Economy
AEC Foresees Nigeria’s Crude Oil Production at 1.46 million barrels per day
By Adedapo Adesanya
Nigeria will maintain its position as one of Africa’s leading crude oil producers as well as one of the continent’s top three gas suppliers between 2022 and 2025, according to the Q1 2022 Outlook of the African Energy Chamber (AEC).
It also said this will provide an opportunity for the West African country to leverage its energy resources for economic growth while addressing global energy demand.
Nigeria represents one of Africa’s heavyweights when it comes to hydrocarbon exploration and production with over 36 billion barrels of oil and 200 trillion cubic feet of natural gas, the country has managed to position itself as both an attractive upstream market and competitive producer.
According to the outlook, Nigeria will produce 1.46 million barrels per day of crude oil out of the 6.35 million barrels per day that Africa as a whole will produce during the year, reaffirming the country’s position as a continental energy hub as production in the West African state peaks in 2023.
Out of the 36 billion barrels of oil reserves Nigeria holds, just over 25 per cent is currently produced from deepwater projects, underlining a huge opportunity for Nigeria to expand partnerships and investment to ramp up production and increase its role in both the continental and global energy landscape.
Speaking on this, Mr NJ Ayuk, Executive Chairman of the AEC said, “The recent $1.2 billion deal between Nigeria’s Seplat Energy and American energy firm ExxonMobil, in which the multinational will continue with its deep-water projects whilst handing over onshore projects, is an indication of the huge potential the country’s offshore projects have in the near future in addressing energy needs as energy consumption increases.
“By increasing focus on these projects, accelerating exploration and production in key basins, Nigeria has the ability to unleash its full energy potential.”
The chamber also called for more investments within the country’s downstream sector with inadequate infrastructure slowing down oil production and increasing Nigeria’s reliance on fuel imports.
Nigeria imports up to 1.25 million metric tons per month of gasoline due to inadequate domestic refining capacity.
Accordingly, the $12 billion Dangote refinery project in Lagos, slated to kickstart operations during Q4 of 2022 with a processing capacity of 540,000 barrels per day and partly owned by state-company the Nigerian National Petroleum Corporation, is an example of the willingness of Nigeria to set itself as an oil heavyweight while expanding its oil and gas capabilities to meet domestic, regional and global energy needs.
Meanwhile, on the gas front, the AEC outlook shows that Nigeria has also retained its spot amongst Africa’s main gas producers in 2022. An annual production capacity of 1,450 billion cubic feet is expected as the country recovers from 2020 low production levels.
Existing gas producing fields, as well as those currently under development, are expected to sustain the country’s gas production through to 2025.
Despite factors such as vandalism of infrastructure which are restraining optimal gas and oil exportation, as well as the high costs and emission rates associated with deep-water projects driving majors to diversify their portfolios, greenfield investments in Nigeria and its African counterparts will increase capital expenditure across the continent to $30 billion in 2022, providing an opportunity for new projects to come online and for leading hydrocarbon producers such as Nigeria to modernize and build new infrastructure as well as expand exploration and production.
On the regulation, the implementation of the Petroleum Industry Bill (PIB) in 2021 by the Nigerian government will provide regulatory clarity on royalties and other issues that have previously made it difficult for oil and gas E&P companies and downstream market players to expand investments within the country’s market.
Now, with the implementation of the PIB, the Chamber said Nigeria is better positioned, now more than ever, to attract investments and accelerate development in 2022 and beyond.
The AEC reiterated that Nigeria is positioned to lead African investment with proven oil and gas reserves as well as a reformed regulatory landscape making the sector increasingly attractive for foreign capital.
By Adedapo Adesanya
Four price decliners further weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.46 per cent on Thursday, July 2.
FrieslandCampina Wamco Nigeria Plc went down by N5.55 to N146.46 per unit from N152.01 per unit, Nitrox Industrial Gases Plc fell by N1.10 to N20.30 per share from N21.40 per share, UBN Property Plc lost 11 Kobo to sell at N1.99 per unit versus the previous day’s N2.10 per unit, and Mass Telecoms Innovation Plc depreciated by 4 Kobo to 32 Kobo per share from 36 Kobo per share.
Consequently, the NASD Unlisted Security Index (NSI) dropped 19.74 points to close at 4,248.46 points compared with Wednesday’s closing value of 4,268.20 points, while the market capitalisation decreased by N11.85 billion to N2.549 trillion from N2.561 trillion.
