Economy
Nigeria to Reduce Oil Production Cost to $27.55 Per Barrel
By Adedapo Adesanya
Nigeria is considering cutting the cost of producing a barrel of oil by at least five percent, the Minister of State for Petroleum Resources, Mr Timipre Sylva, has said.
The country has one of the highest costs of producing oil in the world at $28.99 per barrel compared with Saudi Arabia, which has the lowest cost at $8.98 per barrel while Iran and Iraq have their costs at $9.09 and $10.57 respectively.
Business Post reports that if this goal is achieved, the cost of production would be reduced by $1.45 per barrel to $27.55 per barrel.
Mr Sylva, speaking at the 9th edition of the Annual Practical Nigerian Content (PNC) Forum in Yenagoa, Bayelsa State, said that reduction in the cost of oil production was high in his priority for the industry.
Using the Nigerian content framework, the Minister said that he would enlist the support of local vendors to achieve this
He stated that while the government supports and encourages the patronage of local contractors, it would insist that the local vendors have an obligation to deliver premium services and support its strategy of using local content to drive down the cost of crude oil production, increase the contribution of the oil sector to the country’s Gross Domestic Product (GDP) and guarantee the security of oil production.
“In order words, we must not allow local content to become an excuse for cost overruns, slippages in project delivery schedule or shoddy jobs.
“As key stakeholders in the oil and gas industry, we must be aware that the entire country is looking up to our sector for increased revenue earnings to fund annual budgets and develop critical infrastructure,” he stated.
The Minister also explained that in addition to the industry being genuinely concerned that cost of production was the highest among OPEC countries, it must equally realise that high cost of production often affects the net revenue available to Nigeria from crude oil sales for development.
“We must, therefore, take practical steps to ensure that we curtail the various elements that contribute to the high cost of production,” he said at the event attended by stakeholders.
Mr Sylva said that with the achievements of the country in its local content policy, other African countries such as Kenya, Congo Brazzaville, Uganda, Gabon and Angola, who asked for the country’s template on local content practice and implementation, may adopt it.
He also said the government has broadened the implementation of the local content framework to other sectors of the country’s economy through the Presidential Executive Orders 03, 05 among others.
“We are also aware of the recent pledges by the local content committees of the Senate and House of Representatives to extend the Nigerian Content Act to other key sectors of the economy.
“This is because we can all see the benefits so far realised from the implementation of Nigerian Content requirements in the oil and gas industry,” he stated.
Sharing some other key priorities for the minister under him, Mr Sylva said they will be working towards the eradication of smuggling of PMS (petrol) across Nigerian borders; the completion of gas flare commercialisation programme; and the increase of crude oil production to three million barrels per day.
Other priorities include the passage of the Petroleum Industry Bill; increase of domestic refining capacity and implementation of the amended Deep Offshore and Inland Basin Production Sharing Contract Act.
By Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
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