Economy
Stakeholders Bullish on Nigeria’s Energy Investment Prospects
By Adedapo Adesanya
The 2023 edition of the African Energy Week (AEW) conference and exhibition concluded in Cape Town, South Africa, on Thursday and for Nigeria, the conference provided a platform for top industry executives to promote energy investment prospects in Africa’s largest economy.
During the Invest in Nigeria Energies spotlight, moderated by Mr Mansur Mohammed, Head of West Africa Upstream Content, sub-Saharan Africa Oil and Gas, Wood Mackenzie, stakeholders from top companies examined the need to develop, exploit, and monetise Nigeria’s 37 billion barrels of crude and 200 trillion cubic feet of natural gas resources to ensure energy security and socioeconomic development.
Commenting on why Nigeria is an appealing energy investment destination, Mr Anim Osadebe John, Managing Director of Platform Petroleum Limited, said, “Nigeria has a lot of proven natural resources which remain untapped despite the country exploiting these resources for the past six decades. We have a growing population which makes the country a huge market to invest in.”
He added that Nigeria’s access to free markets such as Ghana, the Ivory Coast, and other international markets guarantees investors heavy profits.
Speaking on best practices to maximize existing opportunities while creating new ones, Mr Anthony Ellis, Commercial Director, Century Group said there is a need to develop new infrastructure and modernize existing assets.
Mr Ellis highlighted the importance of collaboration across the entire value chain. He said, “Capacity building needs to be prioritized by both the government and investors coming into the country.”
On her part, Mrs Ama Ikuru, General Manager, Capacity Building Division, Nigerian Content Development and Monitoring Board (NCDMB) noted that by boosting focus on local content development, Nigeria is unlocking avenues for best energy products and services and for new investments to flock in.
For Mr Bayo Adebiyi, Managing Director at Levene Energy Group, for Nigeria to attract new investments, players need to invest in the development of the country’s entire resources including oil, gas, and solar energy mix diversification.
“That is why we are investing in gas, energy decarbonization and across the midstream sector to ensure energy is delivered to consumers and that investors secure return on capital,” he said.
The panel also explored the impact of policies such as the Petroleum Industry Act (PIA) 2021 in creating investment opportunities.
Mr Adebiyi stated that the policy needs to be leveraged to create separate regulators for the downstream and midstream sector when speaking on additional changes that the Nigerian government need to apply to the PIA to enhance the law’s effectiveness in driving energy investments.
Mr Ope Osinubi, Senior Associate at Clifford Chance, said the PIA is a step in the right direction, adding that the policy has “given clarity to aspiring investors and guaranteeing stability for existing players. Great start, but more needs to be done.”
Mr Richard Kennedy, Chairman and Managing Director, Chevron Nigeria Limited, noted that Nigeria has a lot of potential with deepwater resources yet to be exploited.
“For oil and gas investments to grow and Nigeria to achieve market growth aspirations, deepwater discoveries will play a crucial role. There are a lot of discoveries, we just need the fiscal terms to be improved to unlock the potential,” he said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 1.41 per cent on Wednesday, March 25, with the market capitalisation adding N35.04 billion to close at N2.512 trillion versus the previous session’s N2.477 trillion, and the Unlisted Security Index (NSI) expanding by 58.55 points to 4,198.85 points from 4,140.30 points.
The growth came amid a weak investor sentiment, as the OTC securities exchange recorded two price gainers and three price losers.
The advancers were led by Okitipupa Plc, which chalked up N25 to sell at N275.00 per share compared with the previous day’s N250.00 per share, and Central Securities Clearing System (CSCS) Plc grew by N7.43 to N86.37 per unit from N78.94 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc lost N7.04 to sell at N101.13 per share versus Tuesday’s closing price of N108.73 per share, Geo-Fluids Plc went down by 9 Kobo to N2.89 per unit from N2.98 per unit, and Industrial and General Insurance (IGI) Plc dipped 3 Kobo to 50 Kobo per share from 53 Kobo per share.
Yesterday, the volume of securities rose by 135.6 per cent to 2.2 million units from 933,125 units, the value of securities increased by 2.4 per cent to N46.7 million from N45.6 million, and the number of deals grew by 27.6 per cent to 37 deals from 29 deals.
The most active stock by value on a year-to-date basis was CSCS Plc with 39.1 million units exchanged for N2.4 billion, followed by Infrastructure Guarantee Credit Plc with 400 million units valued at N1.2 billion, and Okitipupa Plc with 6.5 million units traded for N1.2 billion.
