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Domestic Airlines Owe Aviation Agencies N513bn, Says Minister

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First Nation Airline
  • Domestic Airlines Owe Aviation Agencies N513bn, Says Minister

The Minister of State, for Aviation, Senator Hadi Sirika, thursday said the total debts owed aviation agencies by Nigerian airlines were over N513 billion.

The minister who seemed angry with the airlines for kicking against the Single Africa Air Transport Market (SAATM), said Nigerian airlines have refused to grow, noting that they supported the liberation of African airspace when they felt that it would favour them, but they are opposing it now because they are still fragmented with lack of capacity.

The minister lamented that the airlines want the federal government to renege from its commitment to the Yamoussoukro Declaration, which is the liberation of Africa’s airspace because they know that they cannot compete effectively and urged them to come together.

The minister who spoke to journalists in Lagos at General Aviation Terminal (GAT) of the Murtala Muhammed Airport, Lagos said: “The airlines have refused to grow and the challenges are not caused by government. It is their own making. If I will advise them, let them get their acts together to focus, reorganise, reengineer, take advantage and be futuristic. They should see the bigger future; the bigger pie and organise themselves to take advantage of SAATM; rather than to sit here and whine at a train that is already moving.

“There is an airline that owes one of the agencies N13 billion. One airline owes several agencies and companies up to N500 billion; just one airline. That airline has been taken over. Is that how they will compete? I think it is getting their priorities right and by doing the business model that will get money for them that they will operate well. There is a lot they can do in aviation than just passenger scheduled services when they don’t have the capacity, experience and the business model,” Sirika also said.

On the Dana Air incident when the aircraft’s door fell off on landing at the Nnamdi Azikiwe International Airport in Abuja on Wednesday, the minister described the incident as traumatising, but noted that with the way the aircraft is designed, the door could not have fallen off while the aircraft is airborne because it is pressurised,
He apologised to the passengers who were in the flight when the incident happened and members of the public, saying investigation was ongoing and would be made public by weekend.

Sirika also disclosed that plans for a new national carrier were already at an advanced stage and its set up would drive the open sky treaty recently signed with 22 African countries.

He said proper roll out and its establishment would take place within the next few months, before the end of this current administration, adding that in the next one or two months maximum, both the outline business case for the transaction and the full business case for the national carrier would be rolled out, after which processes for the carrier’s set up will begin.

“I will say that we are very close to having the national carrier established. Certainly, it will be within the first term of this administration,” he said.

He said the national carrier is crucial to full implementation of bilateral agreements, especially SAATM; otherwise called open sky treaty, noting that the treaty, of which Nigeria signed with 22 African countries, is aimed at growth, development, more jobs, more security, more connectivity and passenger satisfaction at airports.

“Nigeria with 173 million people, the two-third of west Africa, will be one of the biggest beneficiaries. At the time Nigeria was pushing for this treaty, we had the Nigerian Airways to take advantage of it. Now we don’t have it and our airlines are, for one reason or the other, have not grown to that capacity and this is why government felt that we should set in motion a national carrier programme that will take advantage of the liberalisation and agreements for the benefit of the Nigerian people.

“I believe we are on the right course. I believe that this private sector led and driven airline when established will become the dominant carrier in Africa because the market is in Nigeria and it is central. So, Nigeria is at very vantage position to take advantage of this SAATM,” the minister said.

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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Aradel Holdings Reports 36% Increase in Crude Oil Production in Q1 2024

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Aradel Holdings Plc, a prominent player in Nigeria’s energy sector, has announced a significant upswing in its crude oil production, a notable milestone in its operational performance for the first quarter of 2024.

During their 29th Annual General Meeting held in Lagos, Aradel Holdings unveiled that their crude oil production surged by 36% to 13,250 barrels per day compared to the average figures recorded in the previous fiscal year.

This increase underscores the company’s strategic efforts to enhance its production capabilities and optimize operational efficiencies.

Accompanying this impressive growth in crude oil output, Aradel Holdings also reported a substantial rise in gas production, reaching 36.8 million standard cubic feet per day, which reflects a parallel 36% increase from the previous year’s averages.

Despite a slight decrease of 1.6% in refined petroleum products, the overall operational metrics for the first quarter of 2024 showcased robust performance across key production segments.

Chairman of Aradel Holdings, Ladi Jadesimi, emphasized the pivotal role of strategic initiatives implemented in preceding years, which contributed to the company’s exceptional growth trajectory.

“We are pleased with the strides made in Q1 2024, driven by enhanced production volumes and improved operational efficiencies,” stated Jadesimi during the AGM.

He highlighted the successful implementation of the Alternative Crude Evacuation system introduced in 2022, which significantly minimized crude losses and bolstered overall production stability.

In financial terms, Aradel Holdings reported a remarkable 90% increase in revenues for Q1 2024 compared to the same period last year, signaling strong market demand and effective resource utilization strategies.

Moreover, the company achieved a commendable 62% growth in Profit Before Tax (PBT), reinforcing its position as a leading player in Nigeria’s energy landscape.

Commenting on the company’s outlook, CEO and Managing Director Adegbite Falade expressed optimism about Aradel Holdings’ future prospects.

“Our performance in Q1 2024 underscores our commitment to sustained growth and operational excellence,” Falade remarked. “We remain focused on leveraging our strategic advantages and advancing our capabilities to meet evolving market dynamics.”

Aradel Holdings’ stellar performance in Q1 2024 also propelled the company’s market capitalization to exceed N1 trillion, a significant milestone in its corporate history.

This achievement underscores investor confidence and reflects Aradel Holdings’ robust position in the Nigerian stock market.

