Economy
FG Targets N29trn from Revived Crude Oil Wells
By Adedapo Adesanya
The federal government is targeting more than N29 trillion from the revived shut-in crude oil wells, which are estimated to produce about 2.1 million barrels of oil per day.
Data obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja on Tuesday showed that about 900,000 barrels of oil per day could be produced from quick interventions on the shut-in wells, while the medium and long-term initiatives could add 1.2 million barrels of oil daily. This implies that about 2.1 million barrels of oil per day, or 63 million barrels monthly, would be produced from the facilities. The country could generate N2.4 trillion monthly from various drilling facilities in the Niger Delta.
According to estimates by the Punch Newspaper, with an average price of $83/barrel for Brent, the global benchmark for crude, the government would earn about $5.23 billion monthly, which translates to N2.41 trillion at the official exchange rate of N460.97/$) through oil production.
In his latest industry paper titled, Nigerian Upstream Petroleum Sector: Value Optimisation, Energy Transition and Regulatory Perspectives, the chief executive of NUPRC, Mr Gbenga Komolafe, said a committee was currently working on reviving the shut-in wells.
He said, “As part of our strategy for value optimisation and increased production from our national oil and gas reserves, the commission has focused on a regulatory initiative aimed at reviving declining wells through an enhanced oil recovery approach.
“We are working with operators to identify candidate wells and appropriate interventions that would lead to increased production. In addition, the commission is focusing on shut-in wells which can be revived.
“In pursuance of this, the commission inaugurated a committee on June 23, 2022, to conduct an industry-wide study on reactivation of shut-in strings.”
Mr Komolafe said the committee had submitted its report, which had recommendations categorised into quick wins, and medium and long-term initiatives that would enhance national oil and gas production volumes.
“Findings from the report revealed that over 900,000 barrels of oil per day can be earned from the quick win interventions while the medium and long-term initiatives could potentially add 1.2 million barrels of oil per day if properly and fully implemented,” he stated.
The NUPRC boss added, “The total number of strings that need to be revived is also known, and we have commenced engagement with the relevant operators to operationalise the initiative.”
Mr Komolafe explained that this was in alignment with the commission’s objectives, as outlined in Section 6 of the Petroleum Industry Act (PIA) 2021.
He noted that based on this, the commission was pursuing the basic regulatory goals, which include increasing Nigeria’s oil and gas reserves and production, developing a transparent approach to hydrocarbon accounting, and attaining operational efficiency and effectiveness in industry operations.
“In addition, the commission is committed to facilitating peace and harmony in the host communities to guarantee a conducive operating environment for investors, positively impacting on operating cost and attracting more investment opportunities,” he stated.
Mr Komolafe said there had been strategic actions for hydrocarbon value optimisation by the commission, adding that in keeping with industry laws and regulations, the NUPRC had issued an oil licensing round guideline.
He said the commission had also published a round licensing plan for a total of seven open oil blocs, including 300-DO, 301-DO, 302-DO, 303-DO, 304-DO, 305-DO and 306-DO.
“We are currently evaluating the Expression of Interest received from prospective investors. The exercise is indeed expected to be a huge success for Nigeria and a big step towards growing the nation’s oil and gas reserves.
“This will be done through aggressive exploration and development efforts,” he stated.
By Adedapo Adesanya
The United Arab Emirates has announced its decision to quit the Organisation of the Petroleum Exporting Countries (OPEC) to focus on national interests.
This dealt a heavy blow to the oil-exporting group at a time when the US-Israel war on Iran had caused a historic energy shock and rattled the global economy.
The move, which will take effect on May 1, 2026, reflects “the UAE’s long-term strategic and economic vision and evolving energy profile”, a statement carried by state media said on Tuesday.
“During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all,” it added. “However, the time has come to focus our efforts on what our national interest dictates.”
The loss of the UAE, a longstanding OPEC member, could create disarray and weaken the oil cartel, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei said the decision was taken after a careful look at the regional power’s energy strategies.
“This is a policy decision. It has been done after a careful look at current and future policies related to the level of production,” the minister said.
OPEC’s Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a narrow chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas supplies normally pass, because of threats and attacks against vessels during the war.
The UAE had been a member of OPEC first through its emirate of Abu Dhabi in 1967 and later when it became its own country in 1971.
The oil cartel, based in Vienna, has seen some of its market power wane as the US has increased its production of crude oil in recent years.
