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Chinese Firm Wins $1.85bn Kano Light Rail Contract

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Light Rail

Another light rail project is in the offing as a Chinese firm has received the approval to construct the line in Kano at a sum of $1.85bn (N589.8bn).

An online report by The Cable on Monday gave the construction firm as the China Railway Construction Corporation.

This is coming less than a year to the completion of the first light rail project being constructed in Lagos by the state government. Another Chinese firm, China Civil Engineering Construction Corporation is handling the project.

In a special announcement on Monday, the CRCC said its directors had received a provisional letter of award from Nigeria for the Kano light rail project.

The rail, with a total length of 74.3 kilometres, is expected to travel at a speed of 100 kilometres per hour.

In context, 100 kilometres per hour is as fast as moving from Lagos to Ibadan in 72 minutes.

The first phase of the project construction is billed to take two years, while the second phase of the four-line rail is expected to take another two years.

“The project contract amount is approximately $ 1.851bn, accounting for two per cent of the company’s 2015 revenue, under the China Accounting Standards,” the firm said.

The receipt of the contract is valid for three weeks from the day of award, after which “uncertainties” will prevail.

Nigeria is investing heavily in capital projects, building infrastructure, and replacing half-a-century old rail lines in the country.

With over N1tn budgeted for capital expenditure in the 2016 Appropriation Act, Nigeria is expected to invest the highest amount in capex in its 56-year history.

Rail transportation received a boost in Nigeria on July 26 this year when President Muhammadu Buhari inaugurated the Abuja-Kaduna commercial train operation after series of postponements.

The modernisation phase of the project had commenced with the signing of the contract for the construction of Abuja (Idu) to Kaduna (Rigasa) rail line in 2009.

Buhari had said the rail line would significantly enhance and provide affordable and safe movement of passengers and freight between the Federal Capital Territory and Kaduna State.

He said that the train operation would also serve as a major catalyst for industrialisation and generation of employment.

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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Crude Oil

Crude Oil Dips Slightly on Friday Amid Demand Concerns

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Crude oil gains

On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.

Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.

Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.

The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.

This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.

Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.

Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.

While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.

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Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal

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Ship Aveon Offshore

Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.

The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.

Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.

However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.

This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.

August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.

The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.

Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.

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Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO

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Nigeria oil rig

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.

Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.

Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.

He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.

Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.

The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.

Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.

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