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NNPC projects $1tn loss in global oil production by December

The Nigerian National Petroleum Corporation has estimated global losses from exploration and production activities due to slowing demand for crude oil amid the COVID-19 pandemic will hit about $1 trillion by the end of 2020.
Group Managing Director of the corporation, Mallam Mele Kyari, who stated this on Tuesday at the Nigerian Association of Petroleum Explorationists (NAPE) 2020 Conference, also reiterated the plan of the NNPC to reduce production cost per barrel to $10 by 2021.
The theme of the conference held in Lagos was “Accelerating Growth in Nigeria’s Hydrocarbon Reserves: Emerging Concepts, Challenges and Opportunities.”
He said the NNPC had slashed its cost per unit to between 20 per cent and 30 per cent and would reach the projected target next year.
He said, “We are in challenging times. What COVID-19 did to the oil industry is monumental. It has done a lot of collateral damage to the rest of the industry, entertainment and everything you can think off.
“Of course, the collateral cost to the industry we expect is about $1tn of loss for E&P across the globe.
“There’s an extreme decline in demand for oil and of course other losses through the year which is fatal for the business.
“But businesses must adjust and do things differently. We have pulled down cost and increased revenue and we are focusing more on reducing cost and optimising costs where we are not able to cut costs.
“We are investing in gas because we have seen the resilience of gas and that has taught us that gas will be the future of transition fuel and a great player in the future scenario. We are a gas country with over 600tcf with proven reserves of 203 trillion CF. We have done very little on that. The PIB will be the solution to this.”
Kyari said the only way to survive the difficult situation was to cut or optimise production costs and increase revenue.
Vice President, Prof. Yemi Osinbajo, who also attended the event, said the Federal Government was targeting the growth of the country’s crude oil reserves, currently at about 36 billion barrels to 40 billion and achieve a daily production of three million barrels.
Kyari, in his virtual presentation from Abuja, explained that with over 203 trillion cubic feet of gas, the Petroleum Industry Bill (PIB) when passed into law, would unlock the huge potential in the country.
According to him, without a clear fiscal environment and incentives in place, no one will invest in the sector, adding that by the time the PIB is ready next year, there will be renewed vigour in the industry, especially on the gas side.
He stated that despite the conversations surrounding the extinction of hydrocarbons, crude oil will continue to be relevant in the next 20 to 40 years.
He added that only very efficient companies producing at cheapest cost and getting to the market early would survive.
Kyari expressed delight at the discovery of oil in the frontier basin, particularly in the Benue trough.
He said it would significantly change the dynamics of production in the country, including the expansion of the country’s reserves.
He said, “Times are tough but the opportunities are all there. As a company, we have a target in the upstream and we know that $10 is possible in the industry. A lot is going on in terms of sharing resources, reducing contracting circle etc. We have seen a cost reduction of 20 to 30 per cent and overall at the end of 2021, we will see the $10 unit production cost.
“There are areas where it’s being done for less than $10 and unless we do this, we will not be competitive. The advantage we have is the quality of oil we have and we are one of the most extreme area in terms of distribution, so we have to pull the cost down, otherwise, we will produce oil and not find anyone to buy because you cannot cover the cost ultimately.”
Osinbajo, represented by the Minister of State, Petroleum, Chief Timipre Sylva, explained that though renewable energy remained the future of energy transition, hydrocarbons would remain the dominant source of energy in the immediate future.
He expressed optimism that a single-digit unit cost of production was achievable, provided the entire industry could work together to achieve the set target.
He said, “There’s no gainsaying that the growth of some countries depends on energy availability and utilisation, especially on crude oil and increasingly on natural gas.
“Renewable energy is becoming a cheaper form of energy and response to climate and reduced dependence on hydrocarbons over the next century seems to be inevitable. That notwithstanding, technology and discussions to date suggest that hydrocarbons will remain the dominant source of energy in the immediate future.
“The increased level of uncertainty in oil and gas demand and the emerging technologies on alternative energy have become important elements in making decisions on optimal exploitation of petroleum resources.
“This is more critical now that abundance of hydrocarbons is being discovered in the most unconventional places of the world. I suggest that our discussion should include but not limited to provision of secure energy supplies.”
The vice president stated that the OPEC production curtailments had resulted in lower revenue for the government, adding that it is now imperative for Nigeria to achieve a single-digit cost of production.
“Another key mandate is the growth of the country’s reserves to 40 billion barrels of crude oil as well as the production capacity of three million barrels of crude oil per day. We are fully committed to this mandate, notwithstanding the curtailment.
“We have the assurance that the curtailment will soon be over as the world economy improves. To grow our reserves, we have proposed fiscal incentives that will attract investments in the PIB,” he stated.
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Nigeria seeks fresh $300m W’Bank loan for health security

