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Telecoms Subscribers to Get Poorer Services as Vandalism Rises

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  • Telecoms Subscribers to Get Poorer Services as Vandalism Rises

Frustrations being experienced by telecoms subscribers on account of poor services will increase even further, if the activities of vandals, which seem to be on the upward swing in Nigeria’s telecommunications sector are not checked.

This is even as operators continue to witness increasing fibre cuts and theft of infrastructure, especially their generating sets and diesel, which they use to power their base stations.

The increasing act of vandalism is impacting negatively on the quality of telecommunications services across the country, with the resultant effect being high rate of drop calls, higher calls terminations, undelivered text messages, poorer networks connectivity and a host of others.

The Guardian reliably gathered on Tuesday that fibre cut menace increased by 60 per cent in 2016. Besides, about 10,000 generating sets were said to have been lost to miscreants in the year. In 2015, report had it that the industry recorded about 1,200 fibre cuts.

While the industry still grapples with shortage of Base Transceiver Stations (BTS), which is currently put at 29,000 and spread across the country, The Guardian gathered through the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the industry’s network of over 25,000 BTS spread across the country is powered with about 50,000 generating sets.ALTON is the industry body for all telecommunications companies and service providers.

The Guardian gathered that a direct operator, like MTN, Globacom and others, use a 15-20KVA generating set, while those on co-location run a 27KVA set, which are changed sometimes every two years depending on wear and tear forces.

The Nigerian Communications Commission (NCC), the industry regulator, had at a forum in December 2014, disclosed that the sector was home to 29,000 BTS, and noted that it was abysmally low to carry the traffic on the various networks.

For effect, NCC declared that the country needed about 80,000 BTS to meet growing telecommunications service demands across the country.Further investigations showed that telecoms operators, who do not rely on Power Holding Company of Nigeria (PHCN) for electric power to run their BTS, fully relied on their generating sets. Each has two generating sets, with one as standby.

As such, based on the arrangement, telecoms operators usually have challenges of poor service quality as a result of the activities of the miscreants, which lead to service disruptions and downtime on various networks.A source in MTN Nigeria, told The Guardian that the firm had since the beginning of the year being coping with two fibre cuts on a daily basis across the country.

MTN, which has about 65 million subscribers, said that Boko Haram, the extremist Islamic sect, had destroyed 120 of its sites between 2013 and 2014. The company had at a recent function declared that at least 80 sites were destroyed during the last quarter of 2014.

During a working visit of the Minister of Communication, Adebayo Shittu, to MTN Head Office, in Lagos, a former Corporate Services Executive, MTN Nigeria, Amina Oyagbola, had solicited government’s support to address the monster of infrastructure vandalism to further improve service delivery to end users.

A telecommunications expert, Kehinde Aluko, said the increasing menace of vandalism has become a dent on the success of the sector.He stressed that this development has also limited many telecommunications operators from completely implementing outlined network expansion initiatives in the country, amid rising cost of doing business in an industry that is heavily dependent on foreign exchange and capital.

At forum earlier in the year, the Chief Executive Officer, Airtel Nigeria, Segun Ogunsanya, claimed that Nigerian operators spend between $3 billion and $4 billion as capital expenditure yearly on network expansion initiatives.

He explained that if vandalism of telecoms equipment and installations continued unabated, Nigerian subscribers could experience higher frequency of dropped calls, incoherent transmission and undelivered text messages.

“Two per cent to three per cent of Nigeria’s telecoms sites are affected by random shutdown and destruction at any given point in time,”added. Experts are of the view that the current situation has been exacerbated by the failure of the National Assembly to pass the Critical National Infrastructure Bill.

The bill, if passed into law, will criminalise any act of vandalism of telecoms equipment, since they will be classified as critical national infrastructure.

According to Chairman of ALTON, Gbenga Adebayo, stressed that inadequate power supply and insecurity; vandalism; multiple taxation and regulation among others have impacted seriously on the fortunes of the industry.

Adebayo said telecoms infrastructure should be seen as critical equipment just like the oil pipelines, as well as PHCN and NITEL (Nigerian Telecommunications Limited) facilities.

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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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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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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