- Cut Oil Production Cost or Stop Producing, FG Tells Firms
The Federal Government on Tuesday charged crude oil-producing companies operating in Nigeria to either cut down the cost of producing the commodity or allow it to remain in the ground.
The government stated that while the country’s target was to grow its crude reserves and production to 40 billion barrels and four million barrels per day, respectively, the cost of extracting the commodity from the ground was one of the highest globally.
This is coming as the Nigeria Extractive Industries Transparency Initiative announced that the country lost over $200bn in the past 10 years as a result of the non-passage of the Petroleum Industry Bill.
Speaking at a symposium on the Petroleum Industry Governance Bill organised by NEITI in Abuja, the Minister of State for Petroleum Resources, Ibe Kachikwu, stated that aside the many benefits of the PIGB, the bill would also help in addressing the cost of producing crude oil in the country.
Kachikwu, who was represented by one of his Senior Technical Advisers, Johnson Awoyemi, stated, “The bill will also address the issue of cost. Nigeria operates one of the highest costs of extraction among oil provinces in the world. It is clear and clearer that we either produce the oil at a good cost, or we leave it in the ground.”
The Federal Government had recently announced a crude production cost target of $15 per barrel, as the Nigerian National Petroleum Corporation on March 5, 2018 declared that it had brought down the cost of producing the commodity to $20 per barrel.
Kachikwu told participants at the symposium that the message was becoming clearer, adding that crude oil producers in Nigeria had to reduce their cost of production if the country was to be competitive in the modern low oil price world.
He stated that the long held aspiration of Nigeria’s upstream sector was to grow crude oil reserves to 40 billion barrels and production to four million barrels per day, improve local content, maximise the sector’s value and most importantly, derive as much revenue from gas as from oil.
“Now is the time to tweak the existing industry laws and come up with a new legal, institutional and commercial framework that will liberalise the petroleum industry as well as create a competitive business environment that will enhance Nigeria’s revenue,” the minister stated.
Kachikwu noted that the PIGB had gained considerable mileage with its passage by both the Senate and the House of Representatives.
This, he noted, had led to a wave of confidence in the industry, as millions of Nigerians believe that it would address the institutional, fiscal and regulatory uncertainties bedevilling the sector, bringing to an end the exacerbated decline in foreign investments in the country’s hydrocarbon projects.
NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually
Nigeria Liquefied Natural Gas Limited (NLNG) has announced a significant milestone in its operations, boosting its annual production of liquefied petroleum gas (LPG), commonly known as cooking gas, to over 1.5 million metric tonnes.
This surge in production underscores NLNG’s commitment to meeting the rising demand for clean cooking energy in Nigeria.
The entirety of NLNG’s 1.5 million tonnes production is now being sold domestically within Nigeria.
Moreover, the company has initiated a landmark shift by starting to supply LPG in naira, moving away from the traditional practice of trading in United States dollars.
This move aligns with calls from stakeholders in the oil and power sectors advocating for naira transactions, especially amidst the challenges posed by currency fluctuations.
During a panel session at the 7th Nigeria International Energy Summit in Abuja, NLNG’s General Manager of Finance, Fatima Adanan, highlighted the company’s dedication to enhancing LPG penetration across the country.
Adanan emphasized NLNG’s vision to make Nigeria a better place by promoting the use of cleaner energy sources like gas.
While NLNG’s production surge is commendable, Adanan acknowledged that Nigeria’s LPG requirements surpass the current output, necessitating imports to bridge the gap.
However, NLNG remains committed to expanding its production capacity to meet the nation’s energy needs and drive increased adoption of LPG as a cleaner cooking fuel.
CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%
The Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 400 basis points to a record 22.75%.
The decision made by the Monetary Policy Committee (MPC) comes amidst rising inflationary pressures and growing uncertainty in Africa’s largest economy.
Nigeria’s inflation rate rose to 29.90% in January 2024, the highest in over two decades while the nation’s unemployment rate quickened to 5% in the third quarter of 2023. Suggesting that the rising costs have continued to drag on both new job creation and the existing ones.
This coupled with a series of policy adjustments implemented by President Bola Ahmed Tinubu has plunged economic productivity and eroded consumer spending as citizens grapple with high fuel prices, electricity tariffs, a record-high foreign exchange rate, and insecurities.
Therefore, it is surprising that the Monetary Policy Committee (MPC) led by the CBN will further increase borrowing costs by 400 basis points at a time when job creation is paramount.
While the economy reportedly grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, this growth is yet to crystalise as businesses and citizens have taken to the street protest against the harsh economic situation.
Economic experts have started questioning the data from the National Bureau of Statistics (NBS) given its lack of correlation between the data and economic reality.
President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait
After two decades of anticipation, President Bola Tinubu, through his representative Vice President Kashim Shettima, inaugurated the long-awaited Geometric Power Plant in Aba, a significant milestone in the city’s quest for reliable electricity supply.
The event, which also saw the commissioning of three rehabilitated roads by Abia State Governor Alex Otti, symbolizes the culmination of years of perseverance and determination to transform Aba’s power landscape.
Addressing the audience, Vice President Shettima hailed the project as a testament to the power of visionary leadership and unwavering commitment to progress.
He said the Geometric Power Plant exemplifies the transformative impact of strategic infrastructure investments on local communities.
Governor Otti echoed similar sentiments, emphasizing the importance of the power project in positioning Aba as a hub for national and international business ventures.
He commended the efforts of Geometric Power Limited while urging them to uphold transparency and avoid exploiting consumers.
The inauguration of the Geometric Power Plant comes amidst growing concerns over Nigeria’s power infrastructure and the need for sustainable solutions to address electricity shortages.
The project, with a capacity of 188MW, holds promise for significant improvements in power supply across Abia State, benefitting nine out of seventeen local government areas.
The Managing Director of Geometric Power Limited, Ben Caven, underscored the scale of investment involved, totaling $800 million.
He highlighted the comprehensive nature of the project, which includes the installation of new power substations and a 27km natural gas pipeline, signaling a comprehensive approach to enhancing Aba’s energy infrastructure.
In conclusion, the inauguration of the Geometric Power Plant represents a transformative moment for Aba, offering renewed hope for economic growth and prosperity powered by reliable electricity supply.
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