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OPEC insists on total compliance with oil production cuts

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The Organisation of Petroleum Exporting Countries (OPEC) and its allied oil producers, known as OPEC+, yesterday insisted that defaulting countries, including Nigeria, must adhere to total compliance with the oil production output cuts agreement in April.

This is coming as the Nigerian National Petroleum Corporation (NNPC) yesterday kicked against a swift relocation of tank farms from their current locations along Ijegun, Kirikiri areas in Lagos and other parts of the country, saying that it will cause a dislocation in the supply and distribution chain of petroleum products across the country.

The corporation said the country should achieve the full rehabilitation of the refineries and the completion of the Dangote Refinery to enable the country exit fuel importation before their relocation.

OPEC also expressed optimism that market conditions are gradually improving but noted that all participating countries must renew their commitment to ensuring stability in the international oil market.

However, contrary to earlier speculations that the cartel will make pronouncements on the next phase of easing of output cuts to about 7.7 million barrels per day, the OPEC failed to make that announcement but scheduled the next meeting for August.

According to the original agreement from April, OPEC+ was to cut 9.7 million bpd in combined production for two months—May and June—and then ease these to 7.7 million bpd, to stay in effect until the end of the year.

Then, from January 2021, the production cuts would be further eased to 5.8 million bpd, to remain in effect until end-April 2022.

But at its 20th Meeting of the Joint Ministerial Monitoring Committee (JMMC), which took place via video conference yesterday, under the chairmanship of Prince Abdul Aziz Bin Salman, assisted by his Russian counterpart, the committee said it reviewed the monthly report prepared by its Joint Technical Committee (JTC).

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A statement after the meeting noted that the committee also considered market prospects for the second half of 2020 and reiterated the importance of the ‘Declaration of Cooperation’ (DoC) in supporting oil market stability.

“The outcomes of the June meetings extended the first phase of the production adjustments until 31 July 2020; provided a compensation mechanism in respect of the months July, August and September for participating countries that were not able to achieve full conformity in May and June.

“The committee reviewed and reaffirmed the commitment of all participating countries to achieve full conformity and make up for any shortfall under compensation plans presented to the committee.

“It stressed that achieving 100 per cent conformity from all participating countries is not only fair but vital for the ongoing rebalancing efforts and to help deliver long term oil market stability,” the cartel said.

After a review of the crude oil production data for the month of June 2020, OPEC said it welcomed the significant performance in the overall conformity level for participating countries at 107 per cent in June 2020, an achievement that found wide recognition in the market.

It reiterated its appreciation of additional voluntary contributions made by Saudi Arabia, the United Arab Emirates and Kuwait in June.

It noted that removing the credit for over-conformity results in a conformity level of 95 per cent in June, the highest since the inception of the DoC in January 2017, and mandated its secretariat to closely monitor and report to the JMMC the implementation of the required compensation by the underperforming participating countries.

“It also requested underperforming participating countries to submit their plan for implementation of the required compensation for the month June 2020 to the OPEC Secretariat by the end of July 2020,” the statement added.

OPEC said it welcomed the participation of Angola, Gabon, South Sudan and Congo, and noted that they had reiterated their commitment to the DoC production adjustments and compensation plans.

“The committee observed that there were encouraging signs of improvement as economies around the world open up. While there could be localised or partial lockdowns re-imposed in some places, the recovery signs are clear, both in physical and futures markets.
“Moving to the next phase of the agreement, the extra supply resulting from the scheduled easing of the production adjustment will be consumed as demand recovers,” the organisation stated.

It projected that there will be an increase in demand for utilities, as well as changes in travel patterns, boosting domestic demand for gasoline and diesel, explaining that as a result, the impact on participating countries’ exports will be limited.

“In addition, the compensation schedule that has been agreed will mean that the effective level of adjustments will be deeper,” it said.

The collective OPEC+ cut in August and September would be some 8.54 million bpd in the next two months, as Iraq, Nigeria, Angola, Russia, and Kazakhstan are expected to cut output to compensate for the previous lack of compliance, while Saudi Arabia is also expected to keep its August oil exports at the same level as in July.

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NNPC Gives Conditions for Relocation of Lagos Tank Farms

Meanwhile, the NNPC has kicked against a swift relocation of tank farms from their current locations along Ijegun, Kirikiri areas in Lagos and other parts of the country in order to avoid dislocation in the supply and distribution chain of petroleum products nationwide.

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The corporation made the submission at a hearing by the House of Representatives’ Ad-hoc Committee on the relocation of tank farms in residential areas of Ijegun, Kirikiri.

A statement by the NNPC’s Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, quoted the Managing Director of the corporation, Mr Mele Kyari, as saying that NNPC is not averse to the relocation of the tank farms and depots sited in residential areas.

But he said the corporation would rather that some time be allowed to achieve the full rehabilitation of the refineries and the completion of the Dangote refinery to enable the nation to exit fuel importation before their relocation.

The GMD who was represented by the corporation’s Chief Financial Officer, Mr Umar Ajiya, told the committee that the tank farms and depots were a major artery for receiving and distributing imported petroleum products to all parts of the country.

He added that their abrupt relocation would trigger a crisis not only in the downstream sector but also in the nation’s economy in general.

