Global oil benchmark, Brent crude, rose on Monday to its highest level in a month on rising speculation that major producers may work out ways to support prices in an oversupplied market.
Brent, against which half of the world’s oil is priced, rose by 2.6 per cent to $48.20 per barrel as of 6:05pm Nigerian time.
This came as indication emerged that the Organisation of Petroleum Exporting Countries could revive talks on freezing oil output levels when it meets non-OPEC nations next month.
Nigeria’s output hit its lowest in over two decades this year due to attacks on oil sites, and Libya is pumping a fraction of the pre-conflict level – raising the question of what level they should limit supplies at.
While Nigeria supported April’s freeze initiative, Libya declined to join the talks.
OPEC members will meet on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria on September 26-28.
Top exporter, Saudi Arabia, appears to favour higher prices, although Iran, Iraq and Russia present obstacles to a deal, according to Reuters.
Saudi Arabia sharply raised expectations for a global production deal, with its Energy Minister, Khalid al-Falih, saying the country would work with OPEC and non-OPEC members to help stabilise oil markets.
“The comments by the Saudi energy minister give a positive indication that they are willing to go for a freeze deal but the question remains: on what level?” said an OPEC source from a key Middle Eastern producer.
“Will the freeze be at January levels? And what about Iran? And then there is Nigeria, which has lost a lot of production since January,” the source added.
The Russian Energy Minister, Alexander Novak, was quoted as saying that Russia was consulting with Saudi Arabia and other producers to achieve oil market stability, adding that the door was still open for more discussions on output freeze, if needed.
Saudi Arabia boosted output to 10.67 million barrels per day in July from 10.2 million in January, when the freeze idea first emerged.
Since 2014, Saudi Arabia, OPEC’s de facto leader, has been raising output to drive higher cost producers out of the market and win back share from rivals such as the United States, where output soared on the back of the high oil price of the past decade.
As a result, oil prices collapsed to $27 per barrel in January from as high as $115 in mid-2014, capping output of the US but also hitting hard Saudi Arabia’s budget and resulting in a record fiscal deficit for Riyadh.
A previous attempt to freeze output at January levels to support prices collapsed in April after Saudi Arabia said it wanted all producers, including regional rival Iran, to join the initiative.
Iran had argued that it needed to regain market share lost during years of Western sanctions, which have been only softened in January.
Over the past few months, Iran, OPEC’s third biggest producer, has boosted output close to pre-sanctions levels and has repeatedly signalled it has no plans to join the freeze initiative.
But since the collapse of freeze talks in April, Iran is no longer the only obstacle to the deal.
Iraq, OPEC’s second largest producer, which in April was saying it would support the deal, has since agreed with oil majors on new contract terms to develop its massive fields, which will allow output to rise further next year by up to 350,000 bpd.
Nigeria and Libya could present further complicating factors, Reuters quoted delegates as saying.
Dangote Petroleum Refinery Set to Make History with Public Listing on NGX
Aliko Dangote, the president and chief executive of Dangote Industries Limited, has announced plans to publicly list the subsidiary, Dangote Petroleum Refinery, on the Nigerian Exchange Limited (NGX).
Dangote expressed confidence in overcoming previous challenges related to crude oil supply, stating, “We have resolved all the issues with crude oil supply. We are now ready to move forward with our plans to list the refinery on the Nigerian Exchange Limited.”
The refinery, poised to commence operations in December, holds the promise of significant contributions to the Nigerian economy.
At full capacity, it is expected to produce 650,000 barrels of oil per day, with an initial rollout of 540,000 barrels daily.
The facility will produce 27 million liters of diesel, 11 million liters of kerosene, and nine million liters of jet fuel, sourcing crude from various Nigerian producers, including the state oil company.
A finalized deal for the delivery of the first cargo of approximately six million barrels next month signals the imminent realization of this ambitious project.
