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Nigeria, SA Top African Airlines’ Passenger Traffic Record

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  • Nigeria, SA Top African Airlines’ Passenger Traffic Record

African airlines recorded 11.2 per cent in March 2018, indicating the regional carriers currently enjoy very strong demand compared to the same period last year.

The International Air transport Association (IATA) said this is more than twice the five-year average pace of 4.8 per cent, noting that airlines in Africa are seeing healthy growth on routes to/from Europe and Asia, while the region’s two largest economies, Nigeria and South Africa continue to improve.

According to IATA, capacity climbed 6.7 per cent, and load factor strengthened 2.9 percentage points to 71.0 per cent.

IATA said global passenger traffic results for March 2018 showed that demand (measured in revenue passenger kilometers, or RPKs) rose 9.5 per cent, compared to the same month a year ago, the fastest pace in 12 months. The world body noted that capacity (available seat kilometers, or ASKs) grew 6.4 per cent and load factor climbed 2.3 percentage points to 82.4 per cent, which set a record for the month, following on the record set in February. All regions except for the Middle East posted record load factors.

“Demand for air travel remains strong, supported by the comparatively healthy economic backdrop and business confidence levels. But rising cost inputs—particularly fuel prices—suggest that any demand boosts from lower fares will moderate going into the second quarter,” said IATA’s Director General and CEO, Alexandre de Juniac.

March international passenger demand rose 10.6 per cent compared to March 2017, which was up from 7.4 per cent year-over-year growth recorded in February.

IATA said all regions showed strong increases and total capacity climbed 6.6 per cent, and load factor improved 2.9 percentage points to 81.5 per cent.

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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Brent Crude Nears Seven-Week Highs as Market Eyes US Inventory Report

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Brent oil, the international benchmark for Nigerian crude oil, remained steady on Thursday, hovering just below seven-week highs as the escalating conflict in the Middle East raised concerns over potential supply disruptions.

At the same time, the market eagerly awaits U.S. inventory data for further indications of demand trends.

August Brent crude rose 28 cents, or 0.3%, to $85.35 a barrel while the U.S West Texas Intermediate (WTI) oil gained 13 cents, or 0.2%, to $81.70 a barrel.

“There was no WTI settlement on Wednesday due to a U.S. public holiday, which kept trading subdued,” noted Ricardo Evangelista, an analyst at ActivTrades.

“However, oil prices are likely to remain supported around current levels due to a growing geopolitical risk premium driven by conflict in the Middle East.”

Israeli forces have intensified their operations in the Gaza Strip, targeting areas in the central region overnight while tanks advanced into Rafah in the south.

The escalating violence has heightened fears of a broader conflict that could impact oil supplies from the region.

“Expectations of an inventory build appear to be overshadowing fears of escalating geopolitical stress for now,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

Investors are keenly awaiting the release of U.S. inventory data from the Energy Information Administration (EIA) later on Thursday, delayed by a day due to the Juneteenth holiday.

An industry report released on Tuesday by the American Petroleum Institute (API) indicated that U.S. crude stocks rose by 2.264 million barrels in the week ending June 14, while gasoline inventories fell, according to market sources.

The summer season typically sees an uptick in oil demand due to increased refinery runs and weather-related risks.

“Ongoing production cuts by the OPEC+ group, combined with seasonal demand, should tighten oil balances and lead to inventory draws during the summer months,” J.P. Morgan commodities analysts wrote.

Refining margins have also improved, with the ICE gasoil futures premium to Brent crude jumping to $20.63 a barrel on Wednesday, a two-month high.

“Firmer fuel refining margins provide a healthy dose of encouragement for those expecting improvements on the demand side,” commented Tamas Varga, an analyst at PVM.

In other economic news, the Bank of England’s decision to keep its main interest rate unchanged at a 16-year high of 5.25% ahead of the national election on July 4 has been noted by market observers.

Higher interest rates generally increase the cost of borrowing, which can slow economic activity and dampen oil demand.

As the market braces for the upcoming EIA inventory report, analysts and traders are closely watching for any signals that could influence oil prices in the near term.

The delicate balance between geopolitical tensions and supply-demand fundamentals continues to play a critical role in shaping the oil market landscape.

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Crude Oil

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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