- Oil Prices Fall on Saudi Arabia Reassurance
Following Saturday’s drone attacks on Saudi Arabia’s largest crude oil processing plant that erased 5 percent of global crude oil production, Saudi Arabia has now stated that full production would be restored in the affected section of the Abqaiq plant.
Oil prices jumped almost 20 percent on Monday as traders predicted a tougher time for the world’s largest exporter of crude oil.
However, the kingdom has now reassured the market that it would restore production to the pre-attack level of 9.89 million barrels per day and that September commitments to customers would be fully met.
According to the new Energy Minister Prince Abdulaziz bin Salman, crude oil production would reach 11 million barrels per day by the end of this month while the Kingdom is projecting 12 million barrels per day for the month of November.
Brent crude oil, against which Nigerian oil is measured, declined from $69.23 a barrel recorded on Tuesday to $64.21, while the US West Texas Intermediate fell from $62.54 a barrel attained on Tuesday to $58.88.
Still, the market is pricing in further attacks due to the ongoing crisis in the middle east. Therefore, the experts are predicting short intermittent spikes, saying the uncertainty surrounding Saudi Arabia and Iran backed Houthi would henceforth disrupt oil outlook.
Carsten Fritsch, Commerzbank analyst, said: “The oil market is facing challenging times. Recent attacks on oil facilities in Saudi Arabia have painfully demonstrated the risks to oil supply, which is why short-term price spikes are possible at any time.”
PENGASSAN to Shut Down 200,000bpd Agip Oil
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), an oil workers’ union, is threatening to shut down 200,000 barrels per day of crude oil production managed by Agip Oil Company Limited over what it described as unfair labour practices and intimidation of workers.
The Union, in a letter released on Wednesday, gave Agip Oil seven days to look into the concerns raised by the union or have its operations disrupted.
In the letter signed by Lumumba Okugbawa, General Secretary, the Union also accused Agip Oil of “subtle threat against our members and demobilisation of members access to the company facilities.”
PENGASSAN also urged Agip Oil to withdraw its “toxic memo’ and open discussion with the union branch leaders with a view to discuss and resolve the issues and strengthen industrial harmony.
“However, as a law-abiding association, we view the insinuation by Agip management that the legitimate actions of the union was unlawful as laughable and a mockery of the relevant sections of the labour laws detailing on how industrial actions and disputes should follow.”
Gbajabiamila Says House of Reps Will Pass Petroleum Industry Bill in April
Femi Gbajabiamila, the Speaker of the House of Representatives, on Wednesday, said the Reps will pass the Petroleum Industry Bill (PIB) into law in April 2021.
The speaker disclosed this during his opening remarks at the ongoing public hearing on the proposed legislation organised by the House Ad-hoc Committee on PIB.
He said “We intend to pass this bill by April. That is the commitment we have made. Some may consider it a tall order, but we will do it without compromising the thoroughness.”
Gbajabiamila’s comment came two days after Ahmad Lawan, the Senate President, said the passage and assent to the Petroleum Industry Bill (PIB) will be done before the end of May.
Once passed into law, experts expect the bill to boost Nigeria’s economy, encourage competition and boost revenue.
Egypt Leads Nigeria, South Africa in Foreign Direct Investment
The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.
South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.
The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.
However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.
The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.”
UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.
“The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.”
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