…As Oil on track for weekly gains on trade talk hopes, OPEC-led supply cuts***
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru on Thursday in Abuja stressed that non-compliance to regulations by operators in the oil and gas sector was seriously hindering industry growth.
Baru stated this at the 2018 annual stakeholders meeting of the Department of Petroleum Resources (DPR), while speaking on the theme “Regulatory Compliance as a veritable tool for safe and efficient operations in Nigeria’s oil and gas Industry”.
“Challenges for the industry of this size would always be in getting all operators to fully comply with regulations.
“Compliance with regulations, we would say, is the biggest challenge in the industry today; just for people to do the right things according to various laws and regulations we have in the industry”, Baru who was represented by Mr Henry Ikem-Obih, the Chief Operating Officer, Downstream of the NNPC stated.
He maintained that compliance with regulations would eliminate crisis in the industry and guarantee long-term viability of the industry, pointing out that if everyone plays his part in achieving and sustaining compliance, there will be a pain-free experience for the consumers.
He added that operators as well would remain in long-term viable businesses.
He further urged the DPR to ensure effective enforcement to achieve total compliance in the sector for growth and development.
Mr Joseph Akinlaja, the Chairman, House Committee on Petroleum Downstream, commended the effort of the DPR in ensuring effective compliance with regulations in the sector.
Akinlaja He added that the enforcement of online registration by operators was a step in the right direction.
He urged the regulator to include tanker owners and drivers to be part of the stakeholders meeting, to enable them to understand the need for compliance to regulations for the good of all.
He further said that the National Assembly would soon conclude work on the Petroleum Industry Bill.
In his remark, Alhaji Salisu Abdulrahman, the Chairman, Independent Petroleum Marketers Association of Nigeria (IPMAN), Suleja Depot, also commended the DPR for the innovations to ensure that operators complied with regulations.
Abdulrahman urged the regulator to also see how best to ensure that marketers got their bridging claims at the right time.
He gave an assurance that marketers would continue to support any move that would bring about growth and development in the sector.
Meanwhile, Oil prices were on track for solid weekly gains on Friday after financial markets were lifted by hopes the United States and China may soon resolve their trade disputes, and as OPEC-led crude output cuts started to tighten supply.
Despite this, markets were held in check by expectations of an economic slowdown in 2019.
International Brent crude futures LCOc1 were at $61.59 per barrel at 0555 GMT, down 9 cents, or 0.15 per cent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were 4 cents below their last settlement, at $52.55 per barrel.
Brent and WTI are set for their second week of gains, rising nearly 8 per cent and 10 per cent respectively.
Markets were being supported by hopes that the trade war between Washington and Beijing may be resolved soon after officials said three-day talks this week concluded constructively and that further negotiations would likely follow this month.
Lower oil exports from Iran since last November, when U.S. sanctions against it resumed, have also supported crude.
Despite this, concerns over the health of the global economy lingered on, with signs mounting that China’s growth in 2018 and 2019 would be the lowest since 1990.
“If we experience an economic slowdown, crude will under-perform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.
Most analysts have downgraded their global economic growth forecasts below 3 per cent for 2019, with some even fearing a looming recession amid trade disputes and spiraling debt.
On the supply side, oil markets are receiving support from supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at reining in a glut that emerged in the second half of 2018.
A key reason for the emerging glut was the United States where crude oil production C-OUT-T-EIA soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd.
Consultancy JBC Energy this week said it was likely that U.S. crude oil production was already “significantly above 12 million bpd” by January 2019.
Given the overall supply and demand balance, Swiss bank Julius Baer said it was “price neutral” in its oil forecast.
“We see the oil market as well balanced into the foreseeable future, as the petrol-nations make space for further U.S. shale production growth,” said Norbert Ruecker, head of commodity research at the bank.