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India Wants to Lift More Oil From Nigeria

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  • India Wants to Lift More Oil From Nigeria

Indian state-run refiners are pressing for an increase in crude oil allocations from Nigeria as demand from the South Asian country climbs, an official from the Nigerian National Petroleum Corporation has said.

The request comes just before Nigeria’s crude oil term lifting contracts for 2017 are finalised, which will be decided by mid-December.

India as the largest buyer of Nigerian crude has always said it should have a longer-term arrangement with the NNPC to ensure security of supply.

“Three Indian companies said that they were looking for a combined total of 11 million metric tonnes [in 2017] from nine million mt [this year],” the Group Executive Director, Refineries, NNPC, Anibor Kragha, told S&P Global Platts in an interview on the sidelines of the Petrotech conference in New Delhi on Monday.

“Now what they will get is a balance between term contracts and [spot] sales contracts,” he added.

At least seven barrels of crude make one metric tonne.

The Nigerian crude oil term contracts involve the export of around 1.17 million bpd of Nigerian crude, out of the 2.2 million bpd the country can theoretically produce. They are then sold by contract holders to end-users, refiners and other buyers.

But with Nigerian oil output sharply down due to renewed militancy, the term volumes could be much lower for 2017 if output does not rebound.

Nigerian oil output had recovered sharply after it fell to a 30-year low in early summer but renewed attacks on oil infrastructure in the Niger Delta have shut in production of popular export grade Forcados in the past month.

Total oil/condensate production was around 1.9 million bpd, including 300,000 bpd of condensates, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said last week.

He said output could reach 2.2 million bpd if the militancy issues were resolved by early next year.

Kragha said that negotiations were ongoing and that he was not sure if the deal would materialise but added that once the Nigerian output recovers, it would “increasingly look towards India” as the major buyer of its crude.

“Indian demand is very positive for us. A vibrant Indian economy is good for us,” he said.

The two countries have been working on a Memorandum of Understanding in the past month to enable the participation of Indian companies in Nigeria’s upstream and downstream oil and gas sector.

The deal being negotiated by Nigeria will also have the Indian government make an upfront payment for the purchase of Nigeria’s crude on a long-term basis as well as Indian public sector companies investing in Nigerian refineries.

Kachikwu recently said the country had negotiated a $15bn investment with India, where the Indian government would make an upfront payment to Nigeria for crude oil purchases.

Indian state-owned refiners tend to buy most of their crude on term contracts while their remaining requirements are sought via tenders.

“We just came out of a meeting with key Indian oil companies and they are pushing to get incremental allocations for the term contracts. We explained to them that there needs to be a balance,” said Kragha.

India is a significant buyer of Nigerian crude, which is largely light and sweet, rich in petrol and diesel and low in sulphur, and meets the needs of Indian refiners.

State-owned refiners such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited are major regular buyers of Nigerian crude types like Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami.

A source from an Indian refiner told Platts that Nigerian crude had become a must for most of its refineries, especially the older ones, which had been designed to run light sweet crudes.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude; but we want them to supply us with more,” he said.

India, which is currently among the world’s fastest growing economies, has seen its petrol and diesel demand climb sharply over the past few years. This has encouraged Indian refineries to buy more Nigerian crudes.

In 2015-2016, India imported nearly 23.7 million mt of Nigerian crude, nearly 12 per cent of India’s overall oil imports, according to official Indian data.

The South Asian country also imports some two million mt/year of liquefied natural gas from Nigeria.

Every month, almost 20-25 per cent of total Nigerian crude exports travel to India, particularly to the IOC, which is the main recipient of Nigerian crude.

Indian refiners such as the IOC, HPCL and BPCL are currently on crude oil term lifting contracts for 2016 with the NNPC.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Honeywell Flour Mills Introduces Spaghetti Mini Pack

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Honeywell Flour Mills Plc has introduced its new spaghetti mini pack as part of efforts to develop pocket-friendly products to customers.

The product was introduced at an unveiling ceremony held recently in Ogun State. The launch was attended by the company’s key executives.

They included the Managing Director of Honeywell Flour Mills, Lanre Jaiyeola; Director of Manufacturing Operations, Ifeanyi Abadom; Head of Operations, Sagamu, Tunde Adebayo, and Consumer Marketing Manager, Esther Tontoye.

According to the company, the launch of Honeywell Spaghetti Mini was based on extensive research and insight into the Nigerian consumer behaviour over the past decade.

The product was specifically developed to meet the expectations of today’s Nigerian consumer market, it added. The Spaghetti Mini 200 gm pack has a retail price of N100, fulfilling the company’s drive for affordability.

Commenting on the launch of the product, Jaiyeola said: “Honeywell Flour Mills is a key player in the food manufacturing business in Nigeria today and our consumers play a pivotal role in this regard.

