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 Index Records 0.67% Appreciation

Published

2 hours ago

29/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) recorded a 0.67 per cent appreciation on Thursday, November 28, with the portfolios of investors on the platform rising by N7.09 billion to N1.061 trillion from the N1.053 trillion it closed in the preceding session and the NASD Unlisted Security Index (NSI) growing by 20.22 points to wrap the session at 3,026.60 points compared with 3,006.38 points recorded on Wednesday.

This happened after the unlisted securities market finished the trading session with three price gainers and two price losers.

Afriland Properties Plc gained N1.58 to end at N17.39 per unit compared with the midweek’s closing price of N15.81 per unit, as Acorn Petroleum Plc improved its value by 14 Kobo to close at N1.69 per share, in contrast to the previous day’s N1.55 per share, and Central Securities Clearing System (CSCS) Plc went up by N1 to sell for N23.00 per unit compared with the preceding session’s N22.00 per unit.

On the flip side, First Trust Microfinance Bank Plc lost 4 Kobo to finish at 32 Kobo per share versus Wednesday’s closing price of 36 Kobo per share and Geo-Fluids Plc slumped by 3 Kobo to sell at N3.90 per unit compared to N3.93 per unit it was sold a day earlier.

There was a 191.9 per cent rise in the volume of securities traded in the session as investors exchanged 2.9 million units compared with the previous trading day’s 1.0 million units.

Equally, there was a 283.9 per cent surge in the value of shares traded yesterday to N7.9 million from the N2.1 million recorded in the previous day, and the number of deals increased by 300 per cent to 12 deals from the three deals executed in the preceding day.

At the close of transactions, Geo-Fluids Plc was the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, trailed by Okitipupa Plc with 752.2 million units sold for N7.8 billion, and Afriland Properties Plc with 297.3 million units worth N5.3 million.

Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 billion.

Economy

Enhanced Forex Liquidity Buoys Naira to N1,644/$1 at Official Market

Published

2 hours ago

29/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The value of the Naira rose against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.96 per cent or N15.97 to exchange at N1,644.86/$1 on Thursday, November 28 compared with the preceding day’s N1,660.83/$1 amid a surge in FX transactions.

Data showed that the forex turnover increased during the session by 66.2 per cent or $223.27 million to $560.34 million from the $337.07 million recorded at the midweek trading session.

However, the domestic currency weakened against the Pound Sterling in the official market by N8.42 to sell at N2,124.86/£1 compared with the preceding session’s N2,116.44/£1 but appreciated against the Euro by N10.18 to quote at N1,773.18/€1 versus midweek’s closing rate of N1,783.36/€1.

A look at the parallel market showed that the Nigerian currency traded flat against its American counterpart yesterday at N1,750/$1.

Meanwhile, cryptocurrencies were largely positive as Ripple (XRP) rose by nearly 6 per cent, precisely by 5.9 per cent to trade at $1.56to as Thanksgiving holiday saw the market avoid a feared historical massacre.

Traders said the Japanese Yen briefly crossed 150 against the Dollar due to expectations of a Bank of Japan (BOJ) rate increase in December, spurred by higher-than-expected inflation data.

The movement was also likely spurred by month-end financial adjustments and low liquidity due to Thanksgiving.

Further, Cardano (ADA) went up by 3.4 per cent to trade at $1.04, Solana (SOL) jumped by 1.1 per cent to quote at $241.14, Bitcoin (BTC) went up by 0.8 per cent to settle at $95,661.36 and Binance Coin (BNB) grew by 0.2 per cent to finish at $654.44.

On the flip side, profit-taking in Dogecoin (DOGE) saw its price down by 0.5 per cent to sell at $0.4054, Litecoin (LTC) depreciated by 0.5 per cent to quote at $96.36, and Ethereum (ETH) depleted by 0.4 per cent to end the session at $3,578.26, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Nigeria’s Stock Market Rebounds by 0.50%

Published

3 hours ago

29/11/2024

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited rebounded by 0.50 per cent on Thursday after staying with the bears for a single trading session, though investor sentiment remained weak.

Business Post reports that the market breadth index was negative yesterday with 28 appreciating stocks and 29 depreciating stocks.

Vitafoam Nigeria was the best-performing equity during the trading day after it went up by 9.81 per cent to sell for N23.50, Aradel Holdings appreciated by 9.23 per cent to N517.00, FTN Cocoa rose by 7.82 per cent to N1.93, Sovereign Trust Insurance grew by 6.25 per cent to 68 Kobo, and Oando gained 5.40 per cent to quote at N65.35.

On the flip side, Prestige Assurance ended the day as the worst-performing equity after it shed 10.00 per cent to close at 81 Kobo, Unilever Nigeria lost 9.97 per cent to settle at N26.65, Austin Laz depleted by 9.96 per cent to N2.17, John Holt waned by 9.90 per cent to N8.92, and Eterna fell by 6.94 per cent to N20.80.

During the session, the energy and the consumer goods sectors went down by 0.50 per cent and 0.11 per cent, respectively.

However, the banking index improved by 0.74 per cent, the insurance counter expanded by 0.23 per cent, and the industrial goods space increased by 0.15 per cent.

As a result, the All-Share Index (ASI) jumped by 487.24 points to 97,783.81 points from the 97,296.57 points recorded in the preceding day and the market capitalisation grew by N305 billion to settle at N59.275 trillion compared with Wednesday’s closing value of N58.970 trillion.

Yesterday, the value of transactions expanded by 4.85 per cent to N10.8 billion from the N10.3 billion recorded a day earlier, as the volume of trades shrank by 23.08 per cent to 632.7 million shares from the 822.5 million shares traded at midweek and the number of deals tumbled by 10.45 per cent to 8,404 deals from the 9,385 deals achieved in the previous day.

FBN Holdings was the busiest stock at the market on Thursday with a turnover of 166.8 million units worth N4.2 billion, Haldane McCall traded 119.3 million units valued at N669.8 million, Guinea Insurance transacted 41.3 million units for N20.7 million, Cutix sold 38.5 million units worth N90.5 million, and Access Holdings exchanged 20.6 million units valued at N473.6 million.