Nigeria seeks fresh $300m W’Bank loan for health security
The Federal Government has engaged the World Bank for a new $300 million loan aimed at strengthening Nigeria’s health security infrastructure.
According to World Bank documents, the Nigeria Centre for Disease Control (NCDC) will implement the project, with the Federal Ministry of Finance acting as the borrower.
The initiative aims to enhance Nigeria’s capacity to prevent, detect, and respond to health emergencies.
The project is currently in the pipeline stage, with a disclosure date set for February 6, 2025.
The World Bank Board is expected to approve it on July 30, 2025, after necessary appraisals and assessments. Implementation will commence in the 2026 fiscal year.
The Nigeria Health Security Programme (HeSP) will focus on expanding molecular laboratory capacity, upgrading primary healthcare centres, establishing emergency operation centres and deploying mobile laboratories.
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Others are constructing warehouses for medical supplies, installing water, sanitation, and hygiene facilities and integrating solar energy systems to power health infrastructure.
The initiative is part of efforts to strengthen Nigeria’s public health infrastructure, following lessons from past outbreaks, including COVID-19.
This latest loan request comes as Nigeria continues to rely heavily on external financing. Under President Bola Tinubu’s administration, the Federal Government has secured $6.95 billion in World Bank loans over the past 18 months.
Data from the Debt Management Office shows that Nigeria owes the World Bank $17.32 billion, with the International Development Association (IDA) accounting for $16.84 billion.
In the first nine months of 2024, Nigeria spent $3.58 billion servicing its foreign debt, a 39.77% increase from $2.56 billion during the same period in 2023.
Nigeria seeks fresh $300m W’Bank loan for health security
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CBN to sanction banks limiting ATM withdrawal below N20,000

CBN to sanction banks limiting ATM withdrawal below N20,000
The Central Bank of Nigeria, CBN, has threatened to sanction banks that limit Automated Teller Machines (ATM) withdrawal to less than N20,000 per transaction.
The apex bank disclosed this in a document addressing concerns over the reviewed fees on ATM withdrawal.
Recall that CBN on Tuesday increased ATM transaction withdrawal fees, saying, from March 1st, bank customers will pay N100 charge for every N20,000 withdrawal from the on-site ATM of other banks.
The CBN in a circular to banks and other financial institutions, the CBN said, “ATM Transaction Fees On-Us for customers withdrawing at the ATM of the customer’s financial institution in Nigeria with No charge.
“Not-On-Us for withdrawal from another institution’s ATM in Nigeria; On-site ATMs will attract a charge of N100 per N20,000 withdrawal.
“Off-site ATMs will attract a charge of N100 plus a surcharge of not more than N500 per N20,000 withdrawal.
“The surcharge, which is an income of the ATM deployer/acquirer, shall be disclosed at the point of withdrawal to the consumer.
“International Withdrawals (per transaction) whether debit/credit card: Cost Recovery – exact charge by international acquirer.
“Furthermore, the three free monthly withdrawals allowed for Remote-On-Us (other bank’s customers/Not-On-Us consumers) in Nigeria under Section 10.6.2 of the Guide shall no longer apply.”
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However, following widespread concerns over the limit on ATM cash withdrawal by banks, the apex and yesterday released a list Frequently Asked Question, FAQ, to clarify implementation of the new charge.
CBN to sanction banks limiting ATM withdrawal below N20,000
News
Google CEO meets Tinubu over AI skills expansion in Nigeria

Google CEO meets Tinubu over AI skills expansion in Nigeria
The CEO of Google, Sundar Pichai on Wednesday met with Nigeria’s President Bola Tinubu in Paris, where both leaders discussed a partnership to expand Artificial Intelligence (AI) skills in Nigeria.
Pichai first shared a picture of the meeting with Tinubu on X, noting that the discussions centered on the immense potential of AI in Nigeria.
“It was great meeting with President Tinubu @officialABAT.
“We talked about the immense potential of AI in Nigeria, and how we can partner to expand AI skills, enable innovation, and support Nigeria’s growing tech ecosystem,” Pichai posted.
Commitment to AI in Nigeria
Responding to the post, the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, who was also at the meeting, described the discussions as “extremely productive”.
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According to him, the meeting demonstrated the Nigerian government’s commitment to AI and Google’s ongoing support towards developing AI skills and innovation in critical sectors in Nigeria.
Last year, Google announced two separate AI initiatives in Nigeria in partnership with the Ministry of Communications, Innovation, and Digital Economy, both aimed at empowering Nigerians with AI skills.
In the first initiative, the National Centre for Artificial Intelligence and Robotics (NCAIR), a N100 million AI Fund backed by Google to support Nigerian startups that are leveraging AI to develop innovative solutions.
The second initiative was a N2.8 billion support from Google to accelerate AI talent development across Nigeria.
According to the Ministry, the support, which was provided as a grant from Google.org to Data Science Nigeria, would bolster its ongoing AI-driven initiatives to upskill youth and under- and unemployed Nigerians, with a focus on AI skill development and education.
Google CEO meets Tinubu over AI skills expansion in Nigeria
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