Business
With Almost 700,000 Daily Under-production, Nigeria, Angola Account for Half of OPEC’s Oil Supply Gap
Almost half the shortfall in planned oil supply by the Organisation of Petroleum Exporting Countries (OPEC) and its allies is down to Nigeria and Angola, Reuters has indicated.
It reflects a number of factors which have combined to hobble crude production on the continent, including moves by Western oil majors away from African projects.
OPEC and its allies, known as OPEC+, pumped 1.45 million barrels per day (bpd) – equal to 1.5 per cent of world supply – below its target in March, the OPEC+ figures showed.
According to the figures, Angola was responsible for almost 300,000 bpd of the OPEC+ supply shortfall while Nigeria was pumping almost 400,000 bpd below target. The war in Ukraine has also hit Russia’s oil trading and its output was about 300,000 bpd short of its March supply target.
The OPEC+ shortfall is one of the reasons global oil prices hit a 14-year high in March above $139 a barrel and it has prompted calls by the United States and other consumers for producers to pump more.
But OPEC has repeatedly rebuffed the calls and one contributing factor is simply that some of its members don’t have oil available to pump.
In OPEC’s view, investment cuts after oil prices collapsed in 2015-2016, due to oversupply, along with a growing focus by investors on economic, social and governance (ESG) issues, have led to a shortfall in the spending needed to meet demand.
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“There was massive underinvestment in the industry over the years, further complicated by the effect of ESG (Environmental, Social and Governance,” OPEC Secretary General, Mohammad Barkindo told Reuters.
“There was a contraction of 25 per cent in 2015 and 2016 – unprecedented. There was no significant recovery before 2020, when we registered a 30 per cent contraction in investments in the industry,” he added.
Figures from the International Energy Agency (IEA) show there was no significant increase in investment in global oil and gas exploration and production during 2017-2019 – followed by a 32 per cent plunge in 2020.
International oil companies are gradually pulling out of Nigeria’s onshore oil production, although they continue to invest in its vast offshore oil and gas resources, where costs remain competitive.
Shell which has been heavily involved in Nigeria’s oil and gas industry did not immediately respond to a request for comment about investment and the reasons for the decline in Nigerian output.
OPEC’s Gulf producers led by Saudi Arabia are largely meeting their OPEC+ targets, and OPEC sources say their relative lack of dependence on outside investors has helped.
“The investment shortfall affected more the countries where reliance on foreign investment is more prominent,” an OPEC+ source from a Gulf producer told Reuters.
IEA figures show that in 2019, Final Investment Decisions (FIDs) affecting over eight times more crude reserves in the Middle East were taken than those affecting African reserves. Middle East approvals were also consistently higher from 2011 through 2018.
“Saudi Arabia, the United Arab Emirates and Kuwait are increasing investment and that to some extent can help offset declines elsewhere,” said Audun Martinsen, analyst at Rystad Energy.
“It also highlights why OPEC is not intervening more because it is quite hard for OPEC to increase production overnight,” Martinsen added.
Angolan state oil company Sonangol and Nigeria’s state oil firm the Nigerian National Petroleum Corporation (NNPC) did not immediately respond to Reuters requests for comment on their production decline or the reasons for it.
According to a 2021 report from the Arab Petroleum Investments Corporation or APICORP, Middle East and North African producers were still expected to boost energy investment to $805 billion in 2021-2025 – up $13 billion on the previous year’s five-year outlook, despite the impact of the pandemic.
In February, Saudi Arabia-based APICORP said it expected rising oil and gas prices to further support energy investment in the region.
THISDAY
Business
PH refinery: 200 trucks will load petroleum products daily, says Presidency
PH refinery: 200 trucks will load petroleum products daily, says Presidency
No fewer than 200 trucks are set to load petroleum products at the government-owned Port Harcourt Refinery, the presidency has said.
A presidential spokesperson, Sunday Dare, made this known in a statement through his official X handle on Tuesday.
Newstrends had reported that the Nigerian National Petroleum Company on Tuesday announced that Port Harcourt Refinery has resumed operations and crude oil processing after years of inactivity.
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Reacting, Dare said, “200 trucks are expected to load products daily from the refinery, Renewing the Hopes of Nigeria.”
He added that “the Port Harcourt refinery has two wings.
“The Old Refinery comes on stream today with an installed production capacity of 60, 000 barrels per day of crude oil.”
PH refinery: 200 trucks will load petroleum products daily, says Presidency
Business
Breaking: CBN increases interest rate to 27.50%
Breaking: CBN increases interest rate to 27.50%
The Central Bank of Nigeria (CBN) has raised the lending interest to 27.50 per cent from 27.25 per cent.
This latest increase in the Monetary Policy Rate came after a meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Monday and concluded Tuesday.
The Monetary Policy Rate measures the benchmark interest rate.
The CBN Governor, Yemi Cardoso, announced this in Abuja on Tuesday after the MPC meeting, last for the year, held at the apex bank’s headquarters.
He said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25% to 27.50%; and retain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The CBN governor also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
Business
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate stood at 4.3 per cent in the second quarter of 2024, the National Bureau of Statistics (NBS) has said in its latest report.
The report released on Monday said the unemployment rate decreased compared to the 5.3 per cent recorded in the Q1 of 2024.
The NBS defined the unemployment rate as the share of the labour force (the combination of unemployed and employed people) who are not employed but actively searching and are available for work.
“The unemployment rate for Q2 2024 was 4.3%, showing an increase of 0.1 percentage point compared to the same period last year,” the report stated.
“The unemployment rate among males was 3.4% and 5.1% among females.
“By place of residence, the unemployment rate was 5.2% in urban areas and 2.8% in rural areas. Youth unemployment rate was 6.5% in Q2 2024, showing a decrease from 8.4% in Q1 2024.”
Report also said the unemployment rate among persons with post-secondary education was 4.8 per cent; 8.5 per cent among those with upper secondary education, 5.8 per cent for those with lower secondary education, and 2.8 per cent among those with primary education in Q2 2024.
Employment rate – 76%
The report showed that the employment-to-population ratio, which measures the number of employed workers against the total working-age population, increased to 76.1 per cent in Q2 2024.
“In Q2 2024, 76.1% of Nigeria’s working-age population was employed, up from 73.1% in Q1 2024,” the report stated.
Self-employment – 85.6%
The report further showed that Nigeria’s labour market saw a notable shift as the proportion of self-employed individuals increased in Q2 2024.
It stated, “The proportion of persons in self-employment in Q2 2024 was 85.6%.”
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