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Oil prices hit $50/barrel, first time since March

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Brent Crude price rose to $50.16/barrel at the close of trading on Thursday, showing a gain of over two per cent, while the WTI futures traded at $46.87/barrel.

The $50/barrel mark is the highest price area since March amid positive macros coming from COVID-19 vaccines.

Indeed, Brent crude traded at $50.34/Barrel and the US oil-based contract, West Texas Intermediate futures traded at $46.96/barrel.

This is good news to Nigeria and other oil producing nations (OPEC) whose economies run largely on oil revenue.

Meanwhile, after a week of contentious OPEC+ discussions, in which the UAE played a key role, it appears that the Abu Dhabi National Oil Company (ADNOC) is now aggressively pursuing market share.

The UAE was very vocal during the OPEC+ meeting about its resentment of having to carry the burden of COVID-19 demand destruction and the global energy transition. Abu Dhabi’s Crown Prince Mohammed bin Zayed and ADNOC’s CEO Sultan Ahmed Al Jaber have now clearly decided that it is time to reap the rewards of their large-scale oil and gas investments.

This announcement made by ADNOC that it has awarded US oil company Occidental an oil and gas exploration concession in its second competitive bidding round is a clear sign that the OPEC member is determined to increase production capacity to 5 million bpd by 2030.

Occidental will own 100% of the concession during the exploration phase and will be required to invest around $140 million to explore the 4,212 square kilometer project. This is the second concession given to Occidental by ADNOC. In February 2019, Occidental won Onshore Block 3 in Abu Dhabi’s first competitive bid-round.

According to the agreement, ADNOC will be able to own up to 65% of the concessions during their 35-year production phase. If successful, the ADNOC-Occidental joint venture could provide a much-needed boost to the nation’s oil output. Despite a brutal year for oil markets, ADNOC wants to increase its production capacity by 25% by 2030.

The ADNOC-Occidental news followed last week’s Abu Dhabi Supreme Petroleum Council’s announcement that recoverable unconventional oil reserves have increased by 22 billion barrels, and conventional reserves by two billion. It is expected that several other concession agreements for the 2nd bid round will be soon announced.

It is unclear which companies are favorites to win these concessions, but some Russian companies are expected to do well.

Railway

Just in: Nigerian railway suspends Abuja-Kaduna train services over safety

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The Nigeria Railway Corporation has announced the suspension of train services on the Abuja-Kaduna route.

It said on Thursday that the decision was taken for safety purposes after a section of the rail track was vandalised on Wednesday night.

Some Kaduna-bound passengers were reportedly forced to return to Abuja following the damage to the track.

An ex-senator representing Kaduna Central, Shehu Sani, had tweeted on Thursday that there was a bandit attack on an Abuja-Kaduna train he was travelling in and had a miraculous escape with other passengers.

But the Managing Director of the Nigerian Railway Corporation (NRC) Mr Fidet Okhiria, said it was an attack by vandals on the rail track.

The corporation said in a statement on its website on Thursday that train services had been suspended on Abuja-Kaduna route for the safety of passengers and crew members.

It added that efforts were being put in place to ensure maximum safety along the route.

It also further information about the suspension would be conveyed to the public later.

Daily Trust reported that hundreds of passengers were stranded at Rigasa Railway Station in Kaduna on Thursday morning.

The report stated that most of the passengers that booked ‎their train tickets online later resorted to travelling by road.

An NRC official at the station told the passengers that there was a problem with the train and so there would be no train.

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CBN introduces N500m entrepreneurship grants for graduates, undergraduates

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The Central Bank of Nigeria says it will support youths in tertiary institutions with grants to promote entrepreneurship and reduce unemployment and reduce the trend of graduates seeking white-collar jobs but turn their attention to the creation of jobs.

It said the initiative called Tertiary Institutions Entrepreneurship Scheme, would be executed in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs (gradpreneurs).

It stated this in a circular, titled ‘Guidelines for the implementation of tertiary institutions entrepreneurship scheme’, dated October 2021.

The apex bank stated that the goal of the TIES was to enhance access to finance to undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas.

The CBN stated, “The scheme is designed to create a paradigm shift among undergraduates and graduates from the pursuit of white-collar jobs to a culture of entrepreneurship development for economic development and job creation.”

The CBN said it would distribute N500 million among the top five tertiary institutions with the best pitch.

“Five top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas shall be awarded as follows: first place – N150m; second place – N120m; third place – N100m; fourth place – N80m; and fifth place – N50m,” it stated.

The apex bank stated that it ”shall constitute a Body of Experts (BoE) from the private and public sector for the biennial regional and national entrepreneurship competitions to evaluate entrepreneurial and technological innovations submitted by Nigerian polytechnics and universities. The Body of Experts (BoE) shall recommend projects with high potential and transformational impact for the grant award.”

It gave the key highlights of the scheme as projects financed under the Scheme shall be monitored by independent monitors jointly engaged by the CBN and PFI; would be operated for 10 years in the first instance (not exceeding 31st December 2031) depending on the complexity of the project; interest payment and principal repayment should be made on a monthly or quarterly basis by the obligor depending on the established cash flow cycle and in line with the approved repayment schedule.

 

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As cooking gas price rises further, kerosene, diesel drop

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As prices of cooking gas otherwise known as Liquefied Petroleum Gas (LPG) across Nigeria continue to rise despite significant increase in local production of the product, the average pump price of National Household Kerosene (NHK) has dropped to N400.01 per litre, representing a 7.9 per cent decline compared to N434.39 per litre in September this year.

Prices of Automotive Gas Oil (diesel) also fell by 0.16 per cent this week to N254.21 from N254.64 as of September ending 2021.

According to the latest report on the LPG by the Nigerian National Petroleum Corporation, the product supplied in September 2021 increased to 49,453.081 metric tonnes, MT, shows an increase of 23 per cent when compared to 38,040.457MT recorded in August 2021.

A survey by newstrends shows that 12.5 kilogramme of cooking gas, which was sold at N4,000 in January 2021, rose to N7,200 in August 2021 and currently N7,700.

On kerosene, latest data from globalpetrolprices.com indicated that as of this week, the price per gallon of kerosene stood at N1,514.20 while price per gallon of  diesel stood at N962.29.

When compared to statistics from National Bureau of Statistics (NBS) the kerosene and diesel watch for September, prices paid per gallon of the NKH fell by 1.73 per cent.

The NBS September report, “Average price per liter paid by consumers for National Household Kerosene increased by 8.6 per cent month-on-month and by 24.8 per cent year-on-year (YoY)  to N434.39 in September 2021 from N400.01 in August 2021.

“Similarly, average price per gallon paid by consumers for National Household Kerosene increased by 16.25 per cent MoM and by 25.3 YoY to N1, 540.82 in September 2021 from N1, 325.39 in August 2021.

“States with the highest average price per gallon of kerosene were Abuja (N2, 766.67), Bauchi (N1, 981.54) and Adamawa (N1,975.00).

“States with the lowest average price per gallon of kerosene were Delta (N1218.13), Imo (N1991.23) and Yobe (N1,080.00).”

On diesel, the NBS said, “Average price paid by consumers for Automotive Gas Oil (diesel) increased by 0.17 per cent MoM and by 15.9 per cent YoY   to N254.64 in September 2021 from N254.21 in August 2021.”

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