Fire incident probe: Warri Refineries MD seeks new date •Says Senate invitation coincides with daughter’s wedding

THE Managing Director of Warri Refineries and Petrochemical Company, Chief Paul Obelley, failed to appear before the Senate, on Thursday.

His failure to honour an invitation extended to him by the upper legislative chamber was to enable him to attend his daughter’s wedding, taking place this weekend in Agbor, Delta State. The Senate Committee on Petroleum Resources (Downstream) had summoned Obelley, along with top management of the refinery to appear before it on Thursday. They were expected to explain the circumstances surrounding the fire incident that occured at the refinery on October 22. However, Obelley, in a letter signed by the Group Executive Director, Refinery and Petrochemicals, Mr Tony Oguigbe, said he would not be able to attend the meeting, as he wanted to attend his daughter’s wedding. “I would like to request your kind consideration to give us another date to enable me to attend and participate in my daughter’s wedding taking place on November 1 and 2 at Agbor and Asaba respectively. “We sincerely regret any inconvenience this may cause your esteemed committee and I kindly request that you re-schedule for another day,” the letter read. The Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), Mr Andrew Yakubu, also failed to honour the Senate invitation. The NNPC boss, in a letter to the committee, asked for time to collate his information on petroleum products and the NNPC crude oil swap arrangement. The letter was signed by the NNPC Group General Manager of the National Assembly Liasion Office. Chairman of the Senate committee, Senator Magnus Abe, agreed that the NNPC GMD and his team needed more time to be able to collate the document on the issue. He, however, said they should able to get it done within the next one week and, unfailingly, report to the committee in two weeks’ time. He also warned that they should not fail to honour the next invitation, noting that the cooperation of all agencies working with his committee was needed to safeguard the interest of all Nigerians.

Good news for drivers: Gas prices near 2013 lows

Retail gas prices have dropped at the fastest rate in nearly a year to the lowest national average since January. The national average for regular gasoline was $3.40 per gallon on Monday, a nearly 20-cent per gallon decline in just the past month. AAA says the national average could drop another 25 to 30 cents per gallon through December. Gas prices in many Southern states are already below $3.25 a gallon and some South Carolina residents paying less than $3 a gallon at the pump. "Most drivers are paying the lowest gas prices in more than eight months due to abundant gasoline supplies, the end of the summer driving season, lower oil costs and the switchover to winter-blend gasoline," said AAA spokesman Avery Ash. "Supply and demand is working in most consumers' favor with consumption down and gasoline stocks more than 10 percent higher than a year ago." Retail gasoline prices are following the slide in gasoline futures, which has outpaced the fall in oil prices in September. RBOB gasoline futures plunged 9 percent this month compared to a 5 percent drop in West Texas Intermediate crude futures. On Monday, RBOB gasoline futures were the biggest decliner in the energy market once again, falling nearly 2 percent to a session low of $2.62 per gallon, while WTI oil prices were down 1 percent, hitting a session low of $101.50. Prices for gasoline on the New York Mercantile Exchange have fallen roughly 11 percent in September as supplies reached their highest level in three years and the peak summer driving season ended, noted Dave Lutz, head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore. "The availability of inexpensive oil has enabled refineries to increase their production of gasoline at a rate that has exceeded demand," Lutz commented in a market note. "This drop in gasoline prices should be a tailwind for US consumers toward years end."

Gasoline, diesel get pricier, natural gas unchanged

The Industry and Commerce Ministry posted overall increases in fuel prices for the week from August 24 to 30, except natural gas, which remains unchanged. Premium gasoline will cost RD$264.40, or RD$ 2.30 higher per gallon; regular will cost RD$246.60, or RD$ 2.40 more; premium diesel will cost RD$218.60 and regular RD$ 211.90, or RD$2.20 more per gallon on both. Avtur will cost RD$158.12, or RD$2.87 more; kerosene will cost RD$195.50, a RD$2.00 increase, while fuel oil will cost RD$142.60, or RD$2.80 more per gallon. Propane gas will cost RD$103.00 per gallon, an increase of RD$2.22, whereas natural gas remains unchanged RD$30.50 per cubic meter. The Central Bank’s average posted exchange rate of RD$42.44 per dollar was used to calculate fuel prices.

