Economy Health and Safety

OPEC cuts oil demand outlook

Written by Maritime First

…As Shell seeks stakeholders’ support to curb oil pipeline vandalism***

The Organisation of Petroleum Exporting Countries (OPEC) says it has cut its forecast for global oil demand growth and warned of potential further cuts as international trade disputes continue to fester.

OPEC said in its monthly report published on Thursday that world oil demand would rise by 1.14 million barrels per day (bpd) this year, 70,000 bpd less than previously expected.

“Throughout the first half of this year, ongoing global trade tensions have escalated,” OPEC said in the report.

It added that the potential for these disputes to affect global demand poses “significant downside risks”.

OPEC and its allies will meet in the coming weeks to decide whether to maintain supply curbs, with some having become alarmed by a steep slide in prices.

U.S. President Donald Trump has pressed for action to lower prices. Observers see the cut as building a case for prolonged supply restraint over the rest of 2019.

OPEC, Russia and other producers have, since Jan. 1, implemented a deal to cut output by 1.2 million bpd. They will meet over June 25 and June 26 or in early July to decide whether to extend the pact.

Despite the supply cut, oil has tumbled to $61 a barrel from April’s 2019 peak above $75, pressured by fears over the U.S.-China trade dispute and an economic slowdown.

Vienna-based OPEC also said its output fell in May as U.S. sanctions on Iran boosted the impact of the supply pact.

“Production by all 14 OPEC members dropped by 236,000 bpd to 29.88 million bpd,” OPEC said.

In addition to lowering its demand forecast, OPEC said that oil inventories in developed economies rose in April, suggesting a trend that could raise concern over the possible build up of an oil glut.

In a related development, Shell Nigeria has called for stakeholders’ concerted efforts to curb the incessant vandalism of crude oil-bearing pipelines, highlighting the danger of continuous sabotage to people and environment.

The General Manager, External Relations of Shell Petroleum Development Company (SPDC), Mr Igo Weli, spoke in Lagos on Thursday at a Media Workshop on “Pipelines Right of Way Encroachment and Vandalism”.

Weli said that such efforts to curb pipeline sabotage would save lives, secure communities and protect the environment.

“Shell is concerned about the repeated sabotage of recently repaired pipelines exposing the environment and people to renewed and worsening pollution.

“Oil theft is focused on short term fiscal benefits, ignoring the long-term effects of environmental degradation,” he said.

The Shell spokesman said: “Since 2017, sabotage spill rate has risen steeply and crude oil theft from SPDC JV’s pipeline network averaged 11, 000 barrels per day in 2018, an increase of about 20 per cent over previous year.

“The number of sabotage-related spills increased in 2018 to 111 compared to 62 in 2017 and, since 2012, SPDC has removed more than 1,160 illegal theft points.”

Towards the UNEP Report-guided Ogoni Clean Up, Weli said: “SPDC actively supports the clean-up process along with other stakeholders.

“SPDC remains fully committed to providing its share of 900 million dollars (N283.73 billion) over five years to the Ogoni Trust Fund as stipulated in the Hydrocarbon Pollution Remediation Project (HYPREP) gazette and the agreed governance framework.

“The SPDC JV has completed its first-year contribution of 180 million dollars (N54.54 billion).

“Early 2017, the SPDC JV made available 10 million dollars to help set up HYPREP office and in July 2018, joint venture deposited additional 170 million dollars (N51.52 billion) into an escrow account to fund HYPREP’s activities,” the general manager said.

According to him, the company said it is also collaborating with communities to effectively patrol pipelines’ rights-of-way through direct surveillance and GMoU surveillance.

“We are proactively engaging government security agencies to prevent crude theft and vandalism, and carrying out awareness campaigns to educate community members.

“Also, we are educating surveillance contractors and general public of the requirements of the 1990 Pipeline Act which prohibits any third-party activities 100ft from existing oil and gas right-of-way,”  Weli added.

Also, Shell’s General Manager, Safety and Environment, Mrs Chidube Nnene-Anochie, said irrespective of the cause, SPDC cleans and remediates areas impacted by spills from its facilities.

According to Nnene-Anochie, SPDC implements work programmes to appraise condition of, maintain and replace key sections of pipelines and flowlines.

“In 2018, for example, we installed 70km of pipelines and 188km of flowlines. Over the last seven years, SPDC has replaced approximately 1,300 kilometres distance of flow lines and pipelines.

“In line with industry regulations, SPDC only pays compensation if the spill is operational,” she said.

 

 

 

 

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