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NCC: Charges, Destruction of Telecoms Facilities, Will Hinder 30% Broadband Penetration

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  • NCC: Charges, Destruction of Telecoms Facilities, Will Hinder 30% Broadband Penetration

The Chairman, Board of Commissioners, Nigerian Communications Commission (NCC), Olabiyi Durojaiye has warned that indiscriminate charges on telecoms operations by various state governments, coupled with the destruction of telecoms facilities, will impede the planned achievement of 30 per cent broadband penetration, unless new measures are taken.

Durojaiye, who spoke during his keynote presentation at the 10th annual NigeriaCom conference, which held recently in Lagos, said other factors that could hinder the achievement of 30 per cent broadband penetration, were multiple taxation/regulation, Right of Way (RoW), arbitrary and indiscriminate charges, vandalisation of telecom infrastructure, poor power supply, among others.

He, however said the NCC would not relent in its efforts to ensure the attainment of 30 per cent broadband penetration by end of the year as enshrined in the National Broadband Plan (NBP).

He said although Nigeria has attained 22 per cent broadband penetration since last year, there were opportunities to achieve and surpass 30 per cent penetration by the end of the year, if all the identified challenges are addressed.

“The commission in its eight-point agenda, recognises the need to facilitate strategic collaboration and partnership with stakeholders in order to achieve the goal of access to all which naturally translates to economic power.

“In this regard the commission is constantly engaging with the National Executive Council (NEC), state governors and local government chairmen, community leaders and relevant agencies to make them understand the long-term benefits of reducing excess charges/levies, allowing unhindered access and deployment of infrastructure in their communities,” Durojaiye said.

“As part of our intervention efforts to create an enabling environment, the Commission engaged the Ogun State government and was able to secure the reduction of ground rent for BTS from N360 million to N120 million in favour of IHS, as well as the unsealing of 47 Base Transceiver Stations (BTS) shut down by some government agencies across the country,” the NCC boss added.

The NCC is also working hard to ensure the establishment of a ‘Telecommunications Critical Infrastructure Bill’ which would rank telecoms infrastructure as critical infrastructure, he said.

According to him, “As of now, Nigeria has about 10 terabytes undersea cable telecommunication capacity. The major obstacle has been the ability to deploy fibre infrastructure across the country.

“The need therefore for the licencing of Infrastructure companies (InfraCos) became inevitable. The commission has completed the licensing using the Open Access Model which is non-discriminatory, and which enables infrastructure sharing to bridge the gap and deliver very robust, fast and reliable broadband services in the country.

“This will help to stimulate other sectors of the economy and lead to economic growth.”

The commission, he said, had also established a financial inclusion desk to interface with the Central Bank of Nigeria (CBN) and other stakeholders in the digital financial ecosystem to deal with issues of policy and regulation as it affects financial inclusion.

The commission has offered Short Codes to CBN mobile payment service licensees free of charge to improve e-banking services, mobile money, among others, Durojaiye pointed out.

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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Crude Oil

Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

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The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

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Oil Prices Hold Steady as U.S. Demand Signals Strengthening

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Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

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Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

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Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.

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