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Total Urges Nigeria to Issue Exploration Licences

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Heritage Oil - Investors King
  • Total Urges Nigeria to Issue Exploration Licences

The Chief Executive Officer of Total, Patrick Pouyanne, has called on Nigeria to issue new exploration licences, saying the country’s oil and gas sector has been dormant in recent years in terms of exploration and new projects due to uncertainties and the ongoing discussions over oil industry regulation.

“I hope the new government that will come after the election will launch new tenders for awarding new exploration licences,” Pouyanne said on Monday.

He said the French oil group would approve plans to proceed with the Ikike project in Nigeria in the coming months, and also aimed to expand its liquefied natural gas project in the country.

Total is one of the strongest players in the African oil sector, holding more proven reserves on the continent than any of the other top global oil companies.

The 60,000 barrels-per-day Ikike project is one of several projects the group has earmarked in Nigeria for a final investment decision, including the 70,000 bpd deepwater Preowei project, which would help Total increase its oil production.

“There is a huge potential in Nigeria, it is probably the most prolific country in West Africa in terms of oil and gas and it is time to launch new projects and we are working on many of them,” Pouyanne told journalists.

He was speaking on the sidelines of a meeting of Nigerian and French businesses in Paris.

This month, Total started production at the Egina deepwater oilfield off the coast of Nigeria.

“On the same area as Egina, we have Preowei, which could be connected to Egina, We are working on that,” Pouyanne said.

Total also planned to expand its Nigerian LNG project this year, he said.

“The market is very good today to do that; it is a very interesting project and the partners are in line to develop it… 2019 should be the year of expanding Nigeria LNG,” he added.

Nigerians will vote on February 16 in a presidential election with incumbent President Muhammadu Buhari seeking a second term.

Total is also developing Uganda’s first oilfield with China’s CNOOC and Pouyanne said the company would make a final investment decision this year on whether to start production. Uganda has said it expected to start producing oil in 2021.

Pouyanne said he recently told Ugandan President, Yoweri Museveni, that Total would also be willing to take a stake in a refinery to process crude from the field which is due to be built and operational by 2023.

Uganda signed a deal with a consortium, including a subsidiary of General Electric, to build and operate a 60,000 bpd refinery that will cost $3bn-$4bn.

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

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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