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Nigeria’s Oil Exports to Fall to 2018 Low in July

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Adenuga
  • Nigeria’s Oil Exports to Fall to 2018 Low in July

Nigeria’s oil exports are expected to fall in July to 1.43 million barrels per day (bpd), according to the loading plans, the lowest level so far this year.

This is coming as loadings of Nigerian Bonny Light crude, which have already been under force majeure for a month, would likely be further delayed by the closure of Nembe Creek Trunk Line (NCTL) by the operator, Aiteo E & P.

The NCTL and the Trans Niger Pipeline (TNP) are the two major pipelines used by oil companies operating in the eastern Niger Delta to evacuate crude to the Shell-operated Bonny Export Terminal.

Investigation revealed that the NCTL is a major crude oil transportation channel that conveys crude injected from Oil Mining Leases (OMLs) 29, 18, 24, 25, 23 and 55; running from Nembe Creek in Bayelsa State through Cawthorne Channel Field on OML 18 to the Bonny Oil Terminal for export.

The pipeline has a capacity of 150,000 barrels per day at Nembe Creek, but can evacuate 600,000 barrels of liquids from the Cawthorne Channel end.

The 115-kilometre capacity line was built by Shell Petroleum Development Company (SPDC) between 2006 and 2010 at a cost of about $1.1 billion but is currently being operated by Aiteo Group since 2015 when Shell completed the assignment of its interest in OML 29 and the NCTL to Aiteo Eastern E&P Co. Ltd.

It was gathered that there have been recurrent thefts along the pipeline route, which are evidenced by significant pressure reductions on the trunk line, and theft points, which has affected Bonny Light exports.

Reuters reported that the export plan for Bonny Light comprised 48 cargoes, compared with 60 cargoes and a daily rate of 1.796 million bpd in June, largely as a result of an outage on the Bonny Light stream, which has been under force majeure for a month.

July’s export plan also includes four cargoes of Akpo condensate with 123,000 bpd, compared with four cargoes in June with 133,000 bpd.

The export plans showed one extra cargo of Agbami than in June, as well as one more Bonga cargo and an extra Qua Iboe cargo.

It also shows three fewer Forcados and one fewer Escravos, while a number of smaller streams showed no cargoes would load in July.

Nigerian oil export plans are prone to revisions and delays, with cargoes frequently pushed from one month to the next.

In a related development, the loadings of Nigerian Bonny Light crude, which have already been under force majeure for a month, would likely be further delayed by the closure of the Nembe Creek Trunk Line.

The Nembe Creek Trunk Line, which carries Bonny Light, was shut down at the weekend for repairs, according to the operator, Aiteo.

However, the Trans Niger Pipeline, which is a second line that carries Bonny Light remained open.

It was not clear when the Nembe Creek pipeline would reopen but traders said there were at least three tankers that were due to load Bonny Light this week and next, with oil deferred from the May loading programme.

But any liftings would likely be subject to delays of two to three days because of the pipeline closure, Reuters quoted oil traders as saying.

Shipments of Bonny Light remained subject to force majeure, according to a Shell spokesman Monday.

Exports have been under force majeure for a month following a leak further up the pipeline.

Between 30 and 33 cargoes are said to be available for sale from the 48 cargoes in the Nigerian July programme, which would likely keep differentials under pressure, traders 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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Economy

NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually

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cooking gas cylinder

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.

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Economy

CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%

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Dr. Olayemi Michael Cardoso

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.

 

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Economy

President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait

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Geometric Power Plant

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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