Economy

Nigeria’s Oil Production Could Fall 35% in Next Decade

Published

5 years ago

19/02/2020

By Adedapo Adesanya

Nigeria’s oil production could drop by 35 percent in the next 10 years as regulatory uncertainty and costs may delay companies’ investments in key oilfields across the country.

This was disclosed in a research carried out by consultancy company, Wood Mackenzie, recently where it warned that three deep offshore fields, which would generate $2.7 billion per year for the government at peak production, will likely be delayed.

According to Mr Lennert Koch, the principal analyst of sub-Saharan Africa upstream with Wood Mackenzie cited by Reuters, in the face of this, it was necessary for the country to develop additional fields.

“Nigeria is going to enter quite a steep decline in production. In order to keep its revenue up, it needs to develop additional fields,” he recommended.

The three deepwater projects offshore fields operated by oil majors Exxon, Shell, and Total, could see their start-up dates delayed by two to four years to the late 2020s.

Bonga Southwest Aparo, operated by Shell, and Preowei, operated by Total, could be delayed to 2027 and 2025 respectively, and for ExxonMobil’s Owowo by four years to 2029, the research stated.

Wood Mackenzie also cited changes to tax and royalty laws and uncertainty over oil reform as the main reasons for delays.

It also believes that the deepwater fields, which hold an estimated 1.5 billion barrels of oil, could add 300,000 barrels per day of oil to the country quota and considering the current oil prices at $58 a barrel is not profitable to investors who are willing to put their money in regions with better and clearer terms.

“These are still world class resources,” Mr Koch said. “What makes some of the other regions more attractive is just higher returns (from) lower costs and less regulatory uncertainty,” the agency said.

Last year, Nigeria boosted its share of deepwater oil revenues in an effort to add $1.5 billion to fund its budget in two years and kickstarted a finance bill increasing the Value Added Tax (VAT) rate from 5 percent to 7.5 percent and with this telling on investors, production would drop 35 percent within a decade.

Meanwhile, at the recently concluded Nigeria International Petroleum Summit (NIPS) in Abuja, President Muhammadu Buhari promised foreign oil investors that the country was open to business that can guarantee them high returns on investments.

While the country’s oil company, Nigeria National Petroleum Corporation (NNPC) said that the recent amendment to the Deep Offshore Act will improve financial stability and investor confidence.

Economy

NASD OTC Exchange Depreciates by 0.08%

Published

39 minutes ago

08/04/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange fell by 0.08 per cent on Monday, April 7, as the global market meltdown takes its toll on the local economy.

During the first trading session of the week, the market capitalisation of the bourse went down by N1.50 billion to N1.909 trillion from the N1.911 trillion quoted at the preceding session.

In the same vein, the NASD Unlisted Security Index (NSI) depreciated by 2.59 points at the close of business to 3,306.87 points from last Friday’s 3,309.46 points.

Business Post reports that there were two price losers at the session led by Nipco Plc, which crumbled by N20.20 to close at N199.80 per share compared with the previous closing value of N220.00 per share, and Geo-Fluids Plc retreated by 24 Kobo to settle at N2.46 per unit, in contrast to the N2.70 per unit it was traded at the last trading day.

However, the price of FrieslandCampina Wamco Nigeria Plc went up by N1.22 yesterday to N38.02 per unit from last Friday’s closing value of N36.80 per unit.

The volume of securities traded by the market participants decreased by 56.8 per cent during the session to 560,253 units from the 1.3 million units transacted in the previous trading day, but the value of trades rose by 232.3 per cent to N16.7 million from N5.02 million, and the number of deals contracted by 10 per cent to 18 deals from 20 deals.

Impresit Bakolori Plc remained the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, Industrial and General Insurance (IGI) Plc occupied the second spot with 71.2 million units sold for N24.2 million, and the third position was taken by Geo Fluids Plc with 44.4 million units valued at N89.8 million.

Also, FrieslandCampina Wamco Nigeria Plc maintained its position as the most traded stock by value (year-to-date) with 14.2 million units valued at N549.9 million, followed by Impresit Bakolori Plc with 533.9 million units worth N520.9 million, and Afriland Properties Plc with 17.8 million units sold for N364.2 million.

Economy

Naira Plunges 3.5% to N1,628/$1 at Official Market on FX Liquidity Squeeze

Published

1 hour ago

08/04/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira experienced a significant decline against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 7, amid a wider roil caused by tariffs from the United States, which has severely affected markets, while efforts to cushion this has so far not yielded a direct resolve.

