AUGUST 2020 VOL. 3 NO. 08 C ONTENTS 4 EDITORIAL INDUSTRY 26 5 Oil Demand Expected to Increase in 2022 Concerns Heighten 6 Covid-19: How Oil and Gas Firms Lost N84bn Revenue 8 Host Communities, Operators Spar over over Domestic Gas Location of Lagos Tank Farms 10 Kyari Lists Parametres to Pricing Sustainable Growth in Nigeria Petroleum Industry ...as FG raises committee 12 OPEC+ Moves to Maintain Production Cuts as Oil Recovery Slows to resolve issue 14 AKK Gas Pipeline: Game-changer for North’s Industrialisation? 17 NCDMB Tower Shines, Glimmer of Hope for Niger Delta Infrastructure ...As IOCs urged to return 31 Oil, Gas Industry Must Continue to Adapt in Order to Thrive - Sarki 36 Gas Expansion Programme will Create 12m Jobs – Sylva 38 AUGUST SHORT TAKES ENERGY 31 Celebrating Milestones in Nigeria’s Power Sector? LIFE 35 What Women Want 50 ENTERTAINMENT Uproar over Proposed 6% 40 ‘Entanglements’ in Big Brother Stamp Duty on Rents Naija HEALTH 44 Appreciating the COVID-19 Pandemic MOTORING 46 History, as Stallion Holds Nigeria’s 1st Keke Rally with Bajaj Tricyles AVIATION 48 How Nigeria Loses N30bn Monthly due to Ban on International Flights 21 *Loses out on $311m African airline Star of the Industry bailout fund Engr. Emeka Okwuosa SPORTS Chief Executive Offi cer, Oilserv 53 Tokyo 2020 Olympics: Flame to be Limited Displayed in Public next Month aluechain recent- while other gas-related ly held its maiden companies are buying Vwebinar on zoom without subsidy. Though where technocrats from we couldn’t discuss this various fi elds of endeav- crucial matter during the our were invited to dis- webinar, we’ve decided to cuss issues surrounding make it our cover story for the economic and invest- the August edition where ment opportunities of the we tried to fi nd the rea- Ajaokuta-Kaduna-Kano sons for the imbalance in have reports on the pro- Gas pipeline which con- the gas pricing. jections made by some struction was flagged off Also in this edition, we notable international en- by President Muhammadu ergy institutions on what Buhari early July. oil demand will look like in The well-attended webi- few months to come. nar gave the panelists and As usual, we have re- the audience the oppor- Publisher/Editor-in-Chief ports from Aviation, Mo- tunity to discuss issues Musa Bashir Usman toring, Entertainment, Acting Editor Property, and Sports for of concerns related to the Benjamin Ike project and beyond. One your reading pleasure. Deputy Editor of the fallouts of the on- Fred Ojiegbe This and many more line event was a concern Contributors reports are packaged for raised by a participant on Gideon Osaka our esteemed readers in Ironhand S. Chukwuemeka this edition as we always the current disparity in Favour C. Nrabulu gas pricing in the country, Aisha Sambo believe that you deserve where US dollar is used as Graphic Consultant the best updates from this the denomination for gas Theresa Ogbonna unique Industry. exchange in the country. Business Dev. Executives Do have a fulfi lled time Adeniyi Onifade (South) Worst still is the ununiform Abdulkarim Sani (North) reading! price of the commodity to Circulation Manager buyers. Danlami Nasir Isah Where companies that Online Editor M.B. Usman Saidu Abubakar NB. Feel free to send in your views are into power generation and have your say @ Photo Editor [email protected] (Gencos) are buying the Bashir Bello Dollars gas at a subsidised rate, Legal Adviser Lamir Kasim Idris (Esq.) Head Offi ce: Abuja Liaison Offi ce: 1-2 Abu-Rayyan Street, New NDC Layout, Kaduna. SF 3, Rhema Mall, Ahmadu Bello Email: [email protected] Way, Opp. NAF Conference & Contact: 08032324370, 09071492222 Suites, Abuja. [email protected] @thevaluechainng.com thevaluechainng.com 4 Industry 08:20 Oil Demand Expected to Increase in 2022 –By Fred Ojiegbe lobal oil demand won’t re- Agency has become noticeably seeing demand down by 2 million turn to 2019 levels until at more bearish on demand, cutting barrels a day from the same peri- Gleast 2022 and the gap may its forecast for every quarter from od in 2019, compared with a drop be getting wider than it seemed a now to the end of 2021. It now of 3.6 million barrels a day fore- month ago, world major energy sees the world using 500,000 cast by the IEA. The IEA strikes a forecasters said. barrels a day less oil in the second contrasting note. Not only does All three of the world’s main oil half of 2020 than it did a month it see the impact of the pandem- forecasting agencies, the Inter- ago, while the downward revision ic on oil demand being less se- national Energy Agency, the U.S. for the two Northern