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Nigeria Records Biggest Drop in Oil Output

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Nigeria oil rig

Crude oil production from Nigeria dropped the most in August among its peers in the Organisation of Petroleum Exporting Countries, paring the gain it recorded in the previous month.

Nigeria had in March lost the status of Africa’s top oil producer to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd.

OPEC’s Monthly Oil Market Report for September, which was released on Monday, showed that Nigeria’s oil output fell to 1.468 million bpd in August from 1.52 million bpd in the previous month, based on direct communication.

Nigeria had in July recorded the biggest increase in output, but it was not enough to help the country regain the top spot from Angola.

According to secondary sources, OPEC crude oil production stood at 33.24 million bpd in August, a decrease of 23,000 bpd over the previous month.

“Crude oil output increased mainly from Saudi Arabia and Iran, while Nigeria and Libya showed the largest drop,” the 14-member oil cartel said in the report.

Angola saw its oil output rise to 1.775 million bpd in August from 1.767 million bpd the previous month, based on direct communication, according to the OPEC report.

Libya’s production dropped to 292,000 bpd from 313,000 bpd, while Venezuela produced 2.104 million bpd, down from 2.117 million bpd.

Ecuador’s output fell to 542,000 bpd from 549,000 bpd, while Iraq saw its production dropped by 2,000 barrels to 4.354 million bpd.

Saudi Arabia, the biggest producer in the group, recorded the biggest increase in August as it produced 10.605 million bpd, up from 10.577 million bpd in the previous month.

Iran, which has continued to increase output in a bid to snap up more market share after sanctions were lifted, produced 3.653 million bpd, up from 3.631 million bpd.

According to the report, Africa’s oil supply is projected to average 2.12 million bpd in 2016. This represents a decline of 20,000 bpd year-on-year and reflects an upward revision of 10,000 bpd from the August report.

This year, oil production from Congo is only expected to grow by 50,000 bpd to average 320,000 bpd, while output in other African countries, despite increasing output from Ghana’s production start-up in the Tweneboa, Enyenra, Ntomme project and a production ramp-up in Jubilee field in the second half of the year, will decline or be stagnant, OPEC said.

It raised its forecast of oil supplies from non-member countries in 2017 as new fields come online and United States’ shale drillers prove more resilient than expected to cheap crude, pointing to a larger surplus in the market next year.

Demand for crude from OPEC will average 32.48 million bpd in 2017, down by 530,000 bpd from the previous forecast, according to the report.

Oil is trading at $47 a barrel, half its level of mid-2014, as a supply glut that OPEC hoped cheap oil would banish sticks around.

“It is expected that there will be higher non-OPEC production in the second half of 2016 compared to the first half,” OPEC said in the report.

The cartel expects non-OPEC supply to rise by 200,000 bpd in 2017, as against a previous forecast of 150,000-bpd decline.

Near-record OPEC output, and higher supply from outside, could make it harder for OPEC and Russia to come up with steps to support the market. Producers are expected to meet in Algeria on the sidelines of the International Energy Forum from September 26 to 28.

An attempt by producers to agree to a production freeze in April failed as Iran, wanting to boost oil exports that had been restrained by Western sanctions, refused to join and Saudi Arabia insisted all producers took part.

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

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Economy

400,000bpd of Crude Oil to be Refined in Three NNPC Refineries – Says FG 

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refineries

The Federal Government through the Nigerian Content Development and Monitoring Board (NCDMB) stated that the rehabilitation of the Nigerian National Petroleum Corporation (NNPC) refineries in Warri, Port Harcourt, and Kaduna will generate a minimum of 400,000 barrels per day. 

The production represents a minimum of 90 percent of the installed capacity of the four refineries, according to NCDMB. 

Executive Secretary of the board, Simbi Wabote, said the rejig effort is part of the refining roadmap of President Muhammadu Buhari. This, he said includes four focus areas such as the rehabilitation of the existing four national refineries, co-location of new refineries, construction of greenfield refineries and construction of modular refineries.

With that, he said the nation’s combined refining capacity will rise to over 1.4 million bpd in the next five years.

Speaking at the Nigerian Continent Midstream-Downstream Oil and Gas summit in Lagos, Wabote noted that there is a chance to maximize opportunities in the midstream and downstream sectors of the oil and gas industry.

He explained that the employment factor in the midstream and downstream sectors of the industry is higher in number and of longer duration when compared to that of the upstream sector.

“This provides means to absorb outputs of our Human Capacity Development programs in the form of job opportunities. The entry barrier for businesses to partake in the midstream and downstream sectors of the industry is relatively lower compared to that of the upstream sector,” he stated on the employment opportunities lurking in the industry,” Wabote continued. 