“This new product is the first of its kind in the pasta category and we are happy to have introduced it to the Nigerian market.

“We are more than delighted to launch this innovative product in response to our observation and findings into Nigeria’s consumer behaviour and the push for convenience,” he added.

As a customer-centric organisation, “we continue to look for diverse and innovative ways to satisfy our consumers optimally. Innovation for us remains the yardstick which we believe will allow us to deliver even more superior products.

“And we will continue to fulfil our core objective – to support the food security agenda of the government by producing good quality, nutritious and affordable food products for the complete satisfaction of Nigerians.”

Buttressing Jaiyeola’s statement, Abadom, said, “the Honeywell Spaghetti Mini is a unique product that will satisfy a yearning for convenience in Nigerians. And with the development of this product, we have ensured that the policies, desired standards and quality set for ourselves are being surpassed.”

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South African Government to Sell Stake in South African Airways to Takatso Consortium

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South African Airways - Investors King

The South African government is selling a 51% stake in South African Airways (SAA) to Takatso consortium, which will initially commit more than 3 billion rand ($221 million) to give the struggling airline a new lease of life.

SAA has been under a form of bankruptcy protection since December 2019, but its fortunes worsened during the COVID-19 pandemic and all its operations were mothballed in September 2020 when funds ran low.

The airline is one of a handful of South African state companies that depend on government bailouts, placing the national budget under huge strain at a time of rapidly rising debt.

The partnership with Takatso will alleviate that financial burden, public enterprises minister Pravin Gordhan told journalists on Friday as the state would no longer provide any funding to the airline, which exited administration in late April after receiving 7.8 billion rand from the government. read more

Gordhan added that the government will retain a 49% stake with the intention of eventually listing the airline to address future funding requirements.

“The objective of bringing in an equity partner to SAA is to augment it with the required technical, financial and operational expertise to ensure a sustainable, agile and viable South African airline,” he said.

The consortium includes pan-African investor group Harith Global Partners and aviation group Global Aviation, Gordhan said.

Following the announcement, co-founder and consortium Chair Tshepo Mahloele told Reuters that 3 billion rand should be sufficient to operate the airline for 12 to 36 months.

The government could dispose of more of its ownership stake going forward, he added.

“They aren’t married to this 49%,” he said. “They won’t be putting more money into this asset.”

An initial public offering for the airline is unlikely to happen within the next three years, and SAA would first need to become profitable, Takatso Chief Executive Gidon Novick said.

Novick said Takatso would seek to relaunch SAA as soon as possible, prioritising first domestic service followed by regional destinations.

International long-haul routes would follow but would be selected carefully, and SAA would also work to forge partnerships with major carriers.

“We’re going to be competing with the greatest airlines in the world, and we need to be mindful of that,” Novick said.

The airline’s subsidiaries meanwhile will be evaluated, in particular Air Chefs, SAA Technical and low-cost airline Mango, Gordhan said, noting that “anything can happen” when asked if some could be shut down.

SAA will continue to be domiciled in South Africa and the government will have a “golden share” of 33% of the entity’s voting rights and certain areas of national interest, Gordhan said.

($1 = 13.5379 rand)

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Coca-Cola Partners NGOs To Clear Plastic Waste In Nigeria

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Coca-Cola Nigeria has said it partnered with non-profit organisations to reduce plastic pollution across the country.

In a statement on Thursday, it said it would be doing more to promote environmental sustainability as part of efforts to commemorate World Environment Day.

It stated that it had introduced initiatives to protect the environment through its philanthropic arm, the Coca-Cola Foundation.

Coca-Cola said that it supported the Statewide Waste and Environmental Education Foundation to launch the Eko Beach Race 2021 themed ‘A race against plastic pollution.’

The event had in attendance 2,000 youths, students and sports enthusiasts who participated in a marathon race and beach clean-up.

SWEEP Foundation’s President, Obuesi Philips, stated at the event that it “was geared towards recognising the growing contributions of sport to the realisation of societal development.”

The drink maker also partnered with the Aid for Rural Education Access Initiative to host the “Recycle and Win” festival.

It included community outreach and clean-up programmes in Kwara, Kano, Kaduna, Yobe and Oyo States. Coca-Cola said that 10 tons of plastic bottles were recovered through the process.

The Director, Public Affairs, Communications and Sustainability at Coca-Cola, Nwamaka Onyemelukwe, urged Nigerians to adopt more eco-friendly practices while emphasising the urgency of the current global situation.

Onyemelukwe stated, “At Coca-Cola, we recognise there is a packaging waste problem globally and especially in Nigeria, which is why we pioneered the World Without Waste initiative to engineer innovative solutions to tackle this challenge.

“World Environment Day presents an opportunity for us to act on this mandate as seen by the number of environmental sustainability initiatives we have supported in collaboration with local implementing partners.”

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