- Global Oil Exploration Spend Increases
Expenditure on oil and gas exploration and production (E&P) rose by eight per cent between 2017 and 2018, when the global oil industry was still climbing out of the price slump that affected its operations, the Secretary General of Organisation of Petroleum Exporting Countries (OPEC), Dr. Mohammed Barkindo, has disclosed.
Barkindo, said during a recent luncheon at the Center for Strategic & International Studies (CSIS) in Washington, United States, that the eight per cent increase in E&P expenditure for the two years was after it had fallen by an enormous 27 per cent in 2015 and 2016.
He stated this in a speech obtained by press.
He also hinted that it took OPEC and its allies led by the Russian Federation, approximately 18 months to rebalance the global oil market, and get it working for both producers and consumers which he claimed were happy with the work the group has done through its ‘declaration of cooperation’ framework.
According to Barkindo, oil producers and companies must invest heavily to offset the impact of natural decline rates.
He explained that the general consensus was that there was an annual decline rate of five per cent which then suggests that the industry needs to add over four million barrel a day (mbd) each year to just maintain current production levels.
“This is all brought home by the scale of the investment requirements. Oil-related investments across the upstream, midstream and downstream are estimated at around $11 trillion in the period to 2040.
“We also need to recall that exploration and production spending fell by an enormous 27 per cent in both 2015 and 2016, and only increased by eight per cent, in both 2017 and 2018,” said Barkindo.
He further stated: “This only adds to the worry that if our industry is concerned about policies that detrimentally impact oil and investments, with talk of stranded assets and declining values of oil; then we have a potentially dangerous scenario, one that could increase volatility significantly and lead to a future energy shortfall.”
Speaking on the ‘declaration of cooperation’ framework, Barkindo said: “It took us around 18 months to return OECD inventory levels to the five-year average, our stated metric.
“Moreover, when we saw conformity levels to the voluntary production adjustments overshoot in the middle of 2018, we were agile and flexible enough to modify course and stay ahead of the curve.”
He noted that OPEC and its allies were committed to their production cap agreement, adding: “When the market has appeared skewed to oversupply, we reacted accordingly, and equally, when concerns were expressed regarding demand outpacing supply, the partners in the ‘Declaration’ took the appropriate action.
“The ‘Declaration’ has had a transformational impact on the global oil industry. The change we have seen over the past two years or so is like night and day.”
“These noble efforts have not only received positive comments from producers; we have also heard positive comments from consumers too. To double down on a key message: sustainable oil market stability benefits us all.
“Let me stress that we take a very measured approach through the ‘Declaration of Cooperation’ – we look at the market outlook, we listen to consumers and other stakeholders, and I assure you that we are focused on the interests of the global economy,” he explained.
In terms of current market conditions, he stated that since the beginning of the year, the market has been slowly, but steadily moving towards a more balanced state and market sentiment has cautiously improved.
“But we still believe we need to see inventory levels drop further. We also recognise the fact that underlying risks remain, such as ongoing trade negotiations, monetary policy developments, as well as increasingly complex geopolitical challenges,” he noted.
Lafarge Africa Board Proposes N30.60bn Dividend, Lower Than Previous Year
Lafarge Africa’s Board of Directors has recommended a dividend payout of N30.60 billion for the year ended December 2023, a reduction from the previous year’s dividend.
The proposed dividend translates to N1.90 per unit of shares and awaits approval from shareholders at the upcoming Annual General Meeting (AGM) of the company.
In a corporate announcement filed with the Nigerian Exchange Limited, Lafarge Africa disclosed that the proposed dividend is payable from the Pioneer Reserve to shareholders registered as of March 28, 2024.
Despite the lower dividend proposal, Lafarge Africa recorded an increase in revenue to N405 billion, marking an 8.6% rise from the previous year’s N373 billion.
However, the company’s post-tax profit experienced a 4.7% decline, amounting to N51.14 billion, attributed mainly to the devaluation of the naira.
Lolu Alade-Akinyemi, the Chief Executive Officer of Lafarge Africa, expressed confidence in the company’s performance despite economic challenges.
He highlighted the growth in revenue and an improved operating margin, despite pressures from inflation and currency devaluation.
Looking forward, Lafarge Africa remains optimistic about the construction sector’s growth in Nigeria, despite prevailing economic challenges.
The company aims to leverage its market opportunities while maintaining a focus on sustainability and stakeholder value.
South African Billionaire Christo Wiese Predicts Return of Major Players to Nigeria Despite Recent Exodus
South African billionaire Christo Wiese remains optimistic about Nigeria’s economic prospects, predicting the eventual return of major players despite a recent exodus from the West African nation.
In an interview with Bloomberg TV, Wiese explained that it is impossible to ignore Nigeria’s large and growing population, “how do you ignore an economy like this?”
Wiese, the former chairman of Shoprite Holdings Ltd., acknowledges the challenges faced by businesses in Nigeria, where recent currency woes and policy missteps have contributed to an exodus of international companies.
Procter & Gamble Co. and Shoprite are among the global conglomerates that have announced their departure from Africa’s most populous nation.
However, Wiese sees the recent exits as temporary setbacks rather than a long-term trend. He believes that the allure of Nigeria’s vast consumer market and its economic potential will eventually draw major players back.
Despite the current uncertainty, Wiese remains confident in Nigeria’s future, emphasizing the need for governments to adopt correct policies and for investors to exercise patience.
While acknowledging Nigeria’s single-commodity economy vulnerabilities, Wiese highlights the resilience of the nation’s economy and its potential for growth and development.
He suggests that foreign investors, including South African ones, are adopting a wait-and-see approach, anticipating a time when the economy stabilizes and favorable policies are in place.
Seplat Energy Names Udoma Udo Udoma as Independent Non-Executive Chairman, Bello Rabiu as Senior Independent Non-Executive Director
Seplat Energy, a prominent Nigerian energy company listed on the Nigerian Exchange Limited and the London Stock Exchange, has made significant changes to its board leadership.
In a recent announcement, the company revealed that Udoma Udo Udoma has been appointed as the new Independent Non-Executive Chairman, succeeding Basil Omiyi, who is set to retire on March 31, 2024.
Udoma Udo Udoma, a distinguished lawyer and seasoned board administrator, brings a wealth of experience to Seplat Energy.
He holds degrees from St. Catherine’s College, Oxford, and has had a remarkable career spanning various sectors, including petroleum, energy, and natural resources.
Udoma has served on numerous large-sized company boards, including UAC Nigeria Plc and Union Bank Plc, and held key public sector appointments, such as Chairman of the Corporate Affairs Commission and Minister of Budget & National Planning.
In addition to Udoma’s appointment, Seplat Energy announced the selection of Bello Rabiu as the new Senior Independent Non-Executive Director, effective April 1, 2024.
Rabiu, a seasoned professional with extensive experience in the petroleum industry, holds multiple degrees and has served in various capacities at the Nigerian National Petroleum Corporation (NNPC).
The appointments come as part of Seplat Energy’s commitment to upholding strong corporate governance practices and ensuring a smooth transition of leadership.
Both Udoma Udo Udoma and Bello Rabiu are expected to play pivotal roles in guiding Seplat Energy as it continues to expand its operations and consolidate its position as a leading energy company in Nigeria and beyond.
In a statement, Basil Omiyi, the outgoing Chairman of Seplat Energy, expressed confidence in the newly appointed leaders, emphasizing their capabilities to steer the company towards further growth and success.
The appointments underscore Seplat Energy’s dedication to fostering excellence and innovation in the energy sector while meeting the evolving needs of its stakeholders and contributing to Nigeria’s energy transition efforts.
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