Looking ahead, Aradel Holdings aims to build upon its Q1 success by further enhancing production capacities, exploring new growth opportunities, and maintaining a steadfast commitment to operational efficiency and sustainability.

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Nigeria Adds 17 Deep Offshore Blocks to 2024 Oil Licensing Round

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The Federal Government of Nigeria announced on Tuesday the addition of 17 deep offshore oil blocks to the 2024 Licensing Round for oil fields.

This significant expansion is aimed at enhancing the nation’s crude oil production capacity and attracting more foreign and local investment.

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, disclosed this development during a pre-bid conference held in Lagos.

Komolafe said the decision was part of the commission’s ongoing efforts to derive maximum value from Nigeria’s abundant oil and gas reserves.

“In pursuit of the commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the commission has been working assiduously with multi-client companies to undertake more exploratory activities to acquire more data to foster and encourage further investment in the Nigerian upstream sector,” Komolafe stated.

The new additions come on the heels of recent bids for 12 oil blocks and seven deep offshore assets in the 2024 marginal fields bid round.

This follows the earlier 2022/23 mini-bid round that saw some deep offshore blocks put up for offer.

The Federal Government’s proactive approach signals its determination to capitalize on the country’s hydrocarbon resources.

Komolafe noted that additional data acquired on deep offshore blocks facilitated this expansion. “As a result of additional data acquired in respect of deep offshore blocks, the commission has added 17 deep offshore blocks to the 2024 Licensing Round. Further details on the blocks can be found on the bid portal,” he added.

To accommodate the expanded opportunities, the NUPRC has adjusted the 2024 Licensing Round schedule. The registration and submission of pre-qualification documents, initially set to close on June 25, 2024, has been extended to July 5, 2024.

The data access, purchase, evaluation, and bid preparation phase will commence on July 8, 2024, and close on November 29, 2024, as initially planned.

Komolafe also highlighted the importance of ensuring equitable participation and transparency in the bidding process.

To this end, the commission has sought and received approval from President Bola Tinubu, who also serves as the petroleum minister, to implement attractive fiscal regimes and minimize entry fees for both licensing rounds.

A cap has been placed on the signature bonus payable for the award of the acreages to promote a level playing field for all bidders.

“Since the criteria for the award of the oil blocks are now much more attractive than they initially were during the 2022/23 Mini Bid Round, it is in the interest of equity and fair play to give all investors the same opportunity to bid for the assets,” Komolafe asserted.

Furthermore, the NUPRC announced that the pre-qualified applicants from the 2022/23 Mini Bid Round would not need to undergo a new pre-qualification process for the 2024 Licensing Round. Their technical submissions remain valid, and they are encouraged to re-submit new commercial bids to benefit from the revised, more attractive criteria.

These applicants are also free to bid for the newly offered blocks in the 2024 Licensing Round.

The Federal Government’s expanded licensing round presents a lucrative opportunity for investors to participate in Nigeria’s burgeoning oil and gas sector. With the introduction of these 17 new deep offshore blocks, Nigeria aims to solidify its position as a leading oil producer on the global stage and stimulate economic growth through strategic energy sector investments.

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Brent Crude Falls to $84.12, WTI Rises to $80.19

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In a cautious market, oil prices showed mixed movements in Asian trade on Tuesday.

Global benchmark Brent crude oil, against which Nigerian oil is priced, experienced a slight decline of 13 cents, or 0.15%, to settle at $84.12 per barrel.

Meanwhile, U.S. West Texas Intermediate (WTI) crude oil saw a modest increase of 14 cents, or 0.17% to $80.19 per barrel.

The recent fluctuations come after both benchmarks posted significant gains of around 2% on Monday, marking their highest closing prices since April.

The market’s attention has now shifted back to fundamental factors, which have exhibited signs of softness for some time.

Francisco Blanch, a commodity and derivatives strategist at Bank of America, noted in a client note that global crude oil inventories and refined product storage in key locations such as the United States and Singapore remain elevated.

“The oil market shifted its focus back to fundamentals, which have been soft for some time,” Blanch stated, highlighting the broader concerns about global demand growth.

Data from the first quarter of the year indicated a deceleration in global oil demand growth to 890,000 barrels per day year-on-year, with further slowing likely in the second quarter.

Also, according to the country’s statistics bureau, China’s oil refinery output fell by 1.8% year-on-year in May due to planned maintenance and higher crude costs.

Market participants are also keenly watching for further indications on interest rates and U.S. demand trends, with several U.S. Federal Reserve representatives scheduled to speak later on Tuesday.

Despite the mixed signals, some analysts remain optimistic about the impact of OPEC+ supply cuts.

Patricio Valdivieso, vice president and global lead of crude trading analysis at Rystad Energy, said, “The latest guidance provided by OPEC+, as well as their unchanged 2.25 million barrels per day demand growth outlook, signals a stagnation in oil supply growth for 2024 and an apparent downside risk to production in 2025.”

Valdivieso further noted the disconnect between OPEC+’s demand outlook and those of other agencies, making it challenging to adopt a fully bearish stance on the market.

This sentiment has been reinforced by recent investor behavior, with hedge funds and other money managers purchasing the equivalent of 80 million barrels in key petroleum futures and options contracts over the week ending June 11.

Support for the market has also come from a rebound in refining margins, particularly in Europe and Asia.

Sparta Commodities analyst Neil Crosby pointed out that refining margins at a typical complex refinery in Singapore averaged $3.60 a barrel for June so far, up from $2.66 a barrel in May.

As the market navigates these dynamics, the cautious optimism among investors and analysts suggests a period of continued volatility and adjustment, with fundamental factors and policy decisions playing pivotal roles in shaping future price movements.

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