Economy
Oando Targets Profitability via Growth in Upstream Business
By Dipo Olowookere
The management of Oando Plc, an indigenous energy company in the country, has promised to look into driving profitability by pursuing production growth initiatives through strategic alliances.
This assurance was given in a statement issued by the firm, while commenting on its performance in the first half of 2019.
In the statement, Oando noted that for most of this year, prices of oil at the global maret have averaged at $65 per barrel.
It said, “We shall continue employing price protection strategy by hedging our production.
“Our focus will be largely on driving profitability via growth in our upstream business where we will pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.
“We will also continue to work with our partners to achieve cost optimization on our Joint Venture operations, ensuring the gains from higher revenues are not lost to increasing operating costs.
Group Chief Executive of Oando PLC, Mr Wale Tinubu, who was quoted in the statement, said, “Half year 2019 was a positive period for us as we achieved strong top and bottom line earnings despite our overall performance being tempered by a one-off N14 billion charge.
“Our crude oil and natural gas production grew by 15 percent and 8 percent respectively compared to the similar period last year while we also achieved a significant reduction in our Reserve Based Lending facility to approximately $0.4 million from$450 million at inception, -a 99 percent reduction.
“We also concluded the divestment of our residual interest in Axxela for $41.5 million, in line with our strategy of divesting from non-strategic assets and remain on track to deliver on all our initiatives for the year.
“Looking ahead, our focus will be on achieving further growth and profitability by delivering on our production growth initiatives through strategic alliances and partnerships.”
Business Post reports that in the period under review, Oando increased its production by 8 percent at 40,873boe/day, compared with 37,814boe/day in the same period of 2018.
Oil production in particular increased by 15 percent from 14,675 bbls/day in H1 2018 to 16,876 bbls/day in H1 2019, whilst natural gas production increased by 8 percent from 118,866mcf/day in H1 2018 to 128,533 mcf/day in H1 2019.
Capital expenditure of $62.3 million (N22.5 billion) was incurred in the six months of 2019 compared to $24.7 million (N8.9 billion) in same period in 2018. This consists of $59.7 million (N21.6billion) at OMLs 60 to 63, $1.9million (N686.2 million) at OML 56, $0.04 million (N14 4 million) at OML 13, and $0.8 million (N288.9 million) on other assets.
Economy
IPMAN Considers Dangote Petrol for Competitive Pump Price
By Aduragbemi Omiyale
More petroleum marketers are looking to take advantage being offered by the Dangote Refinery in Lagos through its bulk-purchase incentives, allowing petrol stations to sell premium motor spirit (PMS), otherwise known as petrol, cheaper to motorists.
Recall that recently, Dangote Refinery entered into a deal with MRS Oil Nigeria, Ardova Plc, Heyden for the purchase of petrol at least two million litres at N909 per litre.
With this agreement, MRS Oil has been able to dispense to customers at a pump price of N935 per litre across its stations in Nigeria.
For those not under this arrangement, they have been battling with price instability, especially after depot owners recently increased their price to N950 per litre from N909 per litre because of the rise in crude oil prices in the international market.
Worried by this and attracted by the bulk-purchase agreement incentives of Dangote Petroleum Refinery, the Independent Petroleum Marketers Association (IPMAN) is already having talks to buy directly from the Lagos-based oil facility.
The national president of the group, Mr Abubakar Maigandi Garima, said members are eager to sign on with Dangote Refinery for the bulk-purchase agreement.
He argued that members could not continue to depend on depot owners for products when they can buy directly from the refinery bearing in mind that the minimum quantity to buy from Dangote Refinery is two million litres at N909 per litre.
The desire to be part of the bulk-purchase agreement, it was also gathered, was also apparently being fuelled by the testimonies from motorists who have been praising the impressive burn rate of fuel sourced from Dangote Refinery and sold in MRS filing stations which they said lasts longer compared to other products imported into the country and sold by others.
The management of the Dangote Refinery, citing economic relief provided by President Bola Ahmed Tinubu’s crude-for-naira swap initiative, had announced a bulk-purchase offer incentives to the three leading downstream sector operators, so that Nigerians could heave a sigh of relief on the reduced pump price.
Economy
World Bank Forecasts 3.6% GDP Growth for Nigeria in 2025
By Adedapo Adesanya
The World Bank has projected a 3.6 per cent economic growth for Nigerian in 2025 and 2026 on the back of ongoing reforms by the federal government.
The Bretton Wood institution in its report titled Global Economic Prospects, January 2025 published on Thursday, said recent reforms, including subsidy removal, Naira liberalisation and the introduction of tax reform bills would help to boost business confidence.
“In Nigeria, Gross Domestic Product (GDP) growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.
“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy.
“Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration,” a part of the report stated.
The World Bank noted that the wider Sub-Saharan Africa, to which Nigeria belongs would see a 4.1 per cent growth in the current year, before seeing a 4.3 per cent rise in 2026.
“Growth in Sub-Saharan Africa, SSA is expected to firm to 4.1 per cent in 2025 and 4.3 per cent in 2026, as financial conditions ease alongside further declines in inflation. Following weaker-than-expected regional growth last year, growth projections for 2025 have been revised upward by 0.2 percentage points, and for 2026 by 0.3 percentage points, with improvements seen across various subgroups. At the country level, projected growth has been upgraded for nearly half of SSA economies in both 2025 and 2026.
“Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth,” it added.
The global lender disclosed that oil production is expected to increase over the forecast period but remain below the 1.5 million barrels per day quota of the Organisation of the Petroleum Exporting Countries (OPEC).
Economy
Nigeria’s Unlisted Securities Close Higher by 0.35%
By Adedapo Adesanya
Four price gainers helped the NASD Over-the-Counter (OTC) Securities Exchange close higher by 0.35 per cent on Thursday, January 16.
The value of the trading platform jumped by N3.69 billion during the session to N1.072 trillion from the N1.068 trillion it closed in the preceding session, and the NASD Unlisted Security Index (NSI) made an addition of 10.67 points to wrap the session at 3,103.83 points compared with 3,093.16 points recorded at the previous session.
Industrial and General Insurance (IGI) Plc added 3 Kobo to its price yesterday to trade at 33 Kobo per unit compared with Wednesday’s closing price of 30 Kobo per unit, Newrest Asl Plc appreciated by N2.85 to N31.18 per share from N28.53 per share, 11 Plc gained N2.90 to close at N256.00 per unit versus the N253.10 per unit it finished a day earlier, and FrieslandCampina Wamco Nigeria Plc grew by 21 Kobo to N39.16 per share, in contrast to midweek’s N38.95 per share.
On Thursday. there was an 85.3 per cent increase in the volume of securities traded by investors to 1.2 million units from the 666,494 units recorded in the preceding session, the value of shares traded surged by 8.9 per cent to N18.0 million from N16.5 million, and the number of deals leapt by 65 per cent to 33 deals from 20 deals.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, trailed by Geo-Fluids Plc with 8.9 million units sold for N43.0 million, and Afriland Properties Plc valued at 690,825 sold for N11.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 23.5 million units sold for N5.3 million, followed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and FrieslandCampina Wamco Nigeria Plc followed with 3.4 million units worth N134.9 million.
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