Economy

Nigeria, Libya Eye Oil Output Increase Despite OPEC Decision

Published

6 years ago

December 14, 2017

Nigeria, Libya Eye Oil Output Increase Despite OPEC Decision

Less than two weeks after the decision by the Organisation of Petroleum Exporting Countries to extend oil production cuts, Libya and Nigeria – the only two exempt members of the group – are signalling their intent to raise output next year.

While several ministers at the November 30 meeting of OPEC had suggested the two nations join the output-curbing deal, both are working to add to their peak production from this year.

On Friday, an oil company Total said its new Egina field offshore Nigeria was on track to start next year – adding 10 per cent to the country’s production.

The field will have a capacity of 200,000 barrels per day and launch in the fourth quarter of 2018, counterbalancing production constrained by ageing pipelines, perpetual theft and sabotage.

“That could certainly change the dynamics,” said Ehsan Ul-Haq, head of crude and products at Resource Economist, a consultancy.

On Saturday, the head of Libya’s UN-backed government met the head of Libya’s National Oil Corp and the governor of Tripoli’s central bank to discuss how the corporation could get more cash to raise oil output next year.

The NOC received a quarter of its requested budget in 2017, hampering efforts to sustain oil output near 1 million bpd.

Any additional funds could help make crucial repairs to the country’s energy infrastructure, a regular target for militant attacks, and boost output above the roughly 1 million bpd mark where it currently stands.

Libya’s NOC has so far not spoken officially about the OPEC deal and declined a Reuters request for comment.

The developments may come as a surprise to market observers, who, after the November 30 meeting, believed Nigeria and Libya had agreed to participate in the OPEC agreement by imposing official caps at their peak 2017 production levels.

Instead, the two countries merely provided their production outlook for 2018 and an assessment that the combined total would not exceed 2.8 million bpd, their forecast output for 2017, two sources familiar with the matter told Reuters.

That outlook was dependent on both countries’ finances and security situation, one of those sources said.

The headline of a statement issued by Nigeria’s petroleum ministry on the day of the OPEC meeting stressed, in block capitals, that Nigeria and Libya were exempt from cuts.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, emphasised in the statement that the nation’s condensates – a form of ultra-light crude – were exempt from any total, giving it leeway in calculations. He also told local media there was “no obligation” to do anything.

Oil production from the two countries has averaged 1.7 million bpd and 900,000 bpd, respectively, this year according to Reuters assessments.

But it has swung in each country in a range of 340,000 to 350,000 bpd.

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Samed Olukoya

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

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Economy

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

Published

1 day ago

December 8, 2023

Investors King

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.

Economy

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

Published

2 days ago

December 7, 2023

Investors King

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.

Economy

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

Published

2 days ago

December 7, 2023

Investors King

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.