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Egina Field to Contribute 10% of Nigeria’s Oil Output in 2018

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  • Egina Field to Contribute 10% of Nigeria’s Oil Output in 2018

Total Exploration and Production Nigeria Limited has stated that crude oil production from its Egina deep-water field would add 200,000 barrel per day (bd) of oil to Nigeria’s production volumes in 2018, representing about 10 per cent of the country’s total output.

Total’s Deputy Managing Director in charge of Deep Water District, Ahmadu-Kida Musa stated this during an interaction with journalists at the just concluded 16th edition of the Nigeria Oil and Gas (NOG) Conference and Exhibition in Abuja.

Musa said Total decided on the Egina project at a time Nigeria’s policies for her oil and gas sector were extremely uncertain, especially with Petroleum Industry Bill (PIB) repeatedly failing to pass through legislative processes. He added that the company now looked forward to bringing it on stream in 2018.

Located some 130 kilometres off the coast of Nigeria at water depths of more than 1,500 metres, Musa explained that the Egina oil field has remained one of Total’s most ambitious ultra-deep offshore projects.

He also informed the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu who called on Total’s exhibition stand at the NOG, that the project is being developed locally to accelerate the pace of technology transfer and expand the reach of the government’s local content law.

“Egina project is our flagship project; it is going to contribute 200,000 barrels a day of oil next year to Nigeria’s production. In any form of analysis, it is like 10 per cent of Nigeria’s production volume. This is our contribution and it was not a mistake but a bold statement we made three years ago when we embarked on this project at a time nobody wanted to invest and PIB was the headline in every newspaper and a good excuse for people who are not here for the long term to not invest. Total is in Nigeria for the long term and you can see the fruits of it. We will contribute an additional 200,000 barrels per day of oil next year,” he added.

Musa also spoke about the company’s operations in Nigeria’s domestic gas industry, as well as the power sector.

According to him, Total is in the forefront of gas investment and recognising and keying into the Federal Government’s plan in terms of domestic gas.

“We built a dedicated gas line to take gas from Rumuji to Owaza, specifically and only just for domestic gas and our first client is the Alaoji IPP, and that is it for us,” he said.

“The challenges are very numerous. Clearly just as the minister said earlier, the investments that we need to make, the utilisation of the facilities even when they are built, and even when you sell the gas, you expect to be paid on time, but we all know this is normally a challenge even for well-established institutions.

I know we have quite a good number of gas that could be supplied to the power generation companies to produce more electricity, what I am very certain about now is that Nigeria needs to improve on its distribution system where you transmit the electricity you generate to consumers, I think that is where we need to work on very well,” he added.

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.

Economy

Oil Firms Borrowed N130B From Banks in February – CBN

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Operators in the downstream, natural gas and crude oil refining sectors of the Nigerian oil and gas industry borrowed N130b from Nigerian banks in February amid the significant rise in global crude oil prices.

The debt owed by the oil and gas companies rose to N4.05tn in February from N3.92bn in January, according to the latest data obtained from the Central Bank of Nigeria on Monday.

Operators in the upstream and services subsectors owed banks N1.26tn in February, down from N1.27tn a month earlier.

The combined debt of N5.31tn owed by oil and gas operators as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.

Oil and gas firms received the biggest share of the credit from the deposit money banks to the private sector.

The slump in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.

A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, reflecting expectations of rising asset risk and weakening government support capacity over the next 12 to 18 months.

“Nigerian banks’ loan quality will weaken in 2021 as coronavirus support measures implemented by the government and central bank last year, including the loan repayment holiday, are unwound,” said Peter Mushangwe, an analyst at Moody’s.

The rating agency estimated that between 40 percent and 45 percent of banking loans were restructured in 2020, easing pressure on borrowers following the outbreak of the pandemic.

Another global credit rating agency, Fitch Ratings, had noted in a December 8 report that Nigerian bank asset quality had historically fallen with oil prices, with the oil sector representing 28 percent of loans at the end of the first half of 2020.

It said the upstream and midstream segments (nearly seven percent of gross loans) had been particularly affected by low oil prices and production cuts.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

The rating agency predicted that Nigerian bank asset quality would weaken over the next 12 to 18 months.

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Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

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The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

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Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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