Yesterday, the volume of transactions went up by 92.9 per cent to 440,653 units from 229,238 units, and the number of deals rose by 77.8 per cent to 32 deals from 18 deals, while the value of trades contracted by 51.4 per cent to N10.5 million from N21.5 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 68.9 million units exchanged for N4.8 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
The selling pressure on the Nigerian Exchange (NGX) Limited persisted on Thursday, causing a further decline of 0.61 per cent.
Data from Customs Street showed that the insurance counter lost 2.46 per cent, the banking space declined by 2.15 per cent, the industrial goods sector crumbled by 1.00 per cent, the energy index fell by 0.23 per cent, and the consumer goods segment crashed by 0.08 per cent.
As a result, the All-Share Index (ASI) retreated by 1,368.10 points to 224,321.97 points from 225,690.07 points, and the market capitalisation moderated by N878 billion to N143.947 trillion from N144.825 trillion.
Trading data indicated investors bought and sold 855.4 million shares for N28.4 billion in 51,609 deals versus the 488.1 million shares worth N14.0 billion traded in 46,929 deals on Wednesday, showing a spike in the trading volume, value, and number of deals by 75.25 per cent, 102.86 per cent, and 9.97 per cent, respectively.
The busiest stock for the session was Sterling Holdings, with a turnover of 459.6 million units worth N3.7 billion, Zenith Bank exchanged 41.2 million units for N4.2 billion, Universal Insurance sold 30.2 million units valued at N25.2 million, Access Holdings traded 29.7 million units worth N654.9 million, and FCMB transacted 28.2 million units valued at N271.4 million.
Yesterday, 13 equities gained weight, while 34 equities shed weight, indicating a negative market breadth index and weak investor sentiment.
Guinea Insurance lost 10.00 per cent to trade at 90 Kobo, International Energy Insurance slipped by 9.84 per cent to N5.22, The Initiates dropped 9.79 per cent to close at N23.50, Tantalizers declined by 9.52 per cent to N3.61, and NEM Insurance crashed by 9.25 per cent to N28.12.
On the flip side, Austin Laz gained 10.00 per cent to close at N3.63, Learn Africa also improved by 10.00 per cent to N9.90, DAAR Communications appreciated by 9.49 per cent to N1.50, UPDC soared by 9.09 per cent to N3.60, and Caverton flew higher by 8.51 per cent to N5.10.
By Adedapo Adesanya
The Naira continued to gain ground against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX), as it further chalked up N2.26 or 0.16 per cent to sell for N1,370.15/$1 on Thursday, July 2, in contrast to Wednesday’s rate of N1,372.41/$1.
However, this was not the case for the domestic currency against the Pound Sterling at the same market window, the official market. It lost N10.44 to close at N1,832.17/£1 versus the previous day’s N1,821.73/£1, and fell against the Euro by N2.91 to trade at N1,568.28/€1 compared with the N1,565.37/€1 it was traded at midweek.
But at the black market, the Nigerian Naira gained N5 against the US Dollar yesterday to quote at N1,390/$1 versus the preceding session’s N1,395/$1, and at the GTBank FX counter, it appreciated by N7 to settle at N1,382/$1 versus N1,389/$1.
There are expectations that the Naira will remain within range as pressure from people taking half-year profits has tapered down while continued stronger policy signals from the Central Bank of Nigeria (CBN) back the market.
Data from the apex bank showed that interbank FX turnover declined to $85.517 million across 94 deals closed by financial institutions trading on behalf of their clients from $90.303 million the previous day.
The last two trading sessions have seen a sharp decline in interbank FX turnover, down from an intra-week high of $269.898 million, according to data obtained from the CBN.
Despite a sharp slowdown in CBN FX intervention, the broader expectation remains that the Naira will trade within a relatively stable range through the remainder of 2026.
As for the cryptocurrency market, a squeeze on bearish traders pushed Bitcoin (BTC) toward $62,000, capping the market’s first genuinely strong week since mid June. It improved its value by 1.8 per cent to $61,644.94.
Data from Coinglass showed that traders betting against crypto lost $281 million to liquidations over the past 24 hours, against $159 million in longs, out of $440 million in total forced closures across 95,690 traders.
Cardano (ADA) rose by 6.6 per cent to $0.1651, Ethereum (ETH) soared by 5.5 per cent to $1,716.65, Ripple (XRP) appreciated by 4.2 per cent to $1.10, Dogecoin (DOGE) grew by 3.3 per cent to $0.0751, Solana (SOL) also chalked up 3.3 per cent to sell at $80.95, Binance Coin (BNB) added 2.0 per cent to close at $562.22, and TRON (TRX) jumped by 1.0 per cent to $0.3186, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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