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Nigeria Targets 40 Billion Barrels Oil Reserves by 2025

Nigeria’s current oil reserves stood at 37 billion barrels

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The Federal Government through the Ministry of Petroleum Resources has said it planned to up Nigeria’s oil reserves to 40 billion barrels by 2025 from its current 37 billion barrels.

Chief Timipre Silva, the Minister of Petroleum Resources, disclosed this on Tuesday at the official ground-breaking of the Oil Prospecting Licenses (OPLs) 809 and 810 at the Kolmani River II well located at a border community between Bauchi and Gombe states.

President Muhammadu Buhari inaugurated Kolmani Integrated Development Project with some top officials including governors, cabinet members, captains of industry and Nigerian National Petroleum Company Ltd. (NNPCL) officials, among others in attendance.

He said he was particularly excited at the partnership between NNPCL, Sterling Global Oil, and New Nigeria Development Commission (NNDC), to carry out the drilling campaign.

“This is a testimony of the fact that the hydrocarbons sector still holds promise of returns on investment, highlighting the role that this resource will continue to play in the global energy mix,” Sylva said.

He recalled that in 2019 when the NNPC announced that it had encountered oil in ‘commercial quantities’ at the Kolmani River well II, the nation celebrated the news as a fitting outcome for years of geological investigations.

“In spite of the enormity of challenges that NNPC was confronted with, the day has come when we can collectively witness and celebrate drilling for hydrocarbons in the North of our dear country,” he said.

He said the ministry was committed to finding and developing ways to end energy poverty, create shared prosperity and enthrone sustainable development.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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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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