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New Refineries to Overrun Inefficient Plants by 2024

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  • New Refineries to Overrun Inefficient Plants by 2024

An increase in the number of new refining capacity, expected to extend till the end of 2024, signifies major competition ahead for the oil industry, with possible shutdowns, the International Energy Agency (IEA), said in its Oil 2019 Report.

The IEA noted specifically that such a capacity expansion will require shutdowns to balance, estimating that 4.3 million barrels daily (b/d) should theoretically be closed by 2024, so that the new additions do not exceed the products demand growth.

As it were, shutdowns of Nigeria’s local refineries appear imminent as operating deficit rises to N132.5billion.

With Dangote Refinery expected to commence operations within the timeline with a capacity of 650,000 b/d of crude oil, Nigeria’s existing refineries may cease to operate having continued to record huge deficit over the years.

Indeed, the Refinery is touted to have the capacity to meet 100% of the domestic requirement of all liquid petroleum products (Gasoline, Diesel, Kerosene and Aviation fuel), leaving the surplus for export.

Besides, new data from the Nigerian National Petroleum Corporation (NNPC) showed on Tuesday, that the operating deficit recorded by the nation’s refineries rose by 39 per cent to N132.5billion in 2018, compared to the previous year.

The refineries posted a loss of N95.09billion in 2017, according to the NNPC data.

The refineries, which are located in Port Harcourt, Kaduna, and Warri, have a combined installed capacity of 445,000 b/d, but have continued to operate far below the installed capacity for many years.

Port Harcourt refinery, which did not process any crude oil in seven months, recorded the biggest loss of N59.96billion in 2018.

Kaduna refinery, which was idle for 11 months, lost N31billion, while Warri refinery recorded a deficit of N41.71billion, according to the NNPC.

A total of N13.58billion was lost in January; N8.05billion in February; N11.88billion in March; N20.08billion in May; N14.51billion in June; N10.45billion in July; N10.79billion in August; N6.97billion in September, N9.32billion in October, N9.58billion in November and N17.31billion in December.

The refineries made a profit of N6.32billion in April, for the first time in 10 months.

It was observed that Warri refinery was idle in January, September and October 2018.

The NNPC, in its monthly report released on Tuesday, said its group operating revenue for December stood at N731.88billion, N439.59billion higher than the previous month performance, while expenditure surged by N429.52billion.

According to the IEA report, as much as 9.1 million b/d of net additions will come on line by the end of the forecast period in 2024, which is twice the size of the growth in demand for refined products.

“Almost two thirds of the new capacity, as well as two thirds of refined products demand growth, will be in Asia,” the IEA said.

New refining capacity in the Middle East and Asia accounts for 78% of global additions, the report added.

The new additions include the Al-Zour refinery in Kuwait, and capacity addition at Kuwait’s Mina Abdulla, the Jazan refinery in Saudi Arabia, expansions at Iran’s refineries, and restoration of war-damaged facilities in Iraq as well as some greenfield projects.

The agency revised its forecast of refining capacity additions “due to a more aggressive Chinese expansion,” with net global additions now 1.9 million b/d higher than in its Oil 2018 report.

“It is the arrival of the three large independent players that signifies a major change in China’s refining landscape,” the report said, citing the large petrochemical-oriented refineries built by Hengli, Rongsheng and Shenghong Groups in the coastal Liaoning, Zhejiang and Jiangsu provinces.

China will become the leader “in terms of installed refinery capacity” by 2024, as a “U.S. Gulf Coast-type refining hub is emerging along China’s northeast coast,” the IEA said, adding, “Overall, China’s refining capacity additions will be almost double the size of total demand growth.”

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.

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FG Reopens Osubi Airport Warri for Daylight Operations

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FG Reopens Osubi Airport Warri for Daylight Operations

The Federal Government on Monday said the Osubi Airport in Warri has been reopened for daylight operations.

The Minister of Aviation, Hadi Siriki, disclosed this in a tweet.

The airport was closed in February 2020 over mismanagement and debt allegation involving aviation service providers and airport management.

However, Oberuakpefe Afe, a lawmaker representing Okpe/Sapeie/vaie federal constituency, recently moved a motion for the Federal Government through the ministry of aviation and relevant authorities to reopen the airport for flight operations.

On Monday, Hadi Siriki said “I have just approved the reopening of Osubi Airport Warri, for daylight operations in VFR conditions, subject to all procedures, practices and protocols, including COVID-19, strictly being observed. There will not be need for local approvals henceforth.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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