Page 7 - AfrOil Week 32 2021

AfrOil COMMENTARY AfrOil
Financials show refining losses
Meanwhile, NNPC also provided its financial statements for the 13 months to February 2021, which showed that it made a loss in each of those months as refinery utilisation remained at 0%.
The losses fluctuated between NGN5bn and NGN10bn ($12mn and 24mn) per month to give a total loss of $253mn, with the firm high- lighting that it had continued to pay operating expenses for the inactive facilities.
NNPC has repeatedly said that its full 445,000 bpd capacity across four refineries was shut in to prepare for an overhaul, but this was only kicked off last month. In a press release, the company said: “The declining operational per- formance is attributable to ongoing revamping of the refineries, which is expected to further enhance capacity utilisation once completed.”
In mid-July, NNPC said that works on the Port Harcourt plant were in full swing, noting that the first refined products following the repairs are scheduled to be delivered by Sep- tember next year. The refinery will come back on stream in stages, with the full project not antic- ipated to be completed until late 2024, when it should reach 90% of its 210,000 bpd nameplate capacity. The works are being carried out by Italy’s Maire Tecnimont under a $1.5bn deal that will encompass three phases, with the first
phase to bring the unit back to 90% nameplate capacity within 18 months, the second to be completed within 24 months and the final stage within 44 months. Meanwhile, Sylva noted that the Cabinet has approved the award of contracts to upgrade the Warri and Kaduna refineries to Saipem and Saipem Contracting for $1.484bn.
The news may go some way to appeasing the host communities that this week urged NNPC to fix the former facility as quickly as possible. The Itsekiri host communities urged NNPC’s Warri Refining and Petrochemical Co. (WRPC) subsidiary to carry out an extensive clean-up of the four surrounding rivers. According to local media reports, they accused WRPC and Nige- ria Gas Co. (NGC) of having polluted the rivers since December 2019.
In June, NNPC’s Group Managing Direc- tor Mele Kyari said: “The Warri and Kaduna (refineries) will catch up with the Port Har- court process because we have learnt from the Port Harcourt mistakes we made. So we are hastening the process so that they can run con- currently. In the end, we will deliver all of them about the same time.”
He added: “Very soon, we will do the same [as at Port Harcourt] for Warri. Completion may be 40 months away, but production will start much earlier than that.” ™
By its own admission, NNPC has failed to carry out satisfactory turnaround maintenance on its own four refineries
INVESTMENT
BP and Kosmos complete sale and lease-back transaction for GTA FPSO
MAURITANIA/SENEGAL
BP (UK) and Kosmos Energy (US) have com- pleted the transaction for sale and lease-back of the floating production, storage and off-load- ing (FPSO) unit that will be installed at Grand Tortue/Ahmeyim (GTA), an offshore natural gas block that straddles the maritime border between Mauritania and Senegal.
Kosmos announced the successful com- pletion of the transaction in a statement dated August 9. It explained that the deal had allowed BP to sell the FPSO that is being built for the GTA project to one of its affiliates. In turn, the BP affiliate will then lease it back to its parent company, which is serving as operator of the GTA project, under a long-term agreement.
The terms of the transaction provide for BP to continue managing and supervising the construction of the FPSO by Technip Energies (France) at a facility in China. However, Tech- nip Energies is slated to deliver the vessel to the BP affiliate upon its completion and departure from the shipyard in the third quarter of 2022. BP’s lease agreement will then take effect once theFPSOisininternationalwaters.
GTA straddles the Mauritania-Senegal maritime border (Image: Kosmos Energy)
The deal also provides for Kosmos to trans- fer all remaining payments for the construction of the FPSO unit to the BP affiliate. At the same time, the US firm will “reimburse BP [in its capacity as] operator for its pro-rata share of cost under the lease agreement, which will be classi- fiedasanoperatingexpense,”thestatementsaid.
Week 32 11•August•2021 w w w . N E W S B A S E . c o m P7