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SNEPCo Paid N366bn to FG in 2018, Says MD

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Shell profit drops 44 percent
  • SNEPCo Paid N366bn to FG in 2018, Says MD

Shell Nigeria Exploration and Production Company Limited said it paid N366bn in 2018 as revenue to the Federal Government from its exploration activities.

The Managing Director, SNEPCo, Mr Bayo Ojulari, said the company also made a statutory payment of N2.1bn to the Niger Delta Development Commission last year.

Ojulari, according to a statement, spoke at the media launch of the 2019 edition of the ‘Shell in Nigeria Briefing Notes’, an annual publication detailing the activities of the business interests of the global energy giant in Nigeria.

According to Ojulari, the payments resulted from oil and gas production by SNEPCo’s flagship investment, Bonga, which is Nigeria’s first oil and gas project in water depths of over 1,000 metres.

“At the end of 2018, SNEPCo had produced 819 million barrels of oil from the Bonga field which translates into huge contributions to the Nigerian economy, in addition to the significant human capital development of deep-water expertise among Nigerians,” he said.

He noted that the pride of SNEPCo was the increase in its Nigerian workforce to over 96 per cent and the creation of Nigeria’s first oil and gas engineers with deep-water experience.

“The success story at Bonga is not only that it is Nigeria’s first deep-water project but the fact that Bonga is a Nigerian venture delivered by Nigerians using global expertise and processes offered by the Shell Group that have launched Nigeria into the league of notable deep-water players,” Ojulari added.

According to him, the company spent over N2.2bn on various social investment programmes in 2018.

He said, “Today, SNEPCo supports 298 undergraduates towards achieving their degrees with beneficiaries across the 36 states of Nigeria and another 375 scholars on full-board secondary school scholarship programme for pupils from public schools into seven top-flight private secondary schools across Nigeria to enhance access to quality education.”

Ojulari said the company was making progress with the 150,000-barrel-per-day-capacity Bonga South West Aparo, a new project in the Bonga field,

He noted that the head of terms agreement with partners was signed in February and invitation to tenders to contractors were released in the same month.

“We are working with our government and other partners to take the project to a point where we are able to take the final investment decision,” he said.

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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President Tinubu Defends Tough Economic Decisions at World Economic Forum

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Bola Tinubu

President Bola Tinubu stood firm in defense of Nigeria’s recent tough economic decisions during his address at the World Economic Forum in Riyadh, Saudi Arabia.

Speaking to a gathering of global business leaders, Tinubu justified the removal of fuel subsidies and the management of Nigeria’s foreign exchange market as necessary measures to prevent the country from bankruptcy and reset its economy towards growth.

In his speech, Tinubu acknowledged the challenges and drawbacks associated with these decisions but emphasized that they were in the best interest of Nigeria.

He described the removal of fuel subsidies as a difficult yet essential action to avert bankruptcy and ensure the country’s economic stability.

Despite the expected difficulties, Tinubu highlighted the government’s efforts to implement parallel arrangements to cushion the impact on vulnerable populations, demonstrating a commitment to inclusive governance.

Regarding the management of the foreign exchange market, Tinubu emphasized the need to remove artificial value elements in Nigeria’s currency to foster competitiveness and transparency.

While acknowledging the turbulence associated with such decisions, he underscored the government’s preparedness to manage the challenges through inclusive governance and effective communication with the public.

Moreover, Tinubu used the platform to call on the global community to pay attention to the root causes of poverty and instability in Africa’s Sahel region.

He emphasized the importance of economic collaborations and inclusiveness in achieving stability and growth, urging bigger economies to actively participate in promoting prosperity in the region.

Tinubu’s defense of Nigeria’s economic policies reflects the government’s commitment to making tough but necessary decisions to steer the country towards sustainable growth and development.

As the world grapples with geopolitical tensions, inflation, and supply chain disruptions, Tinubu’s message at the World Economic Forum underscores the importance of collaborative action and inclusive governance in addressing critical global challenges.

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Economy

IMF: Nigeria’s 2024 Growth Outlook Revised Upward – Coronation Economic Note

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IMF - Investors King

In its latest World Economic Outlook (WEO), the IMF revised its global growth forecast for 2024 upward to 3.2% y/y from 3.1% y/y projected in its January ’24 WEO.

Meanwhile, the growth outlook for 2025 was unchanged at 3.2% y/y. It is worth highlighting that global growth projections for 2024 and 2025 remain below the historical (2000-2019) average of 3.8%.

Persistence inflationary pressure, turbulence in China’s property sector, ongoing geopolitical tensions, and financial stress continue to pose downside risk to global growth projection.

There was an upward growth revision for United States to 2.7% y/y from 2.1% y/y. The upward revision can be partly attributed to a stronger than expected growth in the US economy in Q4 ‘23 bolstered by healthier consumption patterns; stronger momentum is expected in 2024.

Growth in China remains steady at 4.6% y/y. This is consistent with the projection recorded in its January ’24 WEO, as post pandemic boost to consumption and fiscal stimulus eases off amid headwinds in the property sector. We expect a loosening or a hold stance in the near-term as China continues to seek ways to bolster its economy.

On the flip side, GDP growth was revised downward (marginally) for the Eurozone to 0.8% y/y from 0.9% y/y (in its January ’23 WEO) for 2024. The growth projection for the United Kingdom was also revised downwards to 0.5% y/y from 0.6% y/y.

Russia’s growth forecast was revised upward to 3.2% y/y from 2.6% y/y (in its January ’24 WEO) for 2024. This revision was largely due to high investment and robust private consumption supported by wage growth.

The projection for average global inflation was revised upward to 5.9% y/y for 2024 from 5.8% y/y (in its January ’24 WEO), with an expectation of a decline to 4.5% y/y in 2025.

This is reflective of the cooling effects of monetary policy tightening across advanced and emerging economies.

Based on IMF projections, we anticipate a swifter decline in headline inflation rates averaging near 2% in 2025 among advanced economies before the avg. inflation figure for developing economies returns to pre-pandemic rate of c.5%.

This is driven by tight monetary policies, softening labor markets, and the fading passthrough effects from earlier declines in relative prices, notably energy prices.

We understand that moderations in headline inflation have prompted central banks of select economies to slow down on further policy rate hikes.

For instance, the US Federal Reserve may consider rate cuts three times this year if macro-indicators align with expectations. Also, the UK and ECB are likely to reduce their level of policy restriction if they become more confident that inflation is moving towards the 2% target.

The growth forecast for sub-Saharan Africa remains steady at 3.8% y/y for 2024. The unchanged projection can be partly attributed to expectations around growth dynamics in Angola, notably contraction in its oil sector, which was offset by an upward revision for Nigeria’s GDP growth estimate.

For Nigeria, IMF revised its 2024 growth forecast upward to 3.3% y/y from 3.0% y/y (in its January ’24 WEO). This revision partly reflects the elevated oil price environment. Bonny Light has increased by 14.6% from the start of the year to USD89.3/b (as at April 2024).

Other upside risks include relatively stable growth in select sectors, improved fx market dynamics as well as ongoing restrictive monetary stance by the CBN.

Nigeria’s headline inflation has steadily recorded upticks (currently at 33.2% y/y as of March ‘24). Our end-year inflation forecast (base-case scenario) is 35.8% y/y. The ongoing geopolitical tension could exacerbate supply chain disruptions, driving commodity prices, and exerting pressure on purchasing
power.

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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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