At the official market yesterday, the Nigerian currency lost N55.66 or 3.5 per cent against the American currency to settle at N1,628.89/$1, in contrast to the preceding session’s rate of N1,573.23/$1, according to data from the Central Bank of Nigeria (CBN).

Equally, the Naira depreciated against the Pound Sterling at NAFEM during the session by N25.39 to close at N2,056.41/£1 versus last Friday’s value of N2,031.02/£1 and shed N36.24 against the Euro to sell for N1,761.53/€1 compared with the preceding trading day’s N1,725.29/€1.

In the parallel market, the value of the domestic currency declined against the US Dollar on Monday, by N15 to sell for N1,580/$1 versus the preceding session’s N1,565/$1.

Over the weekend, the CBN revealed that it boosted the market with $197.71 million through sales to authorised dealers.

According to the apex bank, the move is in line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, adding that the measured step aligns with its broader objective of fostering a stable, transparent, and efficient FX market.

It raised worry about declining oil prices – which accounts for over 70 per cent of Nigeria’s FX earnings – which has dropped below $65 per barrel and could hit the country’s FX reserves.

Meanwhile, the cryptocurrency market turned bullish yesterday as the US President, Mr Donald Trump, while adamant of not reversing the tariffs on countries around the world, said some countries are ready to come to the table, helping to ease some of the panic with the European Union also confirming that it was planning to negotiate with the US.

Solana (SOL) gained 8.0 per cent to trade at $109.50, Cardano (ADA) rose by 7.7 per cent to $0.5876, Dogecoin (DOGE) appreciated by 7.2 per cent to $0.1495, and Litecoin (LTC) grew by 6.9 per cent to $71.51.

Further, Ripple (XRP) jumped by 6.8 per cent to $1.87, Bitcoin (BTC) expanded by 4.2 per cent to $79,397.68, Binance Coin (BNB) went up by 3.4 per cent to $560.40, and Ethereum (ETH) added 3.3 per cent to close at $1,575.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.

Economy

NGX All-Share Index Drops Below 105,000 Points After 1.23% Fall

Published

2 hours ago

08/04/2025

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited further depreciated by 1.23 per cent on Monday following persistent selling pressure amid global financial markets crisis.

All the major key sectors of Customs Street were in red on the first trading session of the week, with the insurance index down by 7.56 per cent.

Further, the banking sector went down by 5.48 per cent, the consumer goods space shrank by 0.79 per cent, the energy index shrank by 0.65 per cent, the commodity counter declined by 0.10 per cent, and the industrial goods industry tumbled by 0.01 per cent.

Consequently, the All-Share Index (ASI) crashed by 1,295.02 points to 104,216.87 points from 105,511.89 points and the market capitalisation depreciated by 1.00 per cent or N658 billion to N65.489 trillion from last Friday’s N66.147 trillion.

Business Post reports that the bourse was under heavy profit-taking yesterday, resulting in nine stocks finishing on the gainers’ chart, with 51 stocks on the losers’ table. This showed a negative market breadth index and weak investor sentiment.

The quartet of Oando, Secure Electronic Technology, Cornerstone Insurance, and RT Briscoe lost 10.00 per cent each to trade at N37.80, 45 Kobo, N2.97, and N2.16, respectively, and Honeywell Flour crumbled by 9.98 per cent to N10.19.

On the flip side, VFD Group gained 10.00 per cent to quote at N62.70, TotalEnergies expanded by 9.61 per cent to N745.00, Guinea Insurance grew by 9.52 per cent to 69 Kobo, International Energy Insurance improved by 9.33 per cent to N1.64, and Abbey Mortgage Bank surged by 8.88 per cent to N5.15.

Banking shares dominated the activity chart during the trading day, with FCMB selling 65.5 million units worth N589.0 million, Fidelity Bank traded 42.5 million units for N818.4 million, GTCO exchanged 34.5 million units valued at N2.3 billion, Access Holdings transacted 31.8 million units worth N687.2 million, and Zenith Bank traded 31.7 million units valued at N1.5 billion.

At the close of transactions, investors bought and sold 444.1 million equities for N11.2 billion in 15,690 deals versus the 348.3 million equities valued at N8.1 billion traded in 11,444 deals in the preceding session, representing a surge in the trading volume, value, and number of deals by 27.51 per cent, 38.27 per cent, and 37.10 per cent apiece.