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Nigeria May Face Pressure as OPEC Meets Today



  • Nigeria May Face Pressure as OPEC Meets Today

As the Organisation of Petroleum Exporting Countries looks set for an extension of the deal reached last year to reduce oil production, Nigeria may face pressure to cut output as supply glut remains in the market, industry experts have said.

OPEC members and non-OPEC producers including Russia agreed in December to cut output by 1.8 million barrels per day for six months from January 1, 2017.

Nigeria and Libya were exempted from the cuts because their production had suffered disruptions on the back of unrest and militant attacks.

The cuts in production resulted in a significant rally in oil prices, with Brent crude, global oil benchmark, trading as high as $56 per barrel in February. But the rise in the United States’ crude output recently pared the gains.

The exemption of Nigeria and Libya from the cuts was also seen by some market watchers as a risk to the group’s efforts to curb a global crude glut as both have regained some volumes in recent months and are expected to add more soon.

OPEC will meet in Vienna on Thursday (today) to consider whether to prolong the original deal reached in December.

This is happening at a time when Nigeria and Libya are restoring output; Iraq plans new production projects and the US drillers continue to add rigs.

Militant attacks in the Niger Delta, which pushed Nigeria’s production to just over one million barrels per day at certain points last year, the lowest in decades, have abated since the start of this year.

The Chairman/Chief Executive Officer, International Energy Services Limited, Dr. Diran Fawibe, said Nigeria might come under pressure during the meeting to join others in cutting production.

“The minister representing Nigeria will have to make a strong case for Nigeria to be exempted. But it depends on how other member countries will view the case. We can only hope that they will continue to exempt Nigeria from the cuts at least for now,” he said

Fawibe said the country lost market share on the back of the resurgence of militant attacks on oil and gas facilities last year, adding, “What Nigeria is trying to do is to recoup the production losses.”

The Vice-President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, said, “It is more or less a given that there is going to be an extension of the cuts in production. The question is how much and who will participate?

“I think Iran is trying to get Nigeria to participate. Clearly, I think there will be some pressure on Nigeria to join the cuts, especially since they know now that Forcados has been reopened and I think flow stations will start flowing from next week.

“The likelihood is that there will be a stronger pressure that Nigeria should join the cuts, which could be trouble for the country. I don’t see us having to make very large cuts anyway.”

Oni, however, said as long as the cuts would translate to higher oil prices, Nigeria would still be in a good place.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had acknowledged that a fully-recovered Nigeria would likely be asked to share in the cuts, following the last OPEC meeting on November 30, 2016 when the production agreement was signed, according to Platts.

“I don’t expect that once you reach your volume you are going to have a free rein, so we probably have six months to get our act together and then hopefully zoom back out production and then we will be asked to contribute,” he told reporters.

The Chief Executive Officer, Oando Energy Resources, Mr. Pade Durotoye, told the Africa Independents Forum in London on Wednesday that the long-closed Forcados oilfield could be back to capacity by the end of June, enabling a return to nearly full production from the country.

“We think that the worst is behind us. Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd.”

OPEC heavyweights, Saudi Arabia and Iraq, agreed on Monday on the need to extend global cuts in oil supply by nine months in an effort to prop up crude prices.

The Saudi Energy Minister, Khalid al-Falih, said he did not expect any opposition within OPEC to extending the curbs for a further nine months, speaking after he met his Iraqi counterpart in Baghdad.

“We’re on the cusp of a rollover of the OPEC deal. We haven’t heard from Iran yet or how they plan to deal with Nigeria and Libya, which are coming back. If those two countries continue to recover, they have the ability to make up for the cuts made elsewhere,” the Director, Futures Division at Mizuho Securities USA Inc, Bob Yawger, was quoted by Bloomberg as saying.

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

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Inflation and Forex Mismanagement Drive Petrol Truck Prices from N7M to N25M



Petrol Importation -

The Chairman of the Independent Petroleum Marketers Association of Nigeria in the Satellite Depot branch, Akin Akinrinade, has raised an alarm over the rising cost of petrol trucks in Nigeria.

According to Akinrinade, the cost of a petrol truck has surged from N7 million in May to an astonishing N25 million at present, attributed to inflation induced by poorly managed foreign exchange rates.

Akinrinade pointed out that the forex mismanagement has significantly impacted the landing cost of premium motor spirit (PMS), commonly known as petrol, consequently leading to a surge in pump prices.

The unstable business environment, coupled with the astronomical rise in expenses, has created challenges for marketers in the downstream oil sector.

Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), highlighted in October 2023 that foreign exchange challenges have hindered private companies from importing petroleum products.

As a result, the NNPCL has become the exclusive importer of petrol.

The decision to limit private entities from importing fuel comes after President Bola Tinubu’s initiatives aimed at deregulating the fuel market.

Initially, the plan was to allow private companies to import fuel starting June 2023, aligning with efforts to balance the market after removing petrol subsidies.

The ripple effects of the soaring petrol costs are already evident, with commercial transporters increasing fares, and private car owners seeking fuel-saving alternatives.

As Christmas approaches, the surge in demand for interstate travel is expected to further elevate costs, posing financial challenges for many Nigerians amidst stagnant income levels.

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Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption




The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.

The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.

The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.

The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.

This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.

Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.

The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.

Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.

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Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion



power project

The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.

Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.

During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.

He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.

Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.

The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.

Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.

The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.

The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.

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