Oil and gas sector 'needs 120,000 new employees'

Baby boomers have been accused of stealing their children’s future, attaining their wealth at the next generation’s expense and leaving young people entering the world of work facing bleak prospects. Another is the Offshore Europe event running from September 3 to 6 in Aberdeen. This biennial conference discusses issues the industry faces but also offers those thinking about a career in the sector a chance to meet with future employers. One recent entrant to the industry is Mark Mallin, who spent four years as an engineering technician on Royal Navy submarines. He joined engineering group XPD8 Solutions in Aberdeen – the capital of the UK oil and gas industry – and sees the job as a career for life after leaving the military. “This is probably the one place that hasn’t been affected by the credit crunch and the lack of jobs,” says the 24-year-old. “The amount of jobs up here; it’s scary to be honest. If you go on to one of the careers websites there are literally hundreds if not a couple of thousand jobs every day. “There will always be a need for energy. In terms of pay you’ll be lucky to get anywhere near as much money as here. I don’t want to say it’s all about the money because it’s about the potential you have – you can really set up your life by working here.” Mr Mallin left the Navy without a degree and was surprised by the work available compared with his native Sunderland but admits he initially had trouble getting his foot in the door. “I thought with my experience in the Navy I’d have no trouble but it took nine or 10 months,” he says, adding that he was taken on because an employer who had been in the merchant Navy recognised his potential. “Companies ask for an experienced guy but a lot of the experienced guys are retiring or coming onshore to work so they need to widen it up a bit. They have got to think outside the box.” As a result Mr Mallin recommends potential recruits do all they can to make themselves stand out from the crowd. One way is to obtain the basic offshore safety and survival training (BOSIET) certification – the course that teaches a basic knowledge of safety issues for offshore installations and how to deal with events such as helicopter emergencies. “The course lasts three days and costs about £800, which is a lot for someone coming out of university but it’s good for four years and will give you a good foot in the door and see what the industry is about,” says Mr Mallin. “Companies will also see you are really interested and it’s another check in the book.” Those still in education but considering a career in the industry would do well to listen to the advice of Lyle Andrews, BP’s head of graduate recruitment, although he admits oil and gas as a sector might have had problems in the past. “The industry has been poor in talking about what we do and why it is exciting,” he says. “The reality is that some of the other industries are desperate for good STEM talent. They are very aggressively targeting these people and the reality is that they are selling them something in a lot of ways that is not as interesting a prospect as we have to offer.” While banking or consultancy might seem attractive, Mr Andrews warns that the reality is “sitting in front of a spreadsheet doing financial modelling”. BP, he adds, means “working with really exciting kit doing stuff that is important for the world as well as being at the cutting edge of technology”. The industry is now communicating this to students and as a result is luring what Mr Andrews terms “top tier” graduates. “We show people that it brings them back to the reason they decided to study science or engineering.” He encourages those still in education to get as much industry experience as they can while studying – BP runs internships and “Discovery Days”, offering a chance to learn about the sector, as well sending staff to campuses to talk to students. He adds that the responsibility quickly given to employees working with equipment worth tens of millions and the chance to advance rapidly also attracts those with adventurous personalities to the sector. Dominic Simpson, head of sales at rigzone.com, agrees. “What attracts people is the very steep learning curve and taking on some real responsibility. That’s the element that excites people. “They can very quickly be involved in some of the biggest projects in the world working in some very remote locations on exciting developments.” The industry isn’t without risk as the recent fatal helicopter crash in the North Sea and the Deepwater Horizon disaster in the Gulf of Mexico show. But it’s not without excitement, says Mr Andrews. “It’s natural for more adventurous sorts to be attracted without any intervention from us to seek out a career [in the sector].” Mr Simpson agrees that those seeking a job out-of-the-ordinary would do well to look at oil and gas. “Ex-military personnel are in high demand, partly because they are adventurous but also because they are well-trained, safety conscious, disciplined and very dependable.” He adds that there are specialised courses available to turn those who have left the Armed Forces into attractive recruits for the sector. Starting salaries are £35,000 to £40,000, according to Mr Simpson. In fact, he sees such a long-term future for the industry that he’s intent on making it a family business. “There are tens of thousands of jobs in oil and gas worldwide and with fracking development in this country potentially many more,” he says. “I tell my 10-year-old to get an engineering degree so he can get into the business.”

