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NNPC Posts N28.38bn Loss as Refineries Fail to Improve

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NNPC - Investors King
  • NNPC Posts N28.38bn Loss as Refineries Fail to Improve

The Nigerian National Petroleum Corporation posted a cumulative loss of N28.38bn, while the combined capacity utilisation of Nigeria’s three refineries failed to improve, the latest oil and gas report from the oil firm indicated.

An analysis of the report, which was released on Friday in Abuja, showed that the corporation recorded a loss of N14.12bn in February 2017, a marginal decline from the N14.255bn recorded in January.

Its cumulative year-to-date loss for 2017 was put at N28.38bn.

On the operational performances of the refineries in the month under review, the report stated that the combined capacity utilisation of the facilities dropped from 36.73 per cent in January to 29.06 per cent in February.

Nigeria’s three refineries are the Warri Refining and Petrochemical Company, the Port Harcourt Refining Company and the Kaduna Refining and Petrochemical Company.

Specifically, the WRPC posted the worst operational performance during the review month as its capacity utilisation plunged from 42.56 per cent in January to 4.7 per cent in February.

The PHRC and KRPC showed slight improvements, as their capacity utilisation increased from 38.51 per cent and 26.72 per cent to 40.73 per cent and 34.45 per cent, respectively.

The report said, “Total crude processed by the three local refineries (KRPC, PHRC and WRPC) for the month of February 2017 was 493,773 metric tonnes (3,620,344 barrels), which translates to a combined yield efficiency of 90.37 per cent compared to the crude processed in January 2017 of 691,122MT (5,067,307 bbls), which translates to a combined yield efficiency of 88.23 per cent.

“For the month of February 2017, the three refineries produced 331,236MT of finished petroleum products and 114,983MT of intermediate product out of 493,773MT of crude processed at a combined capacity utilisation of 29.06 per cent compared to 36.73 per cent combined capacity utilisation achieved in the month of January 2017.

“The operational performance is attributable to low crude oil available for production, which dropped by 19.07 per cent relative to last month total available crude oil for refining. The ongoing revamping of the refineries will enhance capacity utilisation once completed. The three refineries were active during the month.”

The corporation further said that the trading deficit of N14.12bn represents about one per cent improvement compared to N14.26bn recorded in January, 2017.

“The decrease in the deficit is mainly attributed to the improved upstream result,” it said.

The national oil firm added that “other factors that affected the overall NNPC’s performance included production shutdown of Trans Niger Pipeline and Nembe Creek Trunk Line due to pipeline leakages; shutdown of Agbami Terminal for mini-TAM and existing force majeure declared by the SPDC as a result of the vandalised 48-inch Forcados export line after the restoration on 17th October, 2016.”

It went on to explain that in January, 2017, crude oil production in Nigeria increased to 1.84 million barrels per day, amounting to a 16.51 per cent increase relative to the December 2016 production, but it lagged behind January 2016 performance’s by 14.52 per cent.

It said the Federal Government’s engagement with the militants had continued to enhance production.

“Pipeline sabotage in the country decreased from 60 downstream pipeline vandalised points in January 2017 to 49 in February 2017. This represents 18 per cent decrease relative to the previous month indicating that Federal Government and the NNPC’s continuous engagements with the stakeholders are yielding the expected outcome,” it added.

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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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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