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Crude Export Earnings Fell by N153.5bn in May



Crude oil

The country’s earnings from crude oil export have continued to fall, as latest data from the Central Bank of Nigeria showed that the volume of crude export dropped by 10.23 million barrels in the month of May.

At the official exchange rate of N315.5 to a dollar, and an average of $47.59 per barrel of crude during the review period, Nigeria’s earnings from the export of the commodity dropped by N153.5bn in May.

The country’s crude oil export opened at 1.45 million barrels per day or 44.95 million barrels in the month of January, but it recorded declines in the preceding months and reduced to 0.9 million bpd or 27.9 million barrels in May.

In April, Nigeria’s crude export stood at 1.23 million bpd, but this dropped by 330,000 bpd in May.

According to the CBN, the drop in oil export was largely due to destruction of oil and natural gas infrastructure in the Niger Delta by militants.

The apex bank, in its report for May 2016, said, “Nigeria’s crude oil production, including condensates and natural gas liquids, stood at an average of 1.35 million barrels per day or 41.85 million barrels in the review month. This represented a decline of 0.33 million bpd or 19.6 per cent below the average of 1.68 million bpd or 52.08 million barrels recorded in the preceding month.

“Crude oil export stood at 0.90 million bpd or 27.90 million barrels, which represented a decrease of 26.83 per cent, compared with 1.23 million bpd or 38.13 million barrels recorded in the preceding month. The development in crude oil production was attributed largely to the destruction of oil and natural gas infrastructure in the Niger Delta by militants.”

It, however, noted that allocation of crude oil for domestic consumption remained at 0.45 million bpd or 13.95 million barrels during the period under review.

It added, “At an estimated average of $47.59 per barrel, the average spot price of Nigeria’s reference crude, the Bonny Light, indicated an increase of 12.6 per cent, compared with the level in the preceding month. The development was attributed, largely, to increasing global oil supply outages and the growth in global oil demand, plus ongoing declines in the United States rig count and in crude oil production.”

The report put the United Kingdom Brent at $44.77 per barrel, the WTI at $46.61/b, and the Forcados at $47.19/b, adding that the commodities exhibited similar trends as the Bonny Light.

“The average price of OPEC basket of 11 selected crude streams stood at $43.23/b in May 2016. This represented a rise of 14.2 per cent, compared with the average price of $37.86/b recorded in the preceding month. It, however, showed a decline of 30 per cent relative to the level in the corresponding period of 2015,” it added.

Analysts have condemned the continued destruction of oil installations in the Niger Delta by militants, stressing that the development has put a serious strain on the country’s foreign exchange earnings.

The Director of Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, told our correspondent that “the destruction of oil installations in Nigeria is costing our economy so much, let alone how these activities have so depleted our forex reserves, which is not good for a developing economy like ours.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Unlocking Investments into Africa’s Renewable Energy Market



green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips



Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 



Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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