Major Surge Is Unlikely for Prices of U.S. Gas

But energy experts say that a major jump is unlikely for the 29.2 million Americans whom AAA expects to travel 50 miles or more on the road this weekend — up from 28 million last year — despite the summer of unrest across the Middle East and North Africa. In fact, Americans will pay considerably less for gasoline than they did last Labor Day weekend, when refinery shutdowns and Hurricane Isaac, which hit the coast of the Gulf of Mexico, heightened fears of gasoline shortages. “Gasoline prices are going to be surprisingly temperate,” said Tom Kloza, chief oil analyst at GasBuddy.com. “In California drivers will be spending 30 to 40 cents less than last Labor Day weekend for a gallon of regular and much of the rest of the country will be between 5 and 15 cents lower than last year.” According to the AAA daily fuel gauge report, the national average price of a gallon of regular gasoline on Friday was just over $3.58, still only 5 cents higher than a week ago and 4 cents cheaper than a month ago. Gasoline prices are just beginning to catch up with the rise in global crude oil prices, which had climbed roughly $6 a barrel in just a few days as the United States and allies prepared to attack Syria in retaliation for what they suspect was a government chemical weapons attack on Syrian civilians. Oil prices retreated by about $2 a barrel on Thursday and slumped a bit more on Friday. Experts said prices could easily jump back up after an expected attack on Syria. Oil experts say gasoline prices could rise as much as 10 cents a gallon over the next week or two, as higher oil prices gradually push up wholesale and retail prices. But few expect a big, lasting jump unless there is a major expansion of conflict across the Middle East that seriously threatens oil production and shipments. The Energy Information Administration projects that the national average price for a regular gallon of gasoline will be $3.59 during the third quarter and $3.52 for the entire year, 11 cents below the average 2012 price. It expects an even lower 2014 annual price of $3.37 a gallon. “Gas prices are probably going to be spiking over the next few days,” said Michael Green, a spokesman for AAA. But he added: “It’s not horrendous. We’re looking at the lowest Labor Day gas prices since 2010.” One reason, according to a report by the Energy Department on Wednesday, is a surprise weekly jump of three million barrels in national oil inventories. The report also showed a much lower-than-expected drop in inventories of gasoline, which remained particularly well supplied on the heavily populated East Coast. Several East Coast refineries that curtailed operations last week for unplanned maintenance are expected to be back up in the next few days, which should further increase supplies. Summer driving normally tapers off after the Labor Day weekend, and that should help keep a lid on prices. Demand for gasoline should drop by about 15 million gallons a day in September from August levels, according to government statistics. Most important, the country is better prepared for any shocks if the instability in the Middle East and North Africa escalates much further. United States gasoline inventories are up nearly 10 percent from a year ago, while demand is up by only about 1 percent. Mostly because of a frenzy of shale drilling and expansion of oil sands production, the United States and Canada are producing two million barrels of oil a day more than when the turmoil in the Middle East and North Africa broke out two years ago. That, along with the decline in consumption since 2007, has meant that the Strategic Petroleum Reserve and other inventories now have the capacity to replace about nine months of imports, about 40 percent more than only five years ago.

Europe Raids 3 Companies in an Inquiry on Oil Prices

In what the commission termed ‘'unannounced inspections,'’ investigators descended on some European offices of BP, Royal Dutch Shell and Platts, a division of the McGraw-Hill Companies that specializes in providing pricing for the oil industry. The European authorities are looking into whether the companies may have ‘'colluded in reporting distorted prices'’ in an effort ‘'to manipulate the published prices of a number of oil and biofuel products.'’

All of the companies said they were cooperating with the inquiry.

Shell said it was “assisting the European Commission in an inquiry into trading activities.” A spokesman said that the company’s offices in Rotterdam and London were “visited.”

Platts said that the European Commission had “undertaken a review” at its offices, at Canary Wharf in London. The authorities also raided BP’s oil trading operations on the lower floors of the same building. BP said in a statement that the company was “subject to an investigation.”