The refinery’s impact is anticipated to extend beyond the oil and gas sector, with projections suggesting significant cost savings for Nigeria by eliminating the need to import petrol.
Industry operators and government officials are optimistic about the transformative potential of the Dangote Refinery.
Akinwumi Adesina, President of the African Development Bank (AfDB), lauded the project as the best-industrialized initiative for Africa, projecting substantial savings for Nigeria and the continent as a whole.
As Nigeria’s largest refinery project, the facility has garnered praise from the Lagos Chamber of Commerce and Industry (LCCI).
Dr. Chinyere Almona, the LCCI Director-General, commended the visionary efforts of Aliko Dangote and the supportive federal government, emphasizing the refinery’s capacity to meet Nigeria’s refined petroleum product needs.
The impending listing on the NGX positions Dangote Petroleum Refinery as a catalyst for economic growth, energy security, and self-sufficiency in Nigeria and beyond.
Aliko Dangote: Dangote Refinery Set to Commence Operations, Eyes 350,000 Barrels Daily
In a recent interview with the Financial Times, Aliko Dangote, the President and CEO of the Dangote Group, announced that the long-anticipated $20 billion Dangote Refinery in Lekki, Lagos, is set to commence operations by refining 350,000 barrels per day.
Dangote revealed that a deal had been secured for the delivery of the first cargo of approximately 6 million barrels in December 2023.
He expressed confidence that the refinery could achieve its full capacity of 650,000 barrels per day by the end of 2024.
The Dangote Refinery, touted as the world’s largest “single train” facility with a singular distillation unit, is expected to significantly reduce Nigeria’s dependence on imported fuel and save billions in foreign exchange.
Dangote lamented the irony that Nigeria, a major oil producer for over 50 years, has struggled to refine its own crude adequately.
However, the project, which has faced delays and exceeded its budget by about $8 billion, has not been without challenges.
Dangote dismissed doubts about the refinery’s efficiency, stating that the challenges encountered during the project could have jeopardized his business empire.
He acknowledged being under intense pressure, facing allegations of underhand business practices and gaining unfair access to foreign exchange, which he vehemently denied.
Despite these challenges, Dangote expressed gratitude for overcoming the hurdles and reaching the destination.
The refinery is expected to generate substantial revenue, and plans are underway to eventually list it as a separate company on the Lagos stock exchange.
Dangote Cement Advocates for Sustainable Cement Production Amid Rising Carbon Emissions
In a bid to address the escalating global concerns over carbon emissions, Arvind Pathak, the Group Managing Director of Dangote Cement Plc, highlighted the cement industry’s pivotal role in contributing to seven per cent of worldwide carbon emissions.
Speaking at the 12th Africa Cement Trade Summit in Abidjan, Cote d’Ivoire, Pathak emphasized the necessity for the industry to adopt sustainable practices.
Pathak acknowledged the energy-intensive nature of cement production, outlining the emissions generated throughout the value chain, from raw materials’ processing to the final product’s dispatch.
Dangote Cement, a significant player in the industry, has committed to decreasing carbon emissions through a strategic fuel substitution approach.
Pathak, represented by the Group’s Head of Sustainability, Dr Igazeuma Okoroba, advocated for the use of alternative fuels, such as municipal, agricultural, and industrial wastes, to reduce emissions.
He emphasized that these alternative fuels emit less CO2 when combusted, contributing to a more sustainable and environmentally friendly cement production process.
Despite the challenges posed by global climate shocks, Pathak stressed that decarbonization is not merely an option but a necessary strategy for future-proofing businesses.
Dangote Cement, as a pioneer in decreasing CO2 emissions, has leveraged sustainability reporting and received positive ratings for its climate change initiatives.
The adoption of alternative fuels aligns with the broader goal of addressing climate change concerns and reducing the cement industry’s environmental impact.
Pathak highlighted the need for clear and detailed decarbonization targets, emphasizing that companies must adapt to a rapidly changing world by embracing sustainable practices.
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