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Nigeria’s Largest Oil Grade Back For Export

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NNPC

Two months after force majeure was declared on exports of Qua Iboe, the nation’s largest crude oil stream, ExxonMobil is offering a cargo of the grade to be loaded next month.

This is coming as the first offer since Mobil Producing Nigeria, a subsidiary of ExxonMobil, declared force majeure on the grade in July, sources told Reuters on Tuesday.

Force majeure is a legal clause that allows companies to cancel or delay deliveries due to unforeseen circumstances.

ExxonMobil declared force majeure on the grade in mid-July after a leak on the pipeline that feeds the oil to the export terminal.

Militant group, the Niger Delta Avengers, had said in July that it blew up the oil giant’s 48-inch crude export pipeline in Akwa Ibom State that feeds the Qua Iboe Terminal, which has capacity to export more than 300,000 barrels per day.

It was not immediately clear if the pipeline was already repaired, or if the company simply expected it to be back online in time to load the oil in October.

The cargo is offered for October 8-16 loading at a premium of $1.80 per barrel to dated Brent, sources said.

A spokesman for ExxonMobil said the force majeure remained in effect but did not give a time frame for the resumption of regular oil flows.

The Manager, Media and Communications, Mobil Producing Nigeria Unlimited, Mr. Oge Udeagha, had in July told our correspondent that the force majeure was declared due to a system anomaly observed during a routine check of the firm’s loading facility on July 14, 2016.

“We are working to ensure loading activities at the facility return to normal. The Qua Iboe Terminal is operating and production activities continue,” he had said.

Nigeria has struggled to maintain its crude oil production following a spate of militant attacks and technical problems that in May pushed production briefly to 30-year lows.

The country may be through the worst of the disruptions from militant attacks and other incidents that affected almost half its oil production last month, according to Bloomberg.

The volume of crude supplies subject to force majeure is diminishing after reaching almost 900,000 barrels per day last month.

Royal Dutch Shell Plc lifted the force majeure on Bonny Light crude last week and the Forcados grade, which had been offline since February, is expected to follow by the middle of the month.

Global oil benchmark, Brent, fell by three per cent or $1.07 on Tuesday to $47.25 per barrel after both the world’s consumers and producers revised forecasts that signalled the global crude glut persisting for much longer than previously expected.

The International Energy Agency, which advises oil-consuming countries on their energy policies, said a sharp slowdown in oil demand growth, coupled with ballooning inventories and rising supply, meant that the market would be oversupplied at least through the first half of 2017.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria Mulls Selling Electricity to Republic of Chad

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Nigeria Considers Selling Electricity to the Republic of Chad

The Federal Government is presently considering selling electricity to the Republic of Chad after a request was made by the neigbouring nation.

The federal government-owned Transmission Company of Nigeria disclosed this on Sunday, adding that a meeting was held last week to discuss the possibilities of plugging the Republic of Chad to the nation’s grid.

Nigeria presently exports electricity to three neighbouring nations, Benin, Togo and the Republic of Niger despite struggling with power supply at home and failed to up its power generation more than the current level of 3,000 -4,500 megawatts in recent years.

On Sunday, the total power generated declined to 3,474.5MW as of 6am, down from 3,776.5MW on Saturday, according to the latest data from the Nigerian Electricity System Operator.

The total number of idle plants rose from 8 on Saturday to 11 on Sunday. These idle plants were Geregu II, Sapele II, Alaoji, Olorunsogo II, Omotosho II, Ihovbor, Gbarain, Ibom Power, AES, ASCO and Trans-Amadi.

A total of twenty-seven plants were presently connected to the national grid, which is being managed by the TCN.

Meeting between Ministry of Power, TCN, and the Chadian Minister of Energy, Mrs Ramatou Mahamat Houtouin, to discuss the possibilities of connecting the Republic of Chad to the Nigerian national grid [was held] on Wednesday, October 21, 2020,” the TCN said on its Twitter handle on Sunday, alongside pictures of the meeting.

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Economy

Nigerians Turned to Chinese Products as Cost of US Goods Surged Amid Two Currency Devaluations this Year Alone

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Nigeria Imports More of Chinese Products in Second Quarter

The rising cost of American imports has forced importers and many households in Nigeria to embrace Chinese products as they struggle to adjust to two currency devaluations in one single year.

A recent report from the National Bureau of Statitics (NBS) shows that 31.41 percent of goods imported into the country in the second quarter were from China.

In the report titled ‘Foreign trade in goods statistics’ for second quarter of 2020, Spain led Nigeria’s exported nations for goods.

The report read in part, “Nigeria’s imports, by country of origin, shows goods were imported mainly from China (N1.26tn or 31.41 per cent), United States (N428.9bn or 10.66 per cent), India (N322.3bn or 8.01 per cent), and the Netherlands (N202.9bn or 5.04 per cent) respectively.

“The value of exports in Q2, 2020 stood at N2.22tn, a decrease of 45.64 per cent compared to Q1, 2020 and 51.73 per cent compared to Q2, 2019.

“The year to date export amounted to N6.3tn, representing a 31 per cent decline compared to 2019.

“Exports by section revealed that mineral products accounted for the largest portion of exports, amounting to N1.87tn or 84.35 per cent, mainly due to the crude oil component.”

The increase in Chinese import is likely due to the plunge in Naira against the US dollar and the general dollar scarcity that prevent importers from accessing the greenback. This, coupled with two devaluations of the local currency forced many businesses and mini-importers to embrace Yuan goods against the usual US dollar.

Further breakdown of the report showed that Nigeria export mostly to Europe with goods valued at N976.5 billion or 44 per cent exported in the second quarter. Asia followed with goods worth N734.1 billion or 33.08 per cent.

While African nations accounted for N401.4 billion or 18.1 per cent, America received N105.8 billion or 4.8 per cent export goods and Oceania imported N1.7 billion or 0.08 per cent from Nigeria during the period under review.

Within Africa, Nigeria exports goods valued at N149.3 billion to ECOWAS member nations.

While all regions recorded declines in the value of exported goods during the quarter, China and Japan recorded increased in export activity.

The NBS stated, “Exports by country of destination showed that Nigeria exported goods to Spain valued at (N310.8bn or 14 per cent), Netherlands (N243.7bn or 10.98 per cent), China (N220.4bn or 9.9 per cent), India (N195.6bn or 8.8 per cent) and South Africa (N172.2 or 7.7 per cent).

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Economy

FG Launches New N25bn Youth Fund to Address Some of the Concerns Raised by #EndSARS Protesters

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Zainab Ahmed

FG Introduces N25 Billion Youth Fund

The Federal Government has introduced a new N25 billion youth fund to address some of the issues raised by the Nigerian youths who took to the street to demand good governance, among others.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this at a stakeholder meeting held with the Deputy Governor of Kaduna State, Dr. Hadiza Balarabe, in Kaduna.

Ahmed said the fund would be increased from N25 billion to N75 billion within three years to ensure new job creation for the youths.

The meeting was constituted as part of the directive of President Muhammadu Buhari to ministers and governors to dialogue with stakeholders on some of the concerns raised by #EndSARS protesters.

The finance minister said the aim was to support the Nigerian youths to actualise their innovative and entrepreneurial minds in business and general development of the nation.

On her part, Balarabe said the essence of the meeting was to brainstorm on how to tackle security challenges faced during the #EndSARS protests.

Dr Mohammad Abubakar, the Minister of Environment, who was also at the meeting, reiterated Federal Government’s commitment to people-friendly policies and reforms.

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