Additionally, the UAE and Saudi Arabia have increasingly competed over economic issues and regional politics, particularly in the Red Sea area.
The two countries had joined a coalition to fight against Yemen’s Iran-backed Houthis in 2015. However, that coalition broke down into recriminations in late December when Saudi Arabia bombed what it described as a weapons shipment bound for Yemeni separatists backed by the UAE.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested four price decliners on the NASD Over-the-Counter (OTC) Securities Exchange on Monday, April 27. The alternative stock market opened the week bullish during the session with a 0.03 per cent uptick.
According to data, the security depository company added N2.61 to its share price to close at N76.26 per unit compared with the preceding session’s N78.87 per unit.
As a result, the market capitalisation of the platform increased by N820 million to N2.425 trillion from N2.424 trillion, and the NASD Unlisted Security Index (NSI) gained 1.38 points to finish at 4,053.97 points compared with the 4,052.58 points it ended last Friday.
The four price losers were led by NASD Plc, which slumped by N3.80 to sell at N34.70 per share versus N38.50 per share. FrieslandCampina Wamco Nigeria Plc fell by N1.45 to N98.10 per unit from N99.55 per unit, Food Concepts Plc slid by 27 Kobo to N2.43 per share from N2.70 per share, and Geo-Fluids Plc dipped by 9 Kobo to N2.91 per unit from N3.00 per unit.
The value of securities transacted by market participants went down by 82.0 per cent to N7.4 million from N41.3 million units, the volume of securities declined by 28.5 per cent to 319,831 units from 447,403 units, and the number of deals dropped by 34.1 per cent to 29 deals from 44 deals.
Great Nigeria Insurance (GNI) Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 59.6 million units sold for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Also, GNI Plc was the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Resourcery Plc with 1.1 billion units traded for N415.7 million, and Infrastructure Guarantee Credit Plc with a turnover of 400 million units worth N1.2 billion.
By Adedapo Adesanya
The first trading day of the week in the currency market was bearish for the Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 27.
Yesterday, it lost N5.80 or 0.43 per cent against the United States Dollar to trade at N1,364.24/$1, in contrast to the N1,358.44/$1 it was traded last Friday.
In the same vein, the Nigerian currency depreciated against the Pound Sterling in the official market by N13.70 to close at N1,847.72/£1 versus the preceding session’s N1,834.02/£1, and slumped against the Euro by N11.56 to sell at N1,602.29/€1 versus N1,590.73/€1.
Also, the Nigerian Naira tumbled against the greenback during the trading day by N5 to quote at N1,385/$1 compared with the previous rate of N1,380/$1, and at the GTBank FX desk, it traded flat at N1,370/$1.
The poor performance of the domestic currency could be attributed to liquidity shortage at the official currency market on Monday, which came amid surging demand for international payments. At $76.50 million, interbank liquidity printed higher across 79 deals, up from the $43.572 million reported on Friday.
Nigeria’s gross external reserves declined to $48.45 billion amid a month-long decline in inflows, amid uncertainties in the global commodity market. The depletion of foreign reserves could be partly attributed to the Central Bank of Nigeria’s intervention in the FX market.
The market remains perturbed by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market, while boosters, including oil prices, continue to look rocky due to stalled discussions and unclear ceasefire negotiations between the US and Iran.
A look at the cryptocurrency market, Bitcoin (BTC) has been rejected near $79,000 three times in eight sessions, leaving the level as the de facto ceiling of its current trading range even as major cryptocurrencies trade lower over the past day. It lost 0.9 per cent to sell at $77,003.61.
Analysts say that upcoming US Federal Reserve policy decisions and top tech firms’ earnings this week could provide the catalyst to push bitcoin decisively above $80,000.
The market also continued to weigh Iran’s interim deal proposal to reopen the Strait of Hormuz, which failed to advance over the weekend. The White House said US officials were discussing the latest Iranian proposal but maintained “red lines” on any deal to end the eight-week war.
Solana (SOL) dropped 1.8 per cent to $84.25, Ripple (XRP) went down by 1.6 per cent to $1.39, Ethereum (ETH) depreciated by 1.3 per cent to $2,290.00, Binance Coin (BNB) declined by 0.5 per cent to $625.18, and Cardano (ADA) fell by 0.2 per cent to $0.2480.
However, Dogecoin (DOGE) rose by 2.0 per cent to $0.1002, and TRON (TRX) appreciated by 0.2 per cent to $0.3242, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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