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Business News

Nigeria’s crude oil output exceeds benchmark as daily production hit 2.323 million barrels

The Nigerian National Petroleum Corporation (NNPC) has disclosed that Nigeria’s crude oil has exceeded the 2.3 million barrels per day benchmark as the average daily production hit 2.323 million barrels per day.

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Nigeria's crude oil output

The Nigerian National Petroleum Corporation (NNPC) has disclosed that Nigeria’s crude oil has exceeded the 2.3 million barrels per day benchmark as the average daily production hit 2.323 million barrels per day.

This disclosure was made by the Group Managing Director of the petroleum corporation, Dr. Maikanti Baru, while receiving officials from the Nigerian Union of Journalists (NUJ) in Abuja on Tuesday.

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According to Baru, the figure of crude oil output recorded on Monday was a significant improvement compared to the daily average production of 2.1 million barrels obtained in 2018. This figure also is seen to have exceeded the 2019 budget benchmark which is pegged at 2.3 million daily barrels.

Since we came in July 2016, we had been focused on increasing production of oil and gas and condensates. At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on, averaging last year, about 2.1 million barrels.

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The NNPC chief stated that the petroleum corporation had also recorded a significant increase in its gas output, stressing that the company has grown Nigeria’s gas production currently, to 1.5 billion standard cubic feet, SCF, per day from about 450 million standard cubic feet daily.

Dr. Baru also revealed that NNPC officials are in negotiations for foreign direct investments for the petroleum industry in Nigeria to the tune of $7 billion. This, according to Baru is a significant improvement from the 2017 figure recorded at $3.6 billion in form of FDI.

“Our drive for transparency has also produced a lot of fruits. We have been able to attract Foreign Direct Investments, FDI, into the oil and gas industry and in 2017 alone, we have attracted about $3.6 billion. In 2018, we have shot up by $3 billion; at the moment, some of our officers are in London, where they are negotiating sums in the region of $7 billion as FDI for the oil and gas sector.”

Speaking on the cost of production, the NNPC helmsmen revealed that the company has been able to minimise the cost of production to $22 from $27 per barrel in the firm’s Joint Venture operations. He further noted that the corporation is on the lookout for means to bringing the cost to $20 per barrel.

As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million barrels a day. This stability and ability to push production has come as a consequence of several factors, both internally, externally and also with the help of the media.

When asked about the state of the Nigerian refineries, Baru disclosed that FG presently lacks funds to finance the revamping of the country’s refineries. According to him, the petroleum corporation is currently inspecting the refineries with some contractors, who will submit their findings to the financiers who will finance the rehabilitation.

At the Port Harcourt refineries, the contractors are on site; they are carrying out every checks and lots of non-destructive testing. We believe that by the end of October we would have detailed review and we would approach our financiers, clearly on financing basis; raise the funds because they are quite willing to fund the operations.

“NNPC would do that and pay the loans as appropriate, being that government does not have sufficient funds to finance the refineries rehabilitation. That is why it is taking time.

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Note that the increase in the daily production against the 2.3 million barrels benchmark in the 2019 budget is an indication that the Nigerian oil sector is poised to generate more revenue to the country’s GDP.

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However, the movement of crude oil price in the world crude oil market remains a major determining factor to capital inflow into the economy. The activities of militants in the Niger Delta region, as well as pipeline vandalism and crude oil theft,  are also factors to consider.

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Charles Abuede is a graduate of Economics and Statistics from the University of Benin. He has worked as a business correspondent at Voidant Wireless Service (Pryde TV) and Entrepreneurs.ng. He is currently a Research Analyst at Nairametrics. You can reach him on [email protected] or @CharlesAbuede on LinkedIn and @AbuedeCharles on twitter.

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Companies

Nigeria’s border reopening will not impact profitability in 2021 – Flour Mills GMD

Flour Mills Nigeria Plc has stated that the recent reopening of the nation’s land borders will not affect the profitability of the company.

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Mr. Omoboyede Olusanya, the Group Managing Director of Flour Mills Nigeria Plc has disclosed that the recent reopening of the nation’s land borders will not adversely impact the performance and profitability of the company in 2021 and beyond.

