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Oil Companies Cut over 440,000 Jobs -NNPC

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  • Oil Companies Cut over 440,000 Jobs -NNPC

The Nigerian National Petroleum Corporation (NNPC) has stated that the current downturn in the oil and gas industry has forced the industry to cut 440,000 jobs globally since 2014.

In a keynote address at the recent 10th Annual sub-Saharan Africa Oil & Gas Conference held in Houston, Texas, United States, NNPC’s Chief Operating Officer in charge of Ventures, Dr. Babatunde Adeniran said in addition to the job cuts, there were retirement of workers who started their careers in the 1970’s and 1980’s.

“Unfortunately, the industry is not doing enough to attract young millennials to fill the knowledge gap created by the latter exits. The downsizing and lack of job opportunities in the industry have created a situation where many students no longer want to enroll in oil & gas-related courses. There is an imminent talent shortage,” he said.

Adeniran, who delivered an address on: “Current state of our Industry and the Transformational Adjustments Required to Succeed in this new Petroleum Era,” noted that universities in Nigeria and sub-Saharan Africa will need to double their graduate supply of petro-technical professionals by 2020.

He said the discovery of abundant unconventional resources like shale oil and gas had generally changed the global oil and gas landscape

“On the supply side, low prices and increased price volatility have shifted the industry from large complex mega projects that will require years to develop to smaller, quick-to-monetise discoveries,” he said.

Adeniran said there had been a paradigm shift from “big oil” to “fast oil”.

According to him, the U.S. shale and light tight oil (LTO) players with short exploration-to-production cycles and low breakeven prices have become the new “swing producers”.

Furthermore he said, they can respond quicker to market demand and are pushing out slower, higher cost producers from the supply curve.

He said the oil and gas industry is at a cross-road as the fundamental changes, which had occurred over the last five years, have permanently disrupted the supply and demand dynamics.

Adeniran added that many oil and gas- rich countries now face the risk that their unproduced reserves might become worthless in future.

He further stated that undeveloped resources are likely to become “stranded” in the ground.

To thrive in the new petroleum era, Adeniran argued that companies needed to re-think the essence of their business and their role in the value chain.

“Thinking outside the box: Over the last three years, IOCs have been less susceptible to upstream margin erosion from oil price drop because of their diversified presence across the value chain. Likewise, leading NOCs like Statoil and Saudi Aramco have been optimising their “non-oil” ventures in properties, shipping, medical, insurance and bio-fuels, and so is NNPC. NNPC is beginning to toll along this line by creating “Ventures” Directorate in 2016 to commercialise some of its “cost center” entities and create non-core businesses for additional revenue generation. Adopting a diversified portfolio provides a natural hedge against the inherent volatility of the upstream business,” he explained.

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

COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday

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Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.

Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.

The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.

OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.

This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.

Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.

The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.

President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.

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Economy

Seyi Makinde Proposes N266.6 Billion Budget for Oyo State in 2021

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The Executive Governor of Oyo State, Seyi Makinde, has presented the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly on Monday.

The proposed budget titled “Budget of Continued Consolidation” was said to be prepared with input from stakeholders in all seven geopolitical zones of Oyo state.

Governor Makinde disclosed this via his official Twitter handle @seyiamakinde.

According to the governor, the proposed recurrent expenditure stood at N136,262,990,009.41 while the proposed capital expenditure was N130,381,283,295.63. Bringing the total proposed budget to N266,6444,273,305.04.

The administration aimed to implement at least 70 percent of the proposed budget if approved.

He said “The total budgeted sum is ₦266,644,273,305.04. The Recurrent Expenditure is ₦136,262,990,009.41 while the Capital Expenditure is ₦130,381,283,295.63. We are again, aiming for at least 70% implementation of the budget.”

He added that “It was my honour to present the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly, today. This Budget of Continued Consolidation was prepared with input from stakeholders in all seven geopolitical zones of our state.”

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Economy

World Bank Expects Nigeria’s Per Capita Income to Dip to 40 Years Low in 2020

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The World Bank has raised concern about Nigeria’s rising debt service cost, saying it could incapacitate the nation from necessary infrastructure development and growth.

The multilateral financial institution said the nation’s per capita income could plunge to 40 years low in 2020.

According to Mr. Shubham Chaudhuri, Country Director for World Bank in Nigeria, the decline in global oil prices had impacted government finances, remittances from the diaspora and the balance of payments.

Chaudhuri, who spoke during the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Government, said while the nation’s debt is between 20 to 30 percent, rising debt service remains the bane of its numerous financial issues and growth.

Nigeria’s problem is that the debt service takes a big part of the government revenue,” he said.

He said, “Crisis like this is often what it takes to bring a nation together to have that consensus within the political, business, government, military, civil society to say, ‘We have to do something that departs from business as usual.’

“And for Nigeria, this is a critical juncture. With the contraction in GDP that could happen this year, Nigeria’s per capita income could be around what it was in 1980 – four decades ago.”

Nigeria’s per capita income stood at $847.40 in 1980, according to data from the World Bank. It rose to $3,222.69 in 2014 before falling to $2,229.9 in 2019.

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