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Board Sets 70% Local Content Target to Retain $14b

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Nigeria's Inflation Rate - Investors King
  • Board Sets 70% Local Content Target to Retain $14b

The Nigerian Content Development and Monitoring Board (NCDMB) has set an ambitious target of 70 per cent growth in local content over the next 10 years. This will enable the country to retain $14 billion from the $20 billion spent yearly in the upstream oil and gas industry.

When the Nigerian Content Law was enacted in 2010, local content in the industry was only five per cent but at the moment it stands at 26 per cent while what is retained in-country from the $20 billion spent yearly is $5 billion.

NCDMB Executive Secretary, Simbi Wabote, said in Lagos during on the sideline of the presentation of the upgraded Nigerian Oil and Gas Industry Content Joint Qualification System (NOGIC JQS), titled: Optimising the JQS functionalities for case of doing business with the board to industry stakeholders that the upgrade was meant to enhance the achievement of the set targets, adding that the targets are achievable.

With the robust NOGIC JQS, the NOGIC JQS portal would capture industry capacity, adequate categorisation, training, employment and expatriate quota management data.

Wabote said: “The NOGIC JQS portal will be sole system for Nigerian Content registration and prequalification of contractors in the industry after verification of contractors’ capacities and capabilities.

“It will ensure tender and expatriate quota management, proper record of issued Nigerian Content Equipment Certificate (NCEC), marine vessels categorisation, skills data bank.”

He added that indigenous and international oil companies (IOCs) will be compelled to make statutory submissions on it.

On the benefits of the upgraded NOGIC JQS, Wabote said on assumption of office, carrying out daily activities were cumbersome due to huge paper works. He said with the upgraded portal, the activities will be done electronically and will substantially reduce turnaround time, enhance internal efficiency and ensure transparency.

“It is in tandem with Federal Government’s Executive Order on Ease-of-doing Business and the 7Big Win, which are to boost transparency and stakeholder management, as well as government’s Economic Recovery Growth Plan (ERGP). It will also foster better institutional collaboration,” he said.

Wabote highlighted some of the achievements of the Board between 2010 and 2017 to include registration of 6800 service companies in the Board’s database, registration of 75,000 people on NOGIC JQS, receipt of 12,000 expatriate applications, and biometric capture of 3600 expatriates. Others are record of 2800 marine vessels, registration of 40 operating firms, issuance of 1200 Nigerian Content Equipment Certificate and registration of 550 marine vendors.

He said the workshop on the new JQS portal functionalities was meant to sensitise the industry and general public about the upgraded NOGIC JQS platform but with special focus on super-users and industry relevant stakeholders such as members of Petroleum Technology Association of Nigeria (PETAN), Oil Producers Trade Section (OPTS), Manufacturers Association of Nigeria (MAN), Nigerian Content Consultative Forum (NCCF) and Oil and Gas Trainers Association of Nigeria (OGTAN).

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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Crude Oil

Oil Prices Climb as Markets Eye Potential US Rate Cuts in September

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Crude oil - Investors King

Oil prices rose during the Asian trading session today on speculation that the U.S. Federal Reserve may begin cutting interest rates as soon as September.

Brent crude oil, against which Nigerian oil is priced, increased by 32 cents to $82.95 a barrel, while U.S. West Texas Intermediate crude oil climbed 34 cents to $80.47.

The anticipation of rate cuts stems from recent U.S. inflation and labor market data indicating a trend towards disinflation and balanced employment, according to ANZ Research.

The Federal Reserve is set to review its policy on July 30-31, with expectations of holding rates steady but providing clues for potential cuts in September.

The potential rate cuts could stimulate economic activity, increasing demand for oil. This optimism has been partially offset by recent concerns over China’s slower-than-expected economic growth, which could dampen global oil demand.

President Joe Biden’s announcement to not seek re-election and endorse Vice President Kamala Harris had minimal impact on oil markets.

Analysts suggest that U.S. presidential influence on oil production is limited, although a potential Trump presidency could boost oil demand due to his stance against electric vehicles.

In response to economic challenges, China surprised markets by lowering key policy and lending rates. While these measures aim to bolster the economy, analysts remain cautious about their immediate impact on oil demand.