The most traded stock by volume on a year-to-date basis was Resourcery Plc with 1.1 billion units worth N415.7 million, followed by Infrastructure Credit Plc with 400 million units sold for N1.2 billion, and Geo-Fluids Plc with 132.9 million units transacted for N510.7 million.
By Adedap0 Adesanya
The value of the Naira fell against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, March 25, by N4.07 or 0.29 to N1,386.70/$1 compared with Tuesday’s closing price of N1,382.63/$1.
This was due to forex demand pressure without substantial supply from the Central Bank of Nigeria (CBN) and other sources. Lately, the central bank has not conducted any FX sales to eligible financial institutions, where Bureaux de Change (BDC) operators are allowed to access $150,000 weekly.
Also, in the official market, the Nigerian Naira depreciated against the Pound Sterling at midweek by N7.52 to close at N1,856.38/£1 versus the previous day’s N1,848.86/£1, and retreated against the Euro by N5.82 to trade at N1,605.80/€1 versus N1,599.98/€1.
The domestic currency further lost N3 against the greenback at the GTBank FX desk yesterday to sell for N1,391/$1, in contrast to the preceding session’s N1,388/$1, and at the black market, it depreciated by N5 to quote at N1,405/$1 compared with the N1,400/$1 it was exchanged a day earlier.
The prolonged conflict in the Middle East continues to heighten risk aversion, reducing appetite for emerging-market assets despite Nigeria’s attractive yield environment, which could help sustain offshore inflows and support the local currency in the near term, though structural challenges remain.
The country is making efforts that could help shield it further, including reviewing timelines for approval of resuscitation of moribund oil wells and boosting production, which accounts for over 60 per cent of FX earnings.
As for the cryptocurrency market, it was under pressure on Wednesday, as implied volatility and weakening suggest geopolitical risk concerns remain as macro headlines remain in focus.
Dogecoin (DOGE) depleted by 3.8 per cent to $0.0937, Solana (SOL) depreciated by 3.5 per cent to $89.10, Cardano (ADA) dipped 2.4 per cent to $0.2621, Ethereum (ETH) went down by 2.2 per cent to $2,117.47, Ripple (XRP) slumped 1.9 per cent to $1.38, Bitcoin shrank by 1.5 per cent to $70,012.58, and Binance Coin (BNB) dropped 1.4 per cent to sell for $634.82.
However, TRON (TRX) appreciated by 2.3 per cent to $0.3144, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Adedapo Adesanya
The oil market slid about 2 per cent on Wednesday after paring deeper losses earlier in the trading session, as Iran reviewed a proposal by the United States to end the war that has disrupted global energy flows.
Brent futures fell $2.27 or 2.2 per cent to settle at $102.22 a barrel, while the US West Texas Intermediate (WTI) crude futures lost $2.03 or 2.2 per cent to trade at $90.32 per barrel.
It was reported that Iran was still reviewing a US proposal to end the war in the Gulf, despite an initial response that was negative, indicating that it had so far stopped short of rejecting it outright.
Pakistan delivered the 15-point proposal on behalf of the US government, and the consideration appeared to signal that at least some figures in Iran may be considering it.
Meanwhile, the White House Press Secretary, Mrs Karoline Leavitt, said President Donald Trump would hit Iran harder if it fails to accept that the Middle East country has been “defeated militarily”.
Currently, the market is facing the biggest-ever oil supply disruption as the US-Israel war has halted shipments of oil and liquefied natural gas through the Strait of Hormuz, which typically carries about 20 per cent of the world’s LNG and crude supply.
Market analysts noted that this has resulted in around 20 million barrels of crude losses daily, or some 500 million barrels, or five full days of global supply, since the war began on February 28. Countries have started rationing fuel use.
India, one of the world’s largest oil consumers, has bought its first cargo of Iranian liquefied petroleum gas in years after the US temporarily removed sanctions.
Meanwhile, Japan has called on the International Energy Agency (IEA) for an additional coordinated release of oil stockpiles, as it seeks to shield consumers from higher energy prices.
In Venezuela, oil production, including condensate and gas liquids, reached 1.1 million barrels per day in March.
Amid these developments, Russia’s major export terminals suspended crude oil and oil products loadings after massive Ukrainian drone attacks sparked blazes. At least 40 per cent of Russia’s oil export capacity has been halted following Ukrainian drone attacks on its energy infrastructure.
The US Energy Information Administration (EIA) said energy firms added 6.9 million barrels of crude into stockpiles during the week ended March 20.
That was higher than the build of 2.4 million barrels reported by the American Petroleum Institute (API) on Tuesday.
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