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Nigeria is Highly Important For Global Market, Says Aramex

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iyad-kamal

Iyad Kamal is the Chief Operating Officer, Aramex International, a global provider of logistics and technology. Kamal spoke with ADEYEMI ADEPETUN, about the importance of the Nigerian market to global business. He spoke on how the eCommerce sector can improve in the country.

How will you place the Nigerian ICT industry?
In Nigeria, we see telecommunications infrastructure has been very advance. Credit card usage is also increasing, even if there are challenges around it; cash-on-delivery is also permitted. I don’t think there are obstacles to doing good business in Nigeria. Mobile penetration is high and eCommerce services are getting bigger. So, the market here in Nigeria is actually ready for the new phase of technology growth. I don’t see why Nigeria should not be a major hub for mobile technology growth or eCommerce development in Africa. The fact remains that Nigeria has become highly important for global market.

What value and volume of business is Aramex bringing to the Nigerian system?
Aramex is bringing in the global network; this is because Nigeria is a global and important destination for businesses. The population here is huge and the atmosphere is still not volatile for doing buiness. So, for Aramex, Nigeria is a big partner. We are bringing in technology, business and the entire global community so that they can tap and add value to the ecosystem here.

We want people to enjoy the Aramex culture, which tends to differentiate us from competition. We shall also be very aggressive in investing in startups that can help to achieve Aramex vision in Nigeria. The startup can be a technology or logistic firms.

We shall aggressively tap business development in the country. Though we have partners, we are also going to deliver services individually. We shall partner with both IT and logistics firms to be able to get to every part of Nigeria. In another few years, we see Aramex becoming the logistics player of choice in the Nigerian market. This is based on the experience we coming with

Can we know more about your services?
We are talking about our expansion here in Nigeria, especially as it relates to the type of technology we are bringing into the country, especially in eCommerce. For us at Aramex, we have concluded that whatever technology being deployed in other markets, especially the advanced ones, we shall bring them here.

Now, on the consumer side, we have been able to develop an app. Aramex consumer app can be downloaded by consumers. It is for those who have ordered Aramex to help deliver the goods. So, the customer can track the goods online. With the app, he can purchase and pay for the goods online. The target is to improve consumer experience.

We have also launched courier app, where anyone can easily become Aramex courier. It is a mobile app, where you can easily with it becomea major part of Aramex.

We are also deploying a very big data engine technology in Nigeria, whereby all the information coming out from eCommerce, especially lastmile delivery process can be harnessed for economic growth. We have developed a vast technology that can easily analyse data to improve customer satisfaction.

You mentioned eCommerce, which of the players are you providing logistics solution for in Nigeria?
It is a combination. We targets both local retailers in Nigeria and international ecommerce players from across the globe, be it from USA, Europe, China and even South Africa that sees the Nigerian market as been critical for their business growth. We have solution from pick-up to lastmile strategy in Nigeria. We are opening up that solution and we have told clients that Nigeria is potential market for new services.

Do you have any relationship with market leaders including Jumia, Konga, Yudala and others in Nigeria?
We don’t do much business with them for now, but this is part of our strategy here. You see this eCommerce ecosystem is fast evolving and you will always see that you nee to work with them all from the smallest to the biggest. We all need each others. The market is big, so that strategy must fast and dynamic. We are focusing also on the SMEs.

Some of the solutions you are canvassing for, how fast do we see them impacting positively on the eCommerce sector?
This has to do with the direction of global trade. Today, it has become much easier to buy goods from any part of the world. Besides, clearances from across the globe are becoming easier for people. Countries globally, through our research are looking for ways to improve eCommerce, so they are becoming more accommodating, introducing new experience across board.So, where Aramex comes in, including other competition, is to make the entire ecosystem seamless without hitches for customers. We are deploying solutions that make the entire process simpler and faster for all to benefit.

A critical aspect of eCommerce is lastmile infrastructure and this is still a challenge in Nigeria, how is Aramex going to deal with this situation?
To look at this, you have to dissect the entire issue. We need not to have Aramex delivering the entire process. It is possible to select three or four couriers that are specialised in those areas. It is also possible to select another 20 couriers that focus on the rural areas, especially outside Lagos.

The whole issues revolved around getting the experts in those fields, then make them a sub of you and let them deliver the services on your behalf of the company.

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

Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

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Dangote Refinery

The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

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Oil Prices Hold Steady as U.S. Demand Signals Strengthening

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Crude Oil - Investors King

Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

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Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

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Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.

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