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Oil Output: FG Abandons Four-million-barrel Target



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  • Oil Output: FG Abandons Four-million-barrel Target

Seven years after the production target of four million barrels of oil per day was set, the Federal Government has given up hope of achieving that output by 2020 as the country struggles to retain its Africa’s top producer status.

The Federal Government now aims to achieve 2.5 million barrels per day by 2020, according to an Economic Recovery and Growth Plan released by the Ministry of Budget and National Planning on Tuesday.

The nation’s oil output had hit a peak of 2.88 million bpd in October 2010, according to data from the Central Bank of Nigeria. But it suffered declines on the back of a slew of militant attacks, natural decline in production from existing fields, and lack of exploration activities occasioned largely by regulatory uncertainty.

Following the resurgence of militant attacks in the Niger Delta last year, the nation’s crude oil production fell to as low as 1.3 million bpd in May, according to the Ministry of Petroleum Resources.

“With regard to the oil and gas sector, the intention is to increase the production of crude oil and gas while adding value in the downstream petroleum sector,” the ERGP indicated.

The government plans to “restore production to 2.2 million bpd in the short term and 2.5 million bpd by 2020 to increase export earnings and government revenues by additional N800bn annually.”

According to the economic plan, in 2012-2015, crude oil production was stable at an average of 2.2 million bpd.

“But in 2016, repeated attacks on oil pipelines and production facilities by militants in the Niger Delta reduced production from 2.1 million bpd in January to 1.1 million bpd in August.

“However, oil production averaged 1.8 million bpd by end 2016. This was attributed to the repairs of damaged facilities and agreements to cease sabotage and related vandalism.”

The Federal Government had in 2010 set the target of 40 billion barrels of crude oil reserves and a production of four million bpd by 2020.

The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikanti Baru, had in February at a conference in Lagos said to achieve the target, the country would need an increment of at least one billion barrels in reserves year-on-year till 2020 and half a million barrels in incremental production capacity per day within the same time frame.

He said, “Considering our quest for revenue generation as a nation, it is a given that we need to increase our exploration efforts in order to sustain our reserve base and grow production.

“It, therefore, behoves us to continue to invest in our industry to address declining production rates and future increase in demand. The current global demand forecast for oil is expected to increase to about 17 million barrels per day by 2040. For us to be a part of this and remain relevant, we need to find more to produce more.”

According to Baru, as part of government’s commitment towards ensuring that Nigeria remains the number one producer and exporter of crude oil in Africa, the Federal Government has continued to sustain the amnesty programme to ensure youth restiveness is stemmed.

“There is also increased effort towards ensuring adequate security within the Niger Delta region in order to continue to attract investors as engagement with various stakeholders remains ongoing,” he added.

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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Gold Steadies After Initial Gains on Reports of Israel’s Strikes in Iran



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Gold, often viewed as a haven during times of geopolitical uncertainty, exhibited a characteristic surge in response to reports of Israel’s alleged strikes in Iran, only to stabilize later as tensions simmered.

The yellow metal’s initial rally came on the heels of escalating tensions in the Middle East, with concerns mounting over a potential wider conflict.

Spot gold soared as much as 1.6% in early trading as news circulated regarding Israel’s purported strikes on targets in Iran.

This surge, reaching a high of $2,400 a ton, reflected the nervousness pervading global markets amidst the saber-rattling between the two nations.

However, as the day progressed, media reports from both countries appeared to downplay the impact and severity of the alleged strikes, contributing to a moderation in gold’s gains.

Analysts noted that while the initial spike was fueled by fears of heightened conflict, subsequent assessments suggesting a less severe outcome helped calm investor nerves, leading to a stabilization in gold prices.

Traders had been bracing for a potential Israeli response following Iran’s missile and drone attack over the weekend, raising concerns about a retaliatory spiral between the two adversaries.

Reports of an explosion in Iran’s central city of Isfahan further added to the atmosphere of uncertainty, prompting flight suspensions and exacerbating market jitters.

In addition to geopolitical tensions, gold’s rally in recent months has been underpinned by other factors, including expectations of US interest rate cuts, sustained central bank buying, and robust consumer demand, particularly in China.

Despite the initial surge followed by stabilization, gold remains sensitive to developments in the Middle East and broader geopolitical dynamics.

Investors continue to monitor the situation closely for any signs of escalation or de-escalation, recognizing gold’s role as a traditional safe haven in times of uncertainty.

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Global Cocoa Prices Surge to Record Levels, Processing Remains Steady




Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

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Crude Oil

Dangote Refinery Leverages Cheaper US Oil Imports to Boost Production



Crude Oil

The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

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