“We are not opposed to the yearnings of the communities or the relocation of the tank farms and depots, but we want it to be done in phases because of the huge financial commitments by the stakeholders.

“If they are relocated abruptly, even the banking sector would be affected because of the loans they granted for the establishment of the depots,” he stated.

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Troops raid pirates, militants camp, kill six in Bayelsa

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The Defence Headquarters says the troops of Operation DELTA SAFE, on Tuesday, in Bayelsa, raided the Pirates/Militants’ camp and Kidnappers’ hideouts, eliminating six criminals.

The Coordinator, Defence Media Operations, Maj.-Gen. John Enenche disclosed this in a statement on Wednesday in Abuja.

Enenche said the troops, acting on credible intelligence, monitored movements of a suspected pirate/sea gang leader, who had sneaked into town from Port Harcourt, in the company of another known notorious kidnapper.

He explained that the troops thereafter raided the pirates’ camp at Tukugbene-Ayama Ijaw Local Government Area, to arrest both suspects and their gang members.

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According to him, upon arrival at the personal jetty of the suspect, troops met heavy resistance from harassing gunfire from pirates/militants in five boats that approached from adjoining creek.

“But the overwhelming firepower of our troops led to the forceful withdrawal of the pirates/militants, with various degrees of gunshot wounds.

“The gallant troops sustained the firefight until five of the pirates/militants were neutralized ashore.

“Furthermore, three of the attacking boats were sunk while the occupants with various degrees of gunshot wounds escaped into the river.

“In the process, troops recovered three boats from the pirates.

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“Additionally, our troops took over the jetty and advanced to the objective area which was empty,” he said.

Enenche said that the troops cordon off the area and conducted a search of the building where the suspects were believed to be residing and thereafter cleared the building.

He disclosed that the troops recovered three AK47 rifles with a magazine, two 200 HP Yamaha outbound engines, and three 115HP Yamaha outbound engines during the operation.

The coordinator further disclosed that troops also raided an identified hideout belonging to a notorious criminal/kidnapper and oil thief along Mbiama East-West road.

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According to him, during the operation, the troops arrested the kingpin while attempting to escape and recovered items which include a locally made pistol and cartridges.

“(The suspect) is reported to be a close ally to a notorious criminal known as VIP suspected to be one of the masterminds of the killing of 5 Battalion Soldiers around East-West road.

“The Military High Command congratulates the gallant troops for their dexterity and encourages them to remain resolute in curtailing the activities of pirates/militants in the Niger Delta region of the country,” he said.

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I’ll invoke no work, no pay rule if… Fayemi to striking doctors

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Kayode Fayemi

Ekiti State Governor, Dr Kayode Fayemi, has appealed to doctors under the aegis of National Association of Government General Medical and Dental Practitioners (NAGGMDP) to suspend their ongoing strike to prevent being forced to invoke the no work, no pay rule of the Trade Dispute Act.

The doctors had on June 30 withdrawn their services, after exhausting 28 days ultimatum issued to the government, in protest against alleged wage disparity, unpaid backlog of allowances, among other matters.

Fayemi gave the appeal on Wednesday in Ado-Ekiti, the state capital during a statewide broadcast transmitted by all broadcasting stations domiciled in the state.

The governor called on the striking doctors to suspend their action in the interest of poor citizens who could not afford to seek treatment in private hospitals, noting that while arrears of unpaid allowances can be collected, a life lost cannot be reversed.

“We can always collect arrears of unpaid allowances, but a life lost cannot be reversed. That is why I should like to call on the doctors to take the patriotic route like other health workers and the organised labour for an immediate end to the needless strike.

“I do not want to be put in a situation where I have to invoke the no work, no pay in Ekiti,” he warned.

Fayemi said he felt more worried that workers, who got promoted five years ago have not enjoyed financial benefits of such elevation, saying it wasn’t his style and intention to deprive people of their legitimate entitlements.

“I am pained in my heart that people who got promoted since about five years ago have not enjoyed the corresponding financial benefits. These are things which give me great pain and which I am absolutely committed to assuaging their feelings.”

Fayemi explained that the government was unable to pay workers’ accumulated benefits due to drastic reduction in the federal allocation.

“Ekiti had consistently received from the Federation Account, an average N3billion in the last six months with a monthly wage bill of N2.8bilion.

“Apart from the fact that our monthly received federal allocation has dropped considerably because of low crude prices and off take, our internally generated revenue has gone worse as many businesses that should pay taxes are themselves under different government supports to stay afloat.”

He, however, commended the leadership of the Joint Associations and Unions of Ekiti State HealthCare Workers and organised labour for suspending their industrial actions, assuring that all demands of workers are being looked into in line with what state resources can accommodate.

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Nigerian sworn in as Superior Court Judge in America

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Edirin Okoloko

Edirin Okoloko, a Nigerian, has made history with his proud representation of the country on the international scene.

Okoloko from Delta state was sworn in as a judge of the Snohomish County Superior Court in Washington DC, USA.

He’s taking over from Judge George Bowden who retired recently. According to reports, the newly sworn-in Judge bagged his law degree from the University of Benin, Nigeria.

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He also got another degree in law from the Seattle University School of Law. Okoloko worked for 13 years a deputy prosecuting attorney in the county.

Before working as a prosecutor, the Nigerian was a judicial law clerk for a former Snohomish County, judge named Michael Downes.

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