Hemisphere vere than either of the other two Energy Information Administra- summer quarters next year is forecasters, it also sees it being tion and the Organization of Pe- about 400,000 barrels a day. For largely over before the end of next troleum Exporting Countries pub- 2021 as a whole, the IEA cut its year, with global oil demand in the lished new quarterly forecasts. demand forecast by 240,000 fourth quarter of 2021 down by They agreed that transport barrels a day, the first downward just 350,000 barrels a day from fuels are proving particularly vul- revision since April, when the full the same period two years earlier. nerable, with jet fuel and gasoline impact of the coronavirus on oil The U.S.-based agency was alone hardest hit during the depth of the demand first became apparent. in increasing its demand forecast pandemic and remaining so as “By December 2021, global oil for every quarter from now to the restrictions have been gradually consumption will still be 2 percent end of next year, compared with eased. With the Northern Hemi- lower than at the end of 2019,” the what it foresaw in July. Despite sphere summer holiday season Paris-based group said. The agen- the worsening demand outlook drawing toward its close at the cy placed the blame for the down- from two of the three agencies, beginning of September, time is grade firmly on transport fuels, the OPEC+ group of oil produc- said to be fast running out for the noting that “the aviation and road ing countries should still be able normal seasonal boost to both transport sectors, both essential to drain the excess oil invento- driving and flying. Commercial components of oil consumption, ries built up over the first half of flights are languishing 40 percent are continuing to struggle.” OPEC 2020 by the end of next year as below their peak January level, also made downward revisions to long as they all stick to the output according to data from Flightra- demand for all future periods, ex- promises they made to each oth- dar24. Long-haul flights have cept the first quarter of next year. er. Under the terms of that agree- been hit particularly hard; U.S. The producer group remains more ment, 20 countries agreed to cut ticket purchases for international pessimistic than the IEA about their combined crude production flights were down by 86 percent the recovery in demand over the by 9.7 million barrels a day from year on year in June, the most re- rest of this year, it sees consump- agreed baselines from May to cent month for which figures are tion down year on year by over 1 July, reducing the size of the cut available from the Airlines Report- million barrels a day more than to 7.7 million barrels a day for the ing Corporation. Comparing the the IEA does in the second half of rest of 2020 and then to 5.8 mil- latest outlooks with last month’s 2020. But it takes a more optimis- lion barrels during 2021 and the views, the International Energy tic view of the first half of 2021, first quarter of 2022. All three of the world’s main oil forecasting agen- cies, the International Energy Agency, the U.S. En- ergy Information Administration and the Organiza- tion of Petroleum Exporting Countries published new quarterly forecasts and none project oil demand back at 2019 levels by the end of next year. 5 Industry 08:20 COVID-19: How Oil and Gas Firms Lost N84bn Revenue –By Gideon Osaka from the oil marketing firms To- tal and Mobil. Over N56 billion of the revenue loss was between Mobil and Total. Seplat and Ar- dova lost just over N5 billion re- spectively. Further careful review of their results suggests the companies suffered from a drop in demand for refined products such as fuel, diesel, and lubricants. As it were, Nigerians were mostly on lockdown throughout April and May before reopening partially in June and July. How- ever, the damage had been done as adherence to safety proce- dures meant fewer people were evenues of some of the billion in the second quarter of commuting impacting heavily key oil and gas companies 2020 compared to N220.3 bil- on sales. Rin Nigeria as quoted on the lion in the corresponding quar- Seplat was also hit by dipping Nigerian Stock Exchange fell by ter of 2019. Revenue in Q1 was crude oil prices and weak de- about 38% in the second quarter N219 billion. The Nigerian econ- mand for its crude. Recall that of 2020. omy, particularly the oil and gas back in April, oil prices at some This translates to estimated sector has been hit hard by the point fell to negative territory as loss of N84.7 billion from their oil price crash and the COVID-19 demand waned globally.