- OPEC Approves Output Cut Strategy
OPEC officials approved on Monday a document outlining the exporter group’s long-term strategy, in a sign its members are making progress in ironing out differences over how and when to manage production levels and, ultimately, oil prices.
The approval of the document has been repeatedly postponed with OPEC price hawks such as Algeria and Iran saying the Organization of the Petroleum Exporting Countries should be prepared to defend oil prices by cutting production.
But OPEC’s de facto leader Saudi Arabia has been arguing since the end of 2014 that oil prices should be determined by the market and OPEC should not cut output to make room for higher-cost producers.
However, since the last time the long-term strategy was debated and rejected by OPEC officials in May, the kingdom’s position has shifted and OPEC in September agreed to limit its supplies to boost prices – its first such decision since 2008.
With veteran Saudi oil minister Ali al-Naimi replaced by Khalid al-Falih, Saudi Arabia has signalled its willingness to return to managing the market and reducing production levels arguing that otherwise global investments could drop too steeply and cause a new super-spike in oil prices.
On Monday, four OPEC sources said the OPEC board of governors, which has been discussing an update of the long-term strategy since 2015, met in Vienna and approved the latest version.
“It’s approved,” one of the sources said, adding the meeting “went smoothly.”
“Yes, finally,” another source said, adding that only few changes had been made and that unlike in previous meetings when Saudi Arabia clashed with Iran, on Monday Riyadh managed to convince other countries without much of a struggle.
The board of governors discussed how member countries would view the role of the exporting group in coming years, OPEC sources said. OPEC should not return to individual quotas and it should be more than a talking shop, the sources said, deflecting criticism of its refusal to intervene in the market two years ago when prices started falling sharply.
They agreed that it should return to its role of managing the market – which it has effectively abandoned since 2014 – and become more proactive in anticipating changes in demand and supply patterns, the sources said.
Executing real production cuts still remains a challenge for OPEC – on Friday its officials failed to reach a compromise after hours of talks amid objections by Iran.
But other OPEC officials including Secretary-General Mohammed Barkindo remain optimistic a final deal on supply cuts will be agreed when oil ministers meet next on Nov. 30.
NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually
Nigeria Liquefied Natural Gas Limited (NLNG) has announced a significant milestone in its operations, boosting its annual production of liquefied petroleum gas (LPG), commonly known as cooking gas, to over 1.5 million metric tonnes.
This surge in production underscores NLNG’s commitment to meeting the rising demand for clean cooking energy in Nigeria.
The entirety of NLNG’s 1.5 million tonnes production is now being sold domestically within Nigeria.
Moreover, the company has initiated a landmark shift by starting to supply LPG in naira, moving away from the traditional practice of trading in United States dollars.
This move aligns with calls from stakeholders in the oil and power sectors advocating for naira transactions, especially amidst the challenges posed by currency fluctuations.
During a panel session at the 7th Nigeria International Energy Summit in Abuja, NLNG’s General Manager of Finance, Fatima Adanan, highlighted the company’s dedication to enhancing LPG penetration across the country.
Adanan emphasized NLNG’s vision to make Nigeria a better place by promoting the use of cleaner energy sources like gas.
While NLNG’s production surge is commendable, Adanan acknowledged that Nigeria’s LPG requirements surpass the current output, necessitating imports to bridge the gap.
However, NLNG remains committed to expanding its production capacity to meet the nation’s energy needs and drive increased adoption of LPG as a cleaner cooking fuel.
CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%
The Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 400 basis points to a record 22.75%.
The decision made by the Monetary Policy Committee (MPC) comes amidst rising inflationary pressures and growing uncertainty in Africa’s largest economy.
Nigeria’s inflation rate rose to 29.90% in January 2024, the highest in over two decades while the nation’s unemployment rate quickened to 5% in the third quarter of 2023. Suggesting that the rising costs have continued to drag on both new job creation and the existing ones.
This coupled with a series of policy adjustments implemented by President Bola Ahmed Tinubu has plunged economic productivity and eroded consumer spending as citizens grapple with high fuel prices, electricity tariffs, a record-high foreign exchange rate, and insecurities.
Therefore, it is surprising that the Monetary Policy Committee (MPC) led by the CBN will further increase borrowing costs by 400 basis points at a time when job creation is paramount.
While the economy reportedly grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, this growth is yet to crystalise as businesses and citizens have taken to the street protest against the harsh economic situation.
Economic experts have started questioning the data from the National Bureau of Statistics (NBS) given its lack of correlation between the data and economic reality.
President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait
After two decades of anticipation, President Bola Tinubu, through his representative Vice President Kashim Shettima, inaugurated the long-awaited Geometric Power Plant in Aba, a significant milestone in the city’s quest for reliable electricity supply.
The event, which also saw the commissioning of three rehabilitated roads by Abia State Governor Alex Otti, symbolizes the culmination of years of perseverance and determination to transform Aba’s power landscape.
Addressing the audience, Vice President Shettima hailed the project as a testament to the power of visionary leadership and unwavering commitment to progress.
He said the Geometric Power Plant exemplifies the transformative impact of strategic infrastructure investments on local communities.
Governor Otti echoed similar sentiments, emphasizing the importance of the power project in positioning Aba as a hub for national and international business ventures.
He commended the efforts of Geometric Power Limited while urging them to uphold transparency and avoid exploiting consumers.
The inauguration of the Geometric Power Plant comes amidst growing concerns over Nigeria’s power infrastructure and the need for sustainable solutions to address electricity shortages.
The project, with a capacity of 188MW, holds promise for significant improvements in power supply across Abia State, benefitting nine out of seventeen local government areas.
The Managing Director of Geometric Power Limited, Ben Caven, underscored the scale of investment involved, totaling $800 million.
He highlighted the comprehensive nature of the project, which includes the installation of new power substations and a 27km natural gas pipeline, signaling a comprehensive approach to enhancing Aba’s energy infrastructure.
In conclusion, the inauguration of the Geometric Power Plant represents a transformative moment for Aba, offering renewed hope for economic growth and prosperity powered by reliable electricity supply.
Naira6 days ago
Black Market Dollar to Naira Exchange Rate Today, February 26th, 2024
Naira2 days ago
Black Market Dollar to Naira Exchange Rate Today, March 1st, 2024
Naira4 weeks ago
Dollar to Naira Black Market Today, February 5th, 2024
Forex3 weeks ago
CBN Mandates Nigerian Banks to Pay International Transfers in Naira
Fintech2 days ago
OPay Urges Customers to Complete BVN, NIN Verification Following CBN Directive
Naira4 weeks ago
Dollar to Naira Black Market Today, February 6th, 2024
Cryptocurrency3 days ago
Binance Disables Naira Feature to Halt Possible Capital Outflow
Naira3 weeks ago
Dollar to Naira Black Market Today, February 8th, 2024