Regulators in Europe and the United States have long been worried about the system by which oil and gas prices are set, which can affect the prices consumers pay as well as costs for airline and trucking companies. The concerns reached a frenzied pitch in 2008 when oil prices hit record highs and then quickly plunged. At the time, lawmakers in the United States and elsewhere questioned whether the prices were being distorted.

The authorities are focused in part on the price reporting system for oil and other petroleum products, which is dominated by a small group of companies like Platts. Such companies determine prices by polling traders and using other industry data.

In recent years, Platts has instituted a so-called electronic window through which a significant amount of oil is traded. At the end of each day, Platts determines prices based on the trades that go through this system, rather than by simply relying on polling companies.

There are concerns in the industry that companies could distort the prices through a blizzard of last-minute trades. “If you want access to liquidity you are forced to use the window,” said a senior oil trader. But he also said that the window, in theory, should be more accurate than prices determined just by polling traders because the prices were determined by actual trades.

The benchmarks, notably Brent crude, are enormously influential. Much of the world’s oil, particularly outside the United States, is priced in relation to Brent, which is made up of a basket of North Sea crudes. These benchmarks are also often used in the large derivatives markets.

As production in the North Sea has dwindled, the Brent price has been based on lower volumes of oil, prompting fears that it could be manipulated, possibly by major players in the region. The Brent price is determined through assessing prices of a blend of four North Sea crudes.

In recent years, various regulatory agencies have investigated price setting but seem to have come up with little evidence of manipulation. People in the industry say, however, that the controversy around oil and gas prices has made companies increasingly reluctant to supply prices for fear of becoming the targets of regulators or lawsuits.

In 2010, the Group of 20 economically most developed nations asked the International Organization of Securities Commissions to look into the potential for manipulation and whether tighter regulation was needed. After a two-year investigation, the price reporting agencies last fall agreed to adopt a series of principles to deal with conflicts of interests and other issues.

An 18-month trial period is under way. Compliance is to be monitored by an independent auditor. If the companies don’t go along, regulators may bar them from providing pricing benchmarks to exchanges, which is a source of revenue.
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Gas Raises Consumer Prices, but Inflation Remains Tame

The Labor Department reported on Tuesday that its Consumer Price Index increased 0.5 percent in June from May. Two-thirds of the gain came from a 6.3 percent jump in gas prices, the largest since February.

Excluding volatile food and energy costs, so-called core prices rose just 0.2 percent.

Consumer prices have been stable this year, giving the Federal Reserve room to continue efforts to stimulate the economy.

Over all, prices rose just 1.8 percent in the last 12 months. And core prices rose just 1.6 percent in that period — the smallest 12-month change in two years. Each measure was below 2 percent, the Fed’s inflation target.

Slow economic growth and high unemployment have kept wages from rising quickly. That has made it harder for retailers and other businesses to increase prices.

In June, prices for all energy products rose 3.4 percent, mostly because of the surge in gas costs. Other prices changed little.

The gas price surge was caused by a jump in global oil prices, which was influenced by the political turmoil in Egypt. Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, predicted prices at the pump would fall once conditions stabilized in Egypt.

Food prices edged up 0.2 percent. New-car prices increased 0.3 percent but were up just 1.3 percent over the last year. Clothing prices rose 0.9 percent in June but were up just 0.8 percent over the last 12 months. Prices for used cars fell 0.4 percent and were down 2.3 percent over the last year.

The Federal Reserve reported on Tuesday that manufacturing production rose 0.3 percent in June from May, as factories made more business equipment, home electronics and cars. That followed a 0.2 percent gain in May. Still, the two consecutive gains barely offset declines in March and April.

Overall industrial production, which includes factories, mines and utilities, also rose 0.3 percent in June. Mining output increased 0.8 percent and utility output slid 0.1 percent.

Manufacturing is the most critical component of industrial production. The recent gains are a hopeful sign that factories could help the economy grow in the second half of the year.

The “report confirms the picture of a moderate recovery in the manufacturing sector,” Annalisa Piazza, senior economist at Newedge Strategy, wrote in a research note.

Manufacturers have struggled this year, providing little support to the economy. Their output was up just 1.8 percent in the last 12 months. And factories cut jobs in each of the last four months, shedding 24,000 since February.

Slower global growth has cut demand for American exports. Europe is still in a recession and China’s economy grew from April through June at the slowest pace in more than two decades.

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