Page 14 - AfrOil Week 22a 2020

AfrOil PERFORMANCE AfrOil
Even so, he said, NNPC is taking steps to bring production costs down. The company has already racked up some successes by working to “negotiate with its partners to cut down on con- tracts’ life cycle, selecting the right projects [and] engaging the right institutions to bring down the cost,” he stated.
Kyari continued: “Our ultimate target we have set for ourselves is to bring the cost down to at most $10 per barrel. This will come at a cost and huge challenges ... But I can assure you [that] at any cost, we will take steps to bring this cost down so that our country will benefit and the oil industry will become a profitable business for the 200mn Nigerians.”
NNPC expects to run into some obstacles, he said, because there are certain businesses and institutions in the country that benefit directly from high production costs. He did not name any culprits but said that his company was
determined to make sure that expenses were not inflated. “With such people, the meaning is that we are paying about three times more than what we should,” he remarked..™
NNPC head Mele Kyari (Photo: File)
South Africa rations diesel amid quick demand recovery
SOUTH AFRICA
SOUTH Africa has begun rationing diesel after demand recovered more quickly that had been expected after the country eased its COVID-19 lockdown.
Amid the lockdown, which began on May 27, South Africa idled more than half its refining capacity. Rules started to be eased this month, with some industries allowed to reopen.
“The opening of the economy has resulted in a more rapid recovery than expected,” the South African Petroleum Industry Associ- ation (SAPIA) said in a statement on May 26. “Stock rationing has been implemented to manage demand and to preserve supplies, and is expected to continue to the end of May.”
South Africa’s diesel stockpiles are running low, its Department of Mineral Resources and Energy told Bloomberg on May 27. There are no shortages of gasoline, however, according to SAPIA.
South Afrcia has six refineries but only two – the Secunda and PetroSA plants in Mossel Bay – are currently online.
The Engen Durban refinery, the country’s largest and operated by BP and Royal Dutch Shell, was closed on March 27 “due to forecast lower demand for petroleum products during the national lockdown.”
Engen and the Sapref refinery “are currently starting up with on spec production expected by this weekend,” SAPIA said.
The Natref refinery in Sasolburg was closed down by South Africa’s Sasol on April 9 and “is expected to be back online mid-June.” Cape
Town’s Astron Energy refinery is “on a planned maintenance shutdown and expected back online in July.”
DA shadow minister for minerals and energy Kevin Mileham has warned that diesel shortages could go on for much longer than mid-June. He said the country’s strategic fuel reserves were not sufficient, owing to mismanagement and unclear policies.
“Given the lengthy lead time to procure, ship, offload and distribute fuel stock, it makes sense to hold sufficient reserves in the country to off- set any potential supply chain interruptions,” he said. ™
Fuel demand has recovered faster than anticipated (Photo: Shell South Africa)
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w w w . N E W S B A S E . c o m Week 22 03•June•2020