He added that FMN will continue to leverage brand loyalty, product standardization and innovation, as well as improved cost efficiency to increase profitability in 2021.

This statement was made by the Olusanya during the company’s 9M’20/21 Investor Webinar which held virtually on January 26, 2020.

According to the statement made by Mr. Olusanya at the virtual meeting, the reopening of the nation’s land border will not affect the company’s sales and revenue, as Flour Mills Nigeria is focused on increasing operational efficiency with accelerated plans for cost optimizations across the group to ensure competitive product offerings and profitability in the new operating environment, occasioned by the border reopening.

He revealed that the company will continue to invest in local content development, production capacity and aggregation to strengthen product innovation and product standardization in a bid to foster brand loyalty.

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In line with this, Flour Mills Nigeria has invested heavily to upscale its Regional Distribution Centers (RDCs), in order to gain direct access to consumer market segments across the country, and expand consumer reach with the road to market initiatives and product offerings across the group, especially in the B2C segment.

Olusanya revealed that the group has successfully opened new regional distribution centers (RDCs) in Kano, Magboro and Abuja targeting the new fast-growing B2C product categories (fats, sugar and garri).

He added that the FMN Group among other strategic investments made, has invested in trucks to support the RDCs, animal feeds and starch value chains; as well as sales force automation platforms to ensure high-quality processes and services.

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He concluded that the activities of the company will be complemented by the efforts of the nation’s border security, as these agents would ensure that the borders do not become porous, and would help to curtail markets from being proliferated by imported items.

What you should know

  • Recall that Nairametrics reported that Flour Mills Nigeria Plc declared a profit of N5.65 billion in the third quarter ended, 31st December 2020.
  • The report revealed that the profit which Flour Mills made in the third quarter of its accounting year 2020/2021 rose by a whopping 150.36% when compared to the profit it made in the corresponding period of 2019.
  • It is important to note that the impressive performance of the company was driven by the agro-allied segment. The Agro-Allied segment benefited immensely from the August 2019 border closure, as the profit from this segment improved by 15,268%.

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Coronavirus

South African President appeals to wealthy countries not to hoard COVID-19 vaccines

South African President, Cyril Ramaphosa has called on the world’s wealthiest countries to stop “hoarding” vaccines.

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South Africa High commission in Nigeria shuts its offices, South Africa announces 21-day lockdown following spike in Coronavirus cases

The South African President, Cyril Ramaphosa has urged the world’s wealthiest countries to stop “hoarding” vaccines and called for an end to “vaccine nationalism.”

He made this call at the World Economic Forum’s virtual Davos Agenda event, where he clearly cautioned that some countries had ordered more supplies of vaccines than they needed, and that this was counterproductive to the global recovery effort.

According to him,

  • “Ending the pandemic worldwide will require greater collaboration on the rollout of vaccines, ensuring that no country is left behind in this effort”
  • “The rich countries of the world went out and acquired large doses of vaccines from the developers and manufacturers of these vaccines, and some countries have even gone beyond and acquired up to four times what their populations need”
  • “That was aimed at hoarding these vaccines and now this is being done to the exclusion of other countries in the world that most need this”

What they are saying

According to Africa CDC Director, John Nkengasong, the African continent is quite facing a “very aggressive second wave” of the pandemic, with mortality increasing on average 18% across the 55 African member states last week.

“We as a continent must recognize that vaccines will not be here when we want them, but as such we need to really focus on the public health measures that we know work”

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He however praised the progress of the African Vaccine Acquisition Task (AVAT) Team, which he said was created when AU nations realized “how the world’s richest countries are behaving.”

What you should know

  • South Africa is the country, worst hit by Covid-19 on the continent.
  • As at date, the country had recorded more than 1.4 million cases with 41,117 deaths.
  • The African Vaccine Acquisition Task (AVAT) Team has secured a provisional 270 million doses for AU member states directly, in addition to the 600 million expected from the World Health Organization’s COVAX