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Protests Erupt in Turkey Over 100% Rise In Energy Bill

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Turkey protest

Burdened by inflation, 100 percent rise in gas prices and electricity bills since the year began, citizens of Turkey have taken to the streets and social media to protest their plights.

Protesters on the streets, who called on the government to revoke the recent price hikes in the energy bills, told the local media that they have had enough of the two to threefold increase in bills they received over the past month.

Investors King learned that Turkey is currently facing a shortage in nationwide gas delivery, as its major supplier, Russia is currently facing geopolitical tensions with neighbouring country, Ukraine. Its second supplier, Iran has cut gas supply to the country.

Last week, Iran notified Turkey of a 10-day halt to natural gas supplies, over harsh winter conditions affecting the Middle Eastern nation’s gas production.

With the Russian gas supply dwindling, the Iranian supply cut coming at a very bad time, Turkey with no replaceable supplier, has had to impose restrictions to limit gas use and cut electricity supplies for industrial sites.

At the beginning of the year, the country’s Energy Market Regulatory Authority (EPDK) announced that it has raised electricity prices by more than 100 percent for high-demand commercial users and businesses.

Turkish residents were not left out from the hike as their households’ electricity bills were raised by 50 percent.

According to Turkey’s national oil and gas distributor, BOTAŞ, the natural gas prices for residential use rose by 25 percent, and 50 percent for industrial use in January. The increment, BOTAŞ says, was 15 percent for electricity-generating industrial use.

The energy price hikes put more financial burden on the Turks, who currently are challenged by a 44 percent depreciation of the Turkish lira against the US dollar last year. This significantly reduced the citizens’ purchasing power, as well as annual inflation, which reached its highest level in 19 years at 36.1 percent in December 2021.

At the protest, many of the Turks pushed for President Recep Tayyip Erdoğan and his administration to resign or cancel the price hikes.

On social media, Turkish singer Yeşim Salkım posted a video on Twitter that shows her wrapped in a blanket in a dim room. Salkim lamented that she received a gas bill of TL 2,200 ($165/N68,600) in January.

“I’m wrapped in a blanket with only this one light on. Am I living in a country other than Turkey and just don’t know it? What are these price hikes? Are we in a dream or something? Somebody poke me and wake me up,” the singer says in the video.

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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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Nigeria’s Rig Count Surges by 23% in February 2024

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Oil

In February 2024, Nigeria’s oil and gas exploration activities surged with rig count increasing by 23% compared to the previous year.

The rig count, a crucial index measuring upstream activities, climbed to 16 rigs from the 11 rigs recorded during the same period in 2023.

This leap in exploration activities comes as a positive development for Nigeria’s oil and gas sector, indicating growing momentum and investor confidence in the industry.

Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), attributed this sustained surge to the positive impact of the recently enacted Petroleum Industry Act (PIA).

The PIA, with its provisions for institutional governance, efficient administration, and attractive fiscal regimes, has created a conducive environment for investment and operations in the country’s oil and gas sector.

Despite the remarkable increase in exploration activities, Nigeria’s crude oil production for the month declined to 1.32 million barrels per day (mbpd), compared to January’s output of 1.46 mbpd.

This decrease highlights the challenges faced by the Nigerian oil industry, including infrastructure constraints, security issues in oil-producing regions, and operational disruptions.

To further enhance exploration efforts, Komolafe announced a strategic partnership with TGS-Petrodata to acquire approximately 56,000 square kilometers of 3D Seismic Gravity data, focusing on the Niger Delta deep and Ultra Deep Offshore regions.

This initiative aims to mitigate risks associated with exploration in challenging environments, with investors financing the project and resulting revenues to be shared between the government and TGS.

Looking ahead, Komolafe expressed optimism about sustained growth in oil exploration activities throughout 2024, with plans for an upcoming oil licensing round, a critical step in implementing the nation’s PIA and driving further advancements in the oil and gas sector.

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NNPC Faces Mounting Subsidy Burden as Oil Prices Skyrocket

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Petrol - Investors King

The Nigerian National Petroleum Corporation (NNPC) is facing an increasingly daunting subsidy burden as oil prices continue to surge.

Investigation has revealed that escalating crude oil prices pose a significant challenge to Africa’s largest oil producer, placing immense pressure on the government’s finances and the state-owned NNPC.

Brent, the benchmark for Nigeria’s crude oil, has skyrocketed from an average of $77 in January to as high as $86 per barrel.

While this surge in oil prices could potentially boost funding for Nigeria’s 2024 budget, which is anchored on a benchmark of $77.96 per barrel, the country’s inability to meet production quotas hampers its capacity to capitalize on the revenue influx from oil sales.

One of the primary consequences of soaring oil prices is the ballooning petrol subsidy burden borne by the NNPC.

Despite the government’s imposition of a cap on petrol retail prices, the widening gap between the landing cost and the pump price necessitates substantial subsidies to sustain consumer affordability.

Charles Akinbobola, a Lagos-based energy analyst, elucidated that the combination of a higher exchange rate, elevated oil prices, and static petrol retail prices compounds the subsidy dilemma for Nigeria.

With the country’s limited refining capacity mandating the importation of all petroleum products, the subsidy burden further intensifies, straining NNPC’s resources.

The opacity surrounding the subsidy program, coupled with reports of NNPC’s utilization of Nigeria LNG dividends to fund petrol subsidies, raises concerns about transparency and accountability.

Faith Akinnagbe, an energy lawyer, emphasizes the urgency of disclosing NNPC’s subsidy expenditures to ensure public accountability and oversight.

As Nigeria grapples with the repercussions of surging oil prices, the NNPC faces an uphill battle in managing its burgeoning subsidy obligations amidst fiscal constraints and economic uncertainties.

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