, Singapore Airlines has said that all of its flights would now be diverted from Iranian airspace.

    Source: bbc.com

  • Nigerian communities struggle with devastating oil spills

    Martha Alfred used to harvest 20 bags of cassava each year before an oil spill forced her to abandon her field and hawk roasted fish to survive.

    Her smallholding at Ikarama-Okordia, a community in southern Nigeria’s Bayelsa state, became unfit for growing crops after crude from a nearby Shell facility spewed into the environment last August, she says.

    Today, the 33-year-old mother of two looks angry and helpless, her woes compounded by downpours during the last rainy season that flooded her land.

    “The soil has become infertile because of the spills,” Alfred told AFP.

    “Each time I remember the spills and now the floods, my heart bleeds,” she said.

    “People from Shell came and promised to do something for me. Up until now I have not heard from them.”

    Ikarama-Okordia, a collection of villages, is one of the most polluted sites in the oil and gas-rich Niger Delta.

    A major pipeline that passes through the fishing and farming community of 50,000 people has been the subject of spills and militant attacks for over 20 years.

    Shell said it recorded a total of 21 spills in the area between 2009 and 2018.

    Overall, rights groups say that millions of barrels of crude have leaked out across the Niger Delta region over the years.

    The oil companies blame most of the leaks on sabotage from local residents and criminal gangs stealing the crude.

    But under Nigerian laws, the firms are obliged to clean up all spills whatever their cause.

    Villagers argue some spills are due to operational factors.

    “It’s not completely true all the incidents are caused by sabotage. Some of them are due to equipment failures,” Ikarama community leader Morris Lamiengha told AFP.

    Asked about the allegations from the residents of Ikarama-Okordia, Shell insisted it meets its obligations on all clean-ups and helps affected communities whatever the reasons for the leakages.

    “Shell has always and will always live up to its responsibility,” spokesman Bamidele Odugbesan told AFP.

    “The problem we face is re-pollution. After we clean a site, the vandals will go back and damage the facility to steal the oil without considering the negative impact on the environment.”

    ‘Destroyed the ecosystem’

    A vicious cycle is repeated across the entire region: environmental degradation, pollution, neglect, under-development, anger, frustration and pain.

    In oil-rich Ogoniland, it took a 2011 United Nations Environment Progamme (UNEP) report before the government launched a clean-up of the spills in the area that looks set to last some 30 years.

    In Oloibiri, where crude was first discovered in Nigeria in 1956, the locals live in abject poverty. No jobs, roads, hospitals and schools.

    The Oloibiri oil well no longer produces and is overgrown with weeds, while the residents drink and wash in stream water.

    A government promise in 2001 to erect an oil museum in Oloibiri as a monument to the first oil well in Nigeria has yet to be fulfilled.

    Locals and environmental campaigners say oil majors like Shell, Exxon Mobil, Eni, Total and Chevron, are not doing enough for host communities despite many decades of oil exploration in the region.

    Nigeria, Africa’s largest producer, produces an average of two million barrels of crude per day, which accounts for 90 percent of foreign exchange earnings.

    “The oil firms have destroyed the region’s ecosystem through their operations,” said Michael Karikpo of Environmental Rights Action lobby group.

    He said the people’s mainstay of farming and fishing has been ruined without providing an alternatives, forcing local residents to engage in criminality for survival.

    “That’s why incidents of bunkering, oil thefts, pipeline vandalisation and illegal refineries will continue in the Niger Delta,” he said.

    He said only very few Nigerians were benefiting from oil money, while tens of millions eke out a living on less than two dollars per day.

    For him, the only way to avoid spills is do away with oil production entirely.

    “We should stop oil production in Nigeria because of its negative impact on the people and the environment and focus more on renewable energy,” he added.

    ‘Sitting on gunpowder’

    Anyakwee Nsirimovu of Niger Delta Civil Society Coalition said the nation is “sitting on a keg of gunpowder if nothing is done to address the grievances of the oil-producing communities”.

    He said rather than being a benefit, “oil has been a curse for the people”, adding that there was little or nothing to show for the billions of dollars made from the sector.

    “Our situation is like someone who lives at the bank of a river but washes his hand with spittle,” he said.

    He recalled the unrest in the region in the early 2000s by militants seeking a fair share of the nation’s oil wealth for the local people.

    Months of militant attacks on pipelines and oil infrastructure slashed Nigeria’s output to less than a third at the time, hurting government revenues.

    It took a 2009 government amnesty for the oil rebels before they laid down their arms and halted the attacks.

    Source: France24

  • H1 2019: Oil revenue falls by US$112.71m

    In the first half of 2019, Ghana received US$311.22 million from the three oil fields Tweneboa, Enyenra and Ntomme (TEN), Jubilee field and Sankofa Gye Nyame fields as against the US$423.93 million recorded in the second half of 2018, the Bank of Ghana (BoG) has announced.

    The BoG attributed the shortfall to the lower lifting receipts, predominantly a result of lower crude oil prices.

    Hills Oil Marketing Company refutes tax, excise duty default claims

    The report said : “During H1 2019, the Ghana Group (GNPC lifting on behalf of Government of Ghana) lifted three (3) parcels of crude oil (10th, 11th & 12th liftings) from the Tweneboa, Enyenra and Ntomme (TEN) field, Jubilee field ( 47th ,48th & 49th liftings) and one from Sankofa Gye Nyame field (2nd lifting).

    “The lifting proceeds received into the PHF in H1 was US$311.22 million compared to receipts of US$423.93 million in H2, 2018.

    “The H1 lifting receipts comprised US$117.37 million for TEN (10th & 11th liftings) compared to 123.88 million for H2 2018, US$123.85 million from Jubilee (47th & 48th liftings) compared to US$200.30 million for H2 2018, and US$70.00 million from Sankofa Gye Nyame (2nd lifting).

    “The lower lifting receipts are predominantly a result of lower crude oil prices.

    Nigeria naira weakens on falling oil prices, lower bond yields

    “During the period under review, a total amount of US$123.26 million was received from various entities for the payment of surface rental, corporation income tax, and interest accrued on the PHF account.

    “The amounts received in respect of other incomes comprise of US$1.138 million from interest on undistributed funds held in the PHF, US$0.595 million for surface rental and US$121.53 million for corporation income tax.”

    Source: classfmonline.com