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Ogun State to Build N3bn Oil Refinery, Generates 110 Megawatts of Electricity

Ogun state will soon get an oil refinery of 100,00 barrels capacity per day

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Ogun state will soon get an oil refinery of 100,00 barrels capacity per day. The refinery which will be built in a major partnership with Gasoline Integrated International will also generate a culmination of 110 Megawatts starting from 37 Megawatts.  

Speaking on the development, the state governor, Dapo Abiodun noted that the oil refinery which will start with a production capacity of 100,000 barrels per day will be expanded to 400,000 productions in the future.  

The governor added that after completion, the refinery would create about 10,000 direct and indirect jobs. 

Investors King understands that the proposed refinery in Ogun State will be the second in the South West after Dangote Refinery situated in Lagos. 

When operational, both refineries will not just generate jobs but also ensure a steady supply of petroleum products within the region. 

It would be recalled that Dangote Refinery is the world’s largest refinery in single production with a production capacity of 600,000 barrels per day. Dangote Refinery is expected to begin operations within the first quarter of 2023. 

While speaking further on the new development, Governor Dapo Abiodun stated that the refinery which “would sit on 800 hectares of land” will increase the internally generated revenue of the state. 

He concluded that the project which is estimated to cost N3 billion will be completed in three years. 

Meanwhile, the Group Managing Director of NNPC, Mele Kyari has stated that selling fuel at the price of N170 per litre is no longer sustainable.

The GMD noted that market conditions such as high exchange rates have forced the landing cost of fuel to about three time the value of the pump price. 

While stating that subsidy cost NNPC about N19 billion per day, he noted that for some parts of the country, NNPC pays as high as N290 a litre as fuel subsidy. 

He added that the world is facing high costs of energy. He claimed that most countries have removed fuel subsidy and Nigeria should not be an exemption. 

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Crude Oil

Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO

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The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.

Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.

Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.

He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.

Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.

The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.

Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.

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Oil Prices Rebound in Asian Markets Amid Red Sea Shipping Concerns

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Amid escalating attacks on shipping in the Red Sea and growing uncertainty regarding U.S. interest rate cuts, oil prices rebounded in Asian markets today.

Brent crude oil, against which Nigerian oil is priced, climbed by 24 cents to $82.58 a barrel while the U.S. West Texas Intermediate crude oil (WTI) rose by 21 cents to $77.25.

The rebound comes after both Brent and WTI contracts experienced a 1.5% and 1.4% decline, respectively, from their near three-week highs on Tuesday.

This decline occurred as the premium for prompt U.S. crude futures to the second-month contract widened to $1.71 a barrel, its widest level in approximately four months.

However, on Wednesday, the premiums slid to 4 cents a barrel.

Analysts suggest that oil futures have entered a relatively range-bound phase, with current prices reflecting a risk premium of $6-7 per barrel.

The situation could persist until the next significant development in the Gaza crisis, whether it involves a de-escalation through a ceasefire or a further intensification of the conflict.

Recent attacks on vessels in the Red Sea and Bab al-Mandab strait by Yemen’s Iran-aligned Houthis have heightened concerns over freight flows through these critical waterways.

Moreover, Washington’s veto of a draft UN Security Council resolution on the Israel-Hamas war has added to geopolitical tensions impacting oil markets.

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Middle East Tensions Keep Oil Prices Near Three-Week Highs, China’s Economic Recovery Offers Support

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Oil prices remained close to three-week highs on Tuesday, buoyed by ongoing tensions in the Middle East and signs of economic recovery in China.

Brent crude oil, against which Nigerian oil is priced, dipped by 29 cents to settle at $83.27 a barrel while U.S. West Texas Intermediate (WTI) crude oil fell 38 cents to $78.08 a barrel.

Geopolitical uncertainties in the Middle East, particularly heightened by Iran-aligned Houthi attacks on shipping lanes, continued to influence market sentiment.

The Houthis’ recent strikes have targeted vessels in the Red Sea and Bab al-Mandab Strait, escalating concerns about disruptions to global shipping.

Meanwhile, China’s economic resilience served as a counterbalance to the geopolitical tensions. The country’s tourism revenue surged by 47.3% year-on-year, surpassing pre-COVID levels during the Lunar New Year holiday.

Also, China implemented a record cut to a benchmark mortgage reference rate to stabilize its property market and economy.

Despite these supportive factors, concerns about global oil demand lingered following a bearish report by the International Energy Agency (IEA).

The IEA revised its 2024 oil demand growth forecast downward, reflecting the ongoing transition to cleaner energy sources worldwide.

As such, market participants remain vigilant about the delicate balance between geopolitical risks and demand dynamics influencing oil prices.

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