Economy
Nigeria Records Second-Highest Production Drop Among OPEC in May
By Adedapo Adesanya
Nigeria, Africa’s largest crude oil producer, ended the month of May with the second-highest production drop among countries that make up the Organisation of the Petroleum Exporting Countries (OPEC).
In the month under review, Nigeria lost 45,000 barrels per day, making it the largest laggard among the countries not exempted from the 2020 output deal.
Nigeria’s worsening crude output happens because the country cannot keep up due to a lack of capacity caused by infrastructural deficits and other security issues.
In the month under review, OPEC was not able to lift its production as agreed for the month of May, its production actually decreased, according to OPEC’s latest Monthly Oil Market Report released on Tuesday.
Meanwhile, the group stressed that oil demand could be stymied by Russia’s invasion of Ukraine, which has dictated the market for the last three months.
That point, however, did little to mitigate the market’s fear that OPEC’s spare capacity has been overstated, with Saudi Arabia and the UAE the only members that have any room to increase production.
The extra production from the Kingdom and the Emirates, however, has been offset by an even greater decline in production from Iraq, Libya, and Nigeria.
OPEC produced a total of 28.508 million barrels per day in May—down 176,000 barrels per day from April 2022. The reason for the decline is lower productions in Equatorial Guinea (-2,000 barrels per day), Venezuela (-2,000 barrels per day), Iran (-20,000 barrels per day), Iraq (-21,000 barrels per day), Gabon (-32,000 barrels per day), Nigeria (-45,000 barrels per day), and most notably—Libya (-186,000 barrels per day), according to OPEC’s secondary sources.
Saudi Arabia’s directly reported production was 10.538 million barrels per day.
These losses were partially—but not completely—offset by gains in Saudi Arabia, which increased production by 60,000 barrels per day, reaching an average of 10.424 million barrels per day; the UAE, which saw an increase of 31,000 barrels per day, and Kuwait, which saw a 27,000 barrels per day increase.
For the 10 OPEC members that had assigned quotas for May 2022 totalling 25.589 (which exclude Iran, Venezuela, and Libya), May’s actual OPEC member production was 24.541 barrels per day—a 1.048 million barrels per day shortfall from OPEC’s stated allowances.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited extended its losing streak to seven consecutive sessions on Wednesday after it closed lower by 0.36 per cent.
The loss suffered yesterday was inflicted by the energy space, which significantly shed 4.63 per cent at the close of business. This was because of profit-taking in Aradel Holdings.
Further, the insurance segment went down by 0.88 per cent due to sell-offs, especially after news of the revocation of the operating licence of Universal Insurance Plc by the National Insurance Commission (NAICOM) after it missed the new recapitalisation requirements.
The consumer goods index depreciated at midweek by 0.31 per cent, while the banking space recovered 0.54 per cent, with the industrial goods segment closing flat.
When market activities ended for the session, the All-Share Index (ASI) was down by 860.76 points to 240,750.47 points from 241,611.23 points, and the market capitalisation gave up N556 billion to settle at N155.417 trillion compared with the previous day’s N155.973 trillion.
International Energy Insurance shed 10.00 per cent to quote at N4.77, Aradel lost 9.99 per cent to trade at N1,374.20, Universal Insurance slumped by 9.41 per cent to 77 Kobo, Red Star Express depreciated by 9.26 per cent to N14.70, and Royal Express crashed by 8.62 per cent to N1.06.
On the flip side, Haldane McCall gained 10.00 per cent to end at N3.52, Coronation Insurance improved by 8.44 per cent to N2.44, UAC Nigeria jumped by 6.56 per cent to N177.85, AVA Capital grew by 6.29 per cent to N7.60, and Caverton rose by 5.32 per cent to N4.95.
The most active equity during the session was Fortis Global Insurance, with a turnover of 610.7 million units worth N1.2 billion. FCMB traded 60.9 million units worth N722.9 million, Fidelity Bank transacted 57.0 million units valued at N1.2 billion, Consolidated Hallmark sold 46.3 million units worth N312.7 million, and Royal Exchange exchanged 43.5 million units valued at N45.8 million.
In all, a total of 1.2 billion shares valued at N37.8 billion exchanged hands in 34,546 deals on Wednesday compared with the 429.8 million shares worth N27.5 billion traded in 35,683 deals on Tuesday. This indicated a spike in the trading volume and value by 179.20 per cent and 37.46 per cent, respectively, while the number of deals declined by 3.19 per cent.
By Aduragbemi Omiyale
The operating licence of Universal Insurance Plc has been withdrawn by the National Insurance Commission (NAICOM).
This action was taken by the regulator over the failure of the underwriting firm, which is listed on the Nigerian Exchange (NGX) Limited, to meet the new recapitalisation requirements on or before July 31, 2026.
NAICOM said it revoked the company’s licence based on its powers stipulated in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The regulator has appointed a Receiver/Provisional Liquidator for the insurance company, and he is Mr Ogbonna Chukwumerije, a partner at Pinheiro LP.
He will immediately trace, recover, secure and take possession of Universal Insurance’s assets, collate its liabilities and facilitate their settlement in accordance with the provisions of NIIRA 2025.
He is also required to liaise with NAICOM and submit periodic reports on the progress of the receivership and liquidation process.
Already, Mr Chukwumerije has informed banks, financial institutions, policyholders, creditors, debtors, customers and members of the public that Universal Insurance had entered receivership, advising parties dealing with the company’s funds, assets, records, policies, claims and liabilities to verify the authority of anyone claiming to act on its behalf.
Banks and other financial institutions were specifically warned against honouring withdrawals, transfers, payment mandates or other instructions issued on behalf of Universal Insurance unless authorised by the receiver.
However, Universal Insurance has taken steps to appeal NAICOM’s decision. The organisation was among six insurers that failed to meet the recapitalisation deadline.
By Adedapo Adesanya
The oil market was elevated on Wednesday as investors worried about escalating tensions in the Middle East, with the United Arab Emirates suspending all financial and economic transactions with Iran.
Brent crude futures settled at $91.62 a barrel after soaring by 60 cents or 0.7 per cent, while the US West Texas Intermediate (WTI) crude futures rose by 89 cents or 1.1 per cent to $85.83 a barrel.
The UAE has halted all trade, financial, and commercial ties with Iran until further notice, after saying Tehran had fired ballistic missiles targeting its territory.
Late on Tuesday, the UAE’s Defence Ministry said that “assessments revealed the two ballistic missiles detected, originating from Iran, were targeting maritime navigation and fell into the sea.” One of the missiles fell outside the Emirates’s territorial waters, while the second fell within its territorial waters, the ministry added.
In light of these missiles fired from Iran, the UAE halted all economic ties with Iran.
This development comes after US President Donald Trump said no talks were taking place with Iran and that the Strait of Hormuz was open. Iran, however, said the waterway remained shut.
The oil market remains focused on the Strait of Hormuz, through which about one-fifth of global oil and liquefied natural gas supplies passed before the US-Israeli war on Iran began at the end of February.
Available data from Kpler showed that only six commodity vessels crossed the strait on Tuesday, down from nine a day earlier and below the 10-day daily average of 11.
Meanwhile, oil shipments from Russia’s western ports have fallen to about 2.3 million barrels per day in the first half of August, 15 per cent below the initial loading plan, because of disruptions at the Black Sea port of Novorossiysk.
Crude oil inventories in the US saw a massive increase of 4.4 million barrels during the week ending August 14, according to new data from the US Energy Information Administration (EIA) released on Wednesday.
The EIA’s data release follows figures from the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories had fallen by 328,000 barrels in the period.
