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332,000bpd Crude Production Grows NNPC’s Profit by N12.13bn

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  • 332,000bpd Crude Production Grows NNPC’s Profit by N12.13bn

The Nigerian National Petroleum Corporation has recorded a trading surplus of N12.13bn, the monthly financial and operations report of the firm for December 2018, which was released on Sunday in Abuja, has stated.

According to the report, the profit by NNPC was due to the positive swing to higher revenue numbers posted by the corporation’s upstream subsidiary, the Nigerian Petroleum Development Company.

The 41st edition of the NNPC monthly report cited NPDC’s continuous revenue drive arising from recent average weekly production of 332,000 barrels of oil per day as the main driver of the positive outlook.

The NPDC targets 500,000bpd production in 2020.

The oil firm also observed that there appeared to be no let-up in the activities of vandals who in December last year pushed pipeline breaches across the country by a 34 percentage point.

Within the period, 257 pipeline points were vandalised, out of which one pipeline point failed to be welded and six pipeline points were ruptured. NNPC recorded 197 breaches on its pipelines in November last year.

Ibadan-Ilorin, Mosimi-Ibadan, and Atlas Cove-Mosimi network accounted for 90, 69 and 57 compromised points respectively or approximately 34 per cent, 26 per cent and 22 per cent of the vandalised points respectively.

Aba-Enugu pipeline link accounted for seven per cent, with other locations accounting for the remaining 11 per cent of the pipeline breaks.

The NNPC stated that 1.8 billion litres of Premium Motor Spirit, popularly known as petroleum, translating to 58.17 million litres/day were supplied in the month under review.

Overall, during the month, 1.96 billion litres of white products were distributed and sold by NNPC downstream subsidiary, Petroleum Products Marketing Company, compared with 1.09 billion litres in the market in November 2018.

This comprised 1.94 billion litres of PMS, 0.007 billion litres of kerosene and 0.014 billion litres of diesel. Total sale of white products for the period, December 2017 to December 2018, stood at 21.84 billion litres and PMS accounted for 20.17 billion litres or 92.36 per cent.

In terms of value, N241.46bn was made on the sale of white products by PPMC in December 2018, compared to N146.56bn sales in November 2018.

Total revenue generated from the sales of white products for the period December 2017 to December 2018 stood at N2.78tn, with PMS contributing about 89.63 per cent of the total sales with a value of N2.49bn.

In the gas sector, natural gas production increased by 12.22 per cent at 240.64 billion cubic feet compared to the output in November 2018, translating to an average daily production of 8,021.21mmscfd.

The daily average natural gas supply to gas power plants hiked by 5.36 per cent to 774mmscfd, equivalent to power generation of 3,131 megawatts.

Out of the 240.59bcf of gas supplied in December 2018, a total of 151.13bcf of gas was commercialised, consisting of 38.61bcf and 112.52bcf for the domestic and export market respectively.

This translates to a total supply of 1,245.48mmscfd of gas to the domestic market and 3,748.47mmscfd of gas supplied to the export market for the month, implying that 62.61 per cent of the average daily gas produced was commercialised while the balance of 37.39 per cent was re-injected, used as upstream fuel gas or flared.

Gas flare rate was 9.15 per cent for the month under review or 729.55mmscfd compared with average gas flare rate of 9.92 per cent or 777.37mmscfd for the period December 2017 to December 2018.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Stop Maize, Soybean Export to Reduce Scarcity – NIAL

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Stop Maize, Soybean Export to Reduce Scarcity – NIAL

The Nigerian Institute of Animal Science on Tuesday called on the Federal Government to halt the continued export of maize and soybean to reduce the scarcity of the commodities as well curb their price hike in Nigeria.

Registrar and Chief Executive Officer, NIAL, Prof. Eustance Iyayi, told journalists in Abuja that the poultry sector was currently hit by the severe scarcity of maize and soybean.

This, he said, was due to the continued export of the commodities, the COVID-19 pandemic, which had disorganised the international supply chain, lingering insecurity in the North-East, farmers/herders conflict and flooding in some parts of the country.

“Maize and soybean are being exported and this has exacerbated the situation leading to local scarcity and price escalation of the commodities in poultry production,” Iyayi stated.

He added, “The increasing prices of the essential commodities has resulted in the increase in price of finished feeds by about 75 per cent.

“This has led to the closure of small and medium sized poultry farms thereby threatening about 10 million jobs as a result of this scarcity.

“To set the poultry industry from total collapse, the institute urges the government to immediately halt the exportation of soybean and maize and grant import permit to importers at the official foreign exchange rate.”

Iyayi said there was shortage of soybean in Nigeria and other countries, stressing that the little amount being produced across the country should not be exported.

He said the current maize yield of about one to two tonnes per hectare being produced in Nigeria would not be enough to sustain the country.

The NIAL helmsman stated that the country should be producing between seven and 10 tonnes per hectare in order to meet the requirements for humans and animals.

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Economy

Petrol Landing Cost Jumps to N186, Oil Hits $64

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Petrol Landing Cost Jumps to N186, Oil Hits $64

Against the backdrop of the rising price of oil prices, the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.

Investors King had exclusively reported on February 9 that the landing cost of PMS rose to about N180 per litre on February 5 from N158.53 per litre on January 7.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N186.33 per litre on February 16, with the pump price of the product expected to be N209.33 per litre.

The international oil benchmark, Brent crude, closed at $63.96 per barrel on February 16, up from $59.34 per barrel on February 5.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.

Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).

The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.

The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).

Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.

The cost of petrol would be higher if the 410/$1 rate at which the naira closed on Monday at the Investors’ and Exporters’ Foreign Exchange Window was used. The naira closed at 480/$1 at the parallel market.

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

Oil marketers said recently that they were ready to resume importation of petrol if the foreign exchange was made available to them at a competitive rate.

“The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens,” the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said at a virtual press briefing.

Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.

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Economy

FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

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FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

The Federal Government has said about 100 million Nigerians will be lifted out of poverty through the National Gas Expansion Programme (NGEP).

The Minister of State for Petroleum Resources, Chief Timipre Sylva, disclosed this on Monday during the inauguration of the NGEP in Ado Ekiti, Southwest.

Sylva said the project was “a practical demonstration of President Muhammadu Buhari’s commitment to lift 100 million Nigerians out of poverty by using gas value chain as catalyst for social and economic development in Nigeria”.

The minister said, “The programme has its main objective to reinforce and expand gas supply as well as stimulate demand in Nigeria through effective and efficient mobilisation and utilisation of all available assets, resources and infrastructure in the country.

“The programme is geared towards the implementation of Mr President June 12, 2019 promise to take hundred million Nigerians out of poverty within the current decade by ensuring that locally produced, available, accessible and affordable fuel is sufficiently supplied across the country”.

Sylva added that Nigeria was richly endowed with mineral resources, specifically, hydrocarbons, crude oil and natural gas with proven gas reserves of over 200 trillion cubic feet of natural gas, which he said had presented the country with opportunity to use gas as a catalyst for social economy renaissance.

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