With OPEC+ production cuts continuing to support prices, the focus remains on the U.S. Federal Reserve’s next moves.

Any decision to cut rates could further influence oil prices in the coming months, highlighting the interconnectedness of global economic policies and energy markets.

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Crude Oil

Dangote Refinery Clash Threatens Nigeria’s Oil Sector Stability

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Crude oil

Nigeria’s oil and gas sector is facing a new challenge as a dispute between Dangote Industries Limited and the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) intensifies.

The disagreement centers on claims by NMDPRA that diesel from the Dangote Refinery contains high sulfur levels, making it inferior to imported products.

The $20 billion Dangote Refinery, located near Lagos, has the potential to process half of Nigeria’s daily oil output, promising to reduce dependency on foreign fuel imports and create thousands of jobs.

However, the recent accusations have cast a shadow over what should be a significant achievement for Africa’s largest economy.

Industry experts warn that the ongoing conflict could deter future investments in Nigeria’s oil sector.

“Regulatory uncertainty is a major disincentive for investors,” said Luqman Agboola, head of energy at Sofidia Capital. “Any factor affecting foreign investment impacts the entire value chain, risking potential energy deals.”

The regulatory body, led by Farouk Ahmed, maintains that Nigeria cannot rely solely on the Dangote facility to meet its petroleum needs, emphasizing the need for diverse sources.

This position has stirred controversy, with critics accusing the agency of attempting to undermine a vital national asset.

Amidst these tensions, energy analyst Charles Ogbeide described the agency’s comments as reckless, noting that the refinery is still in its commissioning stages and is working to optimize its sulfur output.

In response, Dangote Industries has called for fair assessments of its products, asserting that their diesel meets African standards.

The refinery’s leadership argues that certain factions may have ulterior motives, aiming to stifle progress through misinformation.

As the dispute continues, the broader implications for Nigeria’s oil sector remain uncertain. The outcome will likely influence not only domestic production but also the country’s standing in the global energy market.

Observers hope for a resolution that supports both industrial growth and regulatory integrity, ensuring stability in a sector crucial to Nigeria’s economy.

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Crude Oil

Nigeria Pumps 236.2 Million Barrels in First Half of 2024

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markets energies crude oil

Nigeria pumped 236.2 million barrels of crude oil in the first half of 2024, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

This figure represents an increase from the 219.5 million barrels produced during the same period in 2023.

In January, Nigeria produced 44.2 million barrels of crude oil while February saw a slight dip to 38.3 million barrels, with March following closely at 38.1 million barrels.

April and May production stood at 38.4 million barrels and 38.8 million barrels, respectively. June’s output remained consistent at 38.3 million barrels, demonstrating a stable production trend.

Despite the overall increase compared to 2023, the 2024 production figures still fall short of the 302.42 million barrels produced in the same period in 2020.

This ongoing fluctuation underscores the challenges facing Nigeria’s oil sector, which has experienced varying production levels over recent years.

On a daily basis, Nigeria’s crude oil production showed some variability. In January, the average daily production peaked at 1.43 million barrels per day (mbpd), the highest within the six-month period.

February’s production dropped to 1.32 mbpd, with a further decrease to 1.23 mbpd in March. April saw a modest increase to 1.28 mbpd, which then fell again to 1.25 mbpd in May. June ended on a positive note with a slight rise to 1.28 mbpd.

The fluctuations in daily production rates have prompted government and industry leaders to address underlying issues.

Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), has highlighted the detrimental effects of oil theft and vandalism on Nigeria’s production capabilities.

Kyari emphasized that addressing these security challenges is critical to boosting production and attracting investment.

Kyari also noted recent efforts to combat illegal activities, including the removal of over 5,800 illegal connections from pipelines and dismantling more than 6,000 illegal refineries.

He expressed confidence that these measures, combined with ongoing policy reforms, would support Nigeria’s goal of increasing daily production to two million barrels.

The Nigerian government remains focused on stabilizing and enhancing oil production. With recent efforts showing promising results, there is cautious optimism that Nigeria will achieve its production targets.

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