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FG, Oil Majors Sign $5.1bn JV Settlement Deal



  • FG, Oil Majors Sign $5.1bn JV Settlement Deal

The Federal Government on Thursday signed a deal with Shell, Chevron, Total, Eni and Exxon Mobil to clear unpaid bills worth $5.1bn for oil production joint ventures piled up over many years.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said in a speech at the signing ceremony that the deal would unlock new investment in the country’s oil and gas sector, adding that the repayment would take place over the coming five years.

He said the oil majors had given the country a discount of $1.7bn, lowering the original amount from $6.8bn.

The agreement will also ensure that future Nigerian payments to production joint ventures with oil majors would be paid in time, according to the minister.

Kachikwu also said that Forcados exports would resume soon, without giving any more precise information. The grade has been under force majeure since February after multiple attacks on the pipelines that carry it to the export terminal.

The exit from joint ventures cash call agreements between the Nigerian National Petroleum Corporation and international oil companies will lead to an increase in the country’s revenue by $2bn annually, the Federal Government has said.

This is coming as Vice President Yemi Osinbajo announced that the elimination of subsidy on petroleum products had removed a monthly financial burden of N15.4bn on the Federal Government.

Osinbajo disclosed this on the occasion of the signing of an agreement for joint venture cash call exit and presentation of the 2016 petroleum sector scorecard by the Federal Ministry of Petroleum Resources in Abuja on Thursday.

“The downstream oil sector has been deregulated through the elimination of petroleum subsidy, among others. The elimination of petroleum subsidy has removed from the government a burden of not less than N15.4bn monthly,” the Vice President, who was represented by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, said.

On the significance of the cash call exit, the Petroleum Resources ministry, in a document made available to our correspondent in Abuja, stated that the move would restructure the financing template for oil earnings, increase investments and boost government revenues.

It said the agreement would bring clarity and stability to the management of the country’s main revenue source, adding that the exit had already received the approval of the Federal Executive Council.

The ministry explained that the exit was part of new measures and strategies aimed at eliminating the burden of joint venture cash call arrears and securing future funding for the upstream petroleum sector.

It said, “These strategies, which are fully supported by the National Economic Council, will lead to an increase in national production from the current 2.2 million barrels per day to 2.5mbpd by 2019, as well as reduction in unit technical costs from $27.96/barrel oil equivalent to $18/boe.

“The net payments to the Federation Account is expected to double from about $7bn to over $14bn by 2020, and the immediate effect of the new cash call policy will increase net Federal Government of Nigeria revenue per annum by about $2bn.”

Kachikwu pledged that the ministry would continue to drive innovation and change in its approach to delivering an oil and gas industry that would be internationally competitive and governed by open and transparent processes to ensure security of investment for both domestic and international investors.

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

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Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024




The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%



IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty



South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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