“There are vast business opportunities in the midstream to downstream sectors ranging from processing, transportation, storage, and distribution that could be started on a small scale and later scaled up to bigger enterprises thereby growing in-country capacities and capabilities.”

He noted that the direct social impact brought by a productive and efficient midstream and downstream sector of the oil and gas industry is another potential that needs to be maximized.

“There is a sense of pride for any citizen who has the confidence that he or she could take availability of energy sources for granted in whatever form such as electricity, fuels, gas, and others. These have direct correlation to quality of life, productivity, life expectancy, and social harmony,” he added. 

He further stated that NCDMB is in partnership with NNPC to construct a 50,000 liters petroleum products terminal in Brass Island to support the storage and distribution of white products in the coastal states of the country.

The theme of the summit tagged ‘‘Towards maximizing potentials in the Midstream and Downstream Oil & Gas Sector – A Local Content Perspective,’’ is based on its 10-year strategic roadmap to achieve 70 per cent Nigerian Content target in the oil and gas industry by the year 2027.

 

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Inflation Rate Increases to 16.82% in April in Nigeria

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Nigeria's Inflation Rate - Investors King

Prices of goods and services in Africa’s largest economy Nigeria rose high in the month of April, according to the latest report from the National Bureau of Statistics (NBS).

The Consumer Price Index, which measures inflation rate, grew at 16.82% rate in the month under review from 15.92% in March 2022. The inflation rate has been on a steady rise since Novermber 2021 when it drops to 15.40%.

On a month basis, inflation increased to 1.76 percent in April 2022, representing an increase of 0.02% from 1.74% recorded in March. The persistent increase in prices reflect the changes in Nigeria’s economic fundamentals. One of the key challenges impacting prices is foreign exchange scarcity.

Naira to Dollar exchange rate jumped to N600/US$1 at the parallel market popularly known as the black market despite the Central Bank of Nigeria discouraging patronage at that section of forex. However, inability to access forex at central bank designated deposit money banks forced most Nigerians to the unregulated black market.

Similarly, the drop in the nation’s external reserves due to the lower crude oil production from the year to date dragged on foreign revenue that eventually hurt central bank ability to service the economy with enough forex in an economy that imported over 90% of its consumption.

Again, rising insecurities in key food producing regions contributed to the jump in prices of food items as noted in the report. The composite food index grew at 18.37% rate in April 2022, slower than  the 22.72% filed in April 2021.

According to NBS, the increase in the value of the index was due to rise in prices of Bread and cereals, Food
products n.e.c, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.  On a monthly basis, food sub-index grew 0.01% to 2% in April from 1.99% in March.

However, the more accurate 12 month index reflect decline in food index from 19.21% filed in March 2022 to 18.88% in April 2022.

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Economy

ICT Changing The Face of Nigeria’s Economy

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Paris - Investors King

While many thought the oil sector would save the Nigerian economy, the drift is gradually shifting away from the oil sector into the non-oil sector – the Information and Communications Technology (ICT).

A recent data revealed by the National Bureau of Statistics, sighted by Investors King, shows that the ICT has contributed 16 per cent to the growth of Nigeria’s Gross Domestic Product (GDP). 

On a year-on-year basis, compared to the previous year in the same quarter, ICT contributed 14.9 per cent to the GDP – a growth of 1.3 per cent. 

According to the data released by NBS, “In nominal terms, in the first quarter of 2022 the sector growth was recorded at 20.54 per cent (year-on-year), 12.68 per cent points increase from the rate of 7.86 per cent recorded in the same quarter of 2021, and 14.84 per cent points higher than the rate recorded in the preceding quarter. The Quarter-on- Quarter growth rate recorded in the first quarter of 2022 was -1.87 per cent.  

“The Information and Communications sector contributed 10.55 per cent to the total Nominal GDP in the 2022 first quarter, higher than the rate of 9.91 per cent recorded in the same quarter of 2021 and higher than the 9.88 cent it contributed in the preceding quarter”.   

The report added that the sector, in the first quarter of 2022, recorded a growth rate of 12.07 per cent in real terms, year-on-year.

From the rate recorded in the corresponding period of 2021, there was an increase of 5.60 per cent points. Quarter-on-Quarter, the sector exhibited a growth of -9.09 per cent in real terms.  

“Therefore, of total real GDP, the sector contributed 16.20 per cent in 2022 first quarter, higher than in the same quarter of the previous year in which it represented 14.91 per cent and higher than the preceding quarter in which it represented 15.21 per cent,” the data revealed. 

The Information and Communications sector in Nigeria comprises of Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording and Music Production and Broadcasting. 

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