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Nigeria Makes Progress in Crude Oil Sale, Rakes Additional N363bn in Three Months

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Crude oil - Investors King

The Federal Ministry of Petroleum Resources has disclosed that Nigeria is recording success in oil earnings as a result of improvements in security in the Niger Delta region.

This is coming as the country made an additional N363bn from crude oil sales in the months of October, November and December 2022.

Recall that crude oil theft and pipeline vandalism in the Niger Delta region have been hampering efforts at making huge outputs in oil production.

Owing to Insecurity around the oil production region, the nation has been recording low oil earnings, a development that has been a worry to the Federal Government.

To nip the ugly development in the bud, President Muhammadu Buhari recently read a riot act to criminals and ordered security agencies to eradicate crude oil theft and pipeline vandalism in the Niger Delta before his administration winds-off.

Buhari promised to improve the country’s oil productivity before he leaves office in May, this year, stressing that he would not tolerate the criminality any longer.

Giving the directive through the Minister of State for Petroleum Resources, Chief Timipre Sylva, while addressing troops of the Joint Task Force Operation Delta Safe in Effurum, Delta State, and Port Harcourt, Rivers State, the President directed security agencies to up their game and ensure no litre of crude oil is stolen across the oil-producing states.

It was gathered that prior to the renewed efforts of the Federal Government in battling crude oil thieves, the nation’s daily crude oil production was about 900,000 barrels per day.

But with the recent improvements in security efforts, there has been an increase in oil output, as production has risen to about 1.5 million barrels per day, according to the statement.

“I am happy to hear that morale is high here. We were here a few months ago to hand over the mandate of Mr. President to you and that is to ensure that there is zero tolerance for crude oil theft in the region,” Sylva had said.

The increased output in oil production has improved the country’s earnings from crude oil sales, even though Nigeria still expends billions of naira as petrol subsidy.

While attesting to progress being made in tackling oil theft and pipeline vandalism, the petroleum ministry, in figures it released, disclosed that the country’s oil production appreciated by 1.014 million barrels per day in October, representing an increase of 0.077mbpd when compared to the 0.937mbpd output in September.

The statistics further revealed that in November, the country pumped 1.185mbpd crude, indicating an increase of 0.171mbpd when contrasted with the daily output in October.

Oil production increased in December, 2022, as Nigeria produced 1.253mbpd, a development which indicated an increase of 0.05mbpd when compared to its output in November.

According to data gotten from two international economic and statistical firms, Statistica and Countryeconomy, the average cost of Brent, the global benchmark for crude,
in the last three months of 2022, was $93.4/barrel, $89.62/barrel and $76.42/barrel respectively.

Since oil production in Nigeria rose by 0.077mbpd in October, this represents an increase of 2.387 million barrels in that month.

At an average crude oil price of $93.4/barrel in the review month, the country is said to have earned an additional $222.95m (N101.02bn, at the official exchange rate of N453.1$) in October last year.

In November, Nigeria’s oil production rose by 0.171mbpd, an equivalent of 5.13 million barrels in that month, while the average price of crude in the same month was put at $89.62/barrel.

As Nigeria’s oil earnings increased by $459.75m (N208.31bn at the Central Bank of Nigeria official exchange rate of N453.1/$), oil output from Nigeria grew by 0.05mbpd, representing 1.55 million barrels for December 2022, while the average cost of Brent was $76.42/barrel.

To this end, the Federal Government’s revenue from crude oil export last month grew by $118.45m (N53.67bn at the official exchange rate of N453.1/$).

 

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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Gas-Pipeline

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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