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Discos Refutes FG’s Claim of 2000MW Unutilized Power Generation Capacity

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Power - Investors King

The Nigerian Electricity Regulatory Commission (NERC) has refuted the continuous claim by the Federal Government (FG) of an unutilized 2000 megawatts (MW) of electricity capacity by the 11 electricity distribution companies (Discos) in Nigeria’s power market.

The Deputy Managing Director of Ibadan Disco, Mr John Ayodele, while speaking at a workshop by NERC in Abuja, on its eligible customers’ regulation, said such claims were according to daily records of power generated and transmitted to the Discos.

Ayodele explained that from the sector’s daily power broadcast, it was difficult to accept the existence of a 2000MW unutilized power generation capacity which the government claims exist because the Discos do not utilised all that is generated in the sector.

“I read the national broadcast and I am still asking myself: is there any stranded 2000 megawatts hiding behind the stories? And I can’t find, and this issue keeps coming up.

“When I look at all plants that are available, when you talk about installed capacity, it is different from capacity that can go on bar. I looked at the broadcast today on maximum generation available, capacity unbarred is 4666 megawatts, while we were generating about 4200 megawatts.

“Available generation that can be made available based on gas turbines that are down or undergoing repairs will never take us to having extra 2000 megawatts,” Ayodele said.

Ayodele, further asked the government to exempt hydro power generation companies (Gencos) from participating in the eligible consumers’ scheme, because according to him, they were not qualified by merit to be in it.

Again, he said that since hydro power Gencos were producing cheaply and their operators did not completely buy them off the government during the 2013 power privatization, there was no need for them to get involved with the eligible customers’ scheme.

“No hydro station should qualify. I believe that if we follow the rules as specified in the regulation, we should not have a problem. No Disco today can say it is against eligible customer because there is no reason why the Disco itself cannot be an eligible customer.”

Ayodele also said, “The merit order should be there, and hydros should be exempted from participating in this. What are they looking for? They are being dispatched 100 per cent, so what else do they want? Nothing because payment will follow, and payment guarantees has been given by the government and it is working. Let us use the rules the way they should apply.”

The Minister of Power, Works and Housing, Babatunde Fashola had earlier said the Federal Government is committed to invest N72 billion for the procurement and installation of equipment to help distribute unused 2000MW of electricity to consumers in the country.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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