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Nigeria Loses N11bn Daily as Oil Exports Suffer

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As four of the nation’s crude oil grades remain under force majeure and the schedule for two other grades face delay, the country is losing at least N10.7bn in revenue daily.

Following the declaration of force majeures on the grades, more than 700,000 barrels per day of production have been affected, denying the country a huge revenue, according to a report by Reuters on Thursday.

Nigeria relies heavily on earning from oil exports, and the recent production disruptions caused by militant attacks came as an additional headache for an economy that already suffers from the sharp drop in oil prices since 2014.

The nation’s crude oil production has fallen from an average of 2.2 million bpd to as low as 1.3 million barrels per day, the Federal Government has said.

According to the government, the plunge is primarily due to the destruction of oil and gas installations in the Niger Delta region, and it has decreased the country’s revenue by over 60 per cent.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed this on Thursday at the headquarters of the Nigerian National Petroleum Corporation in Abuja while explaining how the crash in crude oil prices and the militancy by agitators in the Niger Delta region had adversely affected the nation’s economy.

He said, “We are presently passing through very grave circumstances in Nigeria. Oil that was at a price of about $120 is at about $42 per barrel today. The price has continued to struggle and based on this element alone, the Federal Government has lost over 50 per cent of its income and so do the states.

“As if that wasn’t bad enough, the militancy itself has brought down production from an average of 2.2 million barrels to about 1.4 million barrels today. And if I discount what I’m seeing here today, it probably is about 1.3 million barrels. So, what this means is that when you take the cumulative effect of both pricing and militancy, we are down to more than 60 per cent drop in the income of this country.”

Kachikwu’s statements came as the Group Managing Director, NNPC, Dr. Maikanti Baru, urged the National Association of Petroleum Explorationists to explore the hydrocarbon potential of green frontier basins in order to increase the nation’s reserves, which were fast depleting.

Baru gave this charge when he received the leadership of NAPE led by its National President, Mr. Nosa Omorodion, at the NNPC Towers.

The NNPC GMD described the association as a very important part of the oil and gas industry in promoting policy formulations that had led to the growth of exploration of hydrocarbon resources in Nigeria.

He urged NAPE to play a key role in promoting public private partnership in the exploration of some of the green frontier basins, noting that the Federal Government would be willing to provide the needed incentives for such prospective investors.

Earlier, the National President of NAPE had said the primary objective of the association was to promote excellent ideas in the exploration of hydrocarbon, which had contributed to the passage of landmark legislations such as the Local Content Act.

Omorodion felicitated with the GMD on his appointment, saying that NAPE would confer on him a honourary membership award, which is the highest award from the association, due to his track record in the Nigerian oil and gas industry.

The Energy International Administration, the statistical arm of the United States’ Energy Department, recently said Nigeria’s crude oil production would remain depressed through 2017 as a result of militant attacks.

The EIA said the crude oil production disruptions in Nigeria reached 750,000 bpd in May 2016, the highest level since January 2009.

Since the beginning of 2016, the Niger Delta Avengers have intermittently attacked the oil and natural gas infrastructure concentrated in the Niger Delta region.

For more than three months, three of the grades, Forcados, Qua Iboe and Brass River, have been under force majeure — a legal clause that allows companies to cancel or delay deliveries due to unforeseen circumstances.

Shell Petroleum Development Company of Nigeria Limited declared force majeure on exports of Bonny Light on August 12, just over a month after it lifted the force majeure it declared on the grade on May 10.

The oil major declared force majeure on liftings from the Forcados export terminal on February 21, following the disruption in production caused by the spill on its subsea crude export pipeline.

It remained unclear whether ExxonMobil would be able to use a smaller alternate pipeline to resume some Qua Iboe exports. No programme has emerged for the grade. Schedules for Erha and Bonga were also delayed, according to Reuters.

Sources were quoted to have said line tests had begun about two weeks ago. Repairs to the main subsea line are expected to take at least another month to complete.

Meanwhile, the country lost a total sum of $30bn in oil revenue between 2014 and 2015 as a result of the drop in crude oil prices, the Executive Director/Chief Executive Officer, the Nigerian Export Promotion Council, Mr. Segun Awolowo, has said.

He gave the figure on Thursday in Abuja while speaking at the graduation ceremony of the third batch of the NEPC zero-to-export capacity-building programme.

The NEPC boss said while the country earned about $70bn in crude oil in 2014, the amount earned dropped by $30bn in 2015 to $40bn.

He said as a result of the volatile nature of the oil market, the country could no longer depend on such commodity, hence, the need to groom a new crop of non-oil exporters that would assist in diversifying the economy.

He said, “The Federal Government fiscal strategy framework for the next three years is based on non-oil. So, you could not have chosen a better time to equip yourselves with the skills to effectively participate in non-oil export sector.

“Recent developments on global commodities market have triggered a wake-up call on the need for us to accelerate the diversification of our economy, moving away from an over-dependence on oil as our main source of revenue.

“Since peaking in June 2014, the price of crude oil has fallen roughly by 60 per cent. Nigeria lost $30b in oil revenue between 2014 and 2015.”

Awolowo said in a bid to encourage the new set of exporters, NEPC, in collaboration with Providus Bank Plc, had secured a N100m financing facility for the graduands.

The Executive Director, Providus Bank Plc, Mr. Kingsley Aigbokhaevbo, said the bank would continue to support the diversification strategy of the Federal Government.

He said the N100m facility would be made available to the new exporters, adding that this would enable them to achieve their objective of making their first exports in October this year.

The zero-to-export initiative is one on the programmes of NEPC that focuses on creating new generation of Nigerian exporters through practical and theoretical training of business executives, bankers, civil servants ad unemployed graduates among others in the export business.

So far, the programme has trained and graduated over 100 participants from Lagos and Abuja.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Computer Village Traders Demand Refunds as Lagos State Cancels Katangowa Project

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Traders at the renowned Computer Village in Lagos find themselves in a state of uncertainty following the abrupt termination of the multibillion-naira Katangowa project by the Lagos State Government.

The project, which was aimed at relocating the bustling tech market from its current site in Ikeja to the Agbado/Oke-Odo area of the state, has left traders in a state of limbo.

Despite the cancellation of the project reportedly occurring two years ago, traders claim they were not informed by either the government or the developers, Bridgeways Limited.

This lack of communication has left them in a precarious position, particularly concerning the substantial upfront payments made by some traders to the developers.

Chairman of the Computer Village Market Board, Chief Adebowale Soyebo, expressed dismay at the lack of communication from the authorities regarding the project’s termination.

He explained that neither the government nor the contractors had officially informed them of the decision, leaving traders in the dark about the fate of their investments.

Traders who had made payments to Bridgeways Limited now seek clarity on the refund process. The absence of official communication has compounded their concerns, with many uncertain about the fate of their investments.

While acknowledging the payments made by traders, Lagos State Governor’s Adviser on e-GIS and Urban Development, Dr. Olajide Babatunde, assured that the government would facilitate refunds.

He, however, said there is a need for proper identification and verification to ensure that affected traders receive their refunds accordingly.

The termination of the Katangowa project has reignited debates about the relocation of Computer Village.

Traders assert that the issue of relocation should not be raised until the new site is at least 70% completed, as per their agreement with the government.

The cancellation of the Katangowa project underscores the challenges associated with large-scale urban development projects and the importance of transparent communication between stakeholders to avoid such situations in the future.

As traders await further directives from the government, they remain hopeful for a resolution that safeguards their interests and ensures the continuity of one of Nigeria’s most prominent tech markets.

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Government Begins Disbursement of N200bn Support Fund to Manufacturers and Businesses

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The Ministry of Industry, Trade and Investment has initiated the disbursement of the long-awaited N200 billion Presidential Conditional Grant Scheme.

This is the beginning of a vital phase in the government’s strategy to provide financial assistance to manufacturers and businesses across Nigeria.

The scheme, which is being administered through the Bank of Industry (BOI), has been divided into three categories of funding, totaling N200 billion.

The disbursement process comes after an exhaustive selection process and verification of applicants to ensure transparency and accountability in the allocation of funds.

Doris Aniete, spokesperson for the Ministry of Industry, Trade and Investment, announced the progress in a statement posted on the trade minister’s official X (formerly Twitter) handle.

Aniete highlighted that verified beneficiaries have already started receiving their grants, signaling the beginning of the phased disbursement strategy.

“We are pleased to inform you that the disbursement process for the Presidential Conditional Grant Programme has officially commenced. Some beneficiaries have already received their grants, marking the beginning of our phased disbursement strategy,” stated Aniete.

She further disclosed that by Friday, April 19, a substantial number of verified applicants are set to receive significant disbursements.

However, Aniete emphasized that disbursements are ongoing, and not all applicants will receive their grants immediately, assuring that all verified applicants will eventually receive their grants in subsequent phases.

The initiation of the disbursement process comes after more than eight months since President Bola Tinubu announced the grant for manufacturers and small businesses.

The scheme aims to mitigate the adverse effects of recent economic reforms and foster sustainable economic growth by empowering businesses with financial support.

President Tinubu had outlined the government’s commitment to strengthening the manufacturing sector and creating job opportunities through the disbursement of N200 billion over a specified period.

The funding is intended to provide credit to 75 enterprises, each able to access up to N1 billion at a low-interest rate of 9% per annum.

However, the implementation of the programme has faced challenges, including delays and criticisms regarding the registration process.

Femi Egbesola, President of the Association of Small Business Owners, expressed concerns over the slow pace of data collation and suggested that genuine businesses were being discouraged from accessing the loans.

Despite the hurdles, the commencement of the disbursement process signifies a significant step forward in the government’s efforts to provide vital support to manufacturers and businesses, potentially revitalizing economic activities and driving growth across various sectors.

As beneficiaries begin to receive their grants, the impact of this initiative on the nation’s economic landscape is eagerly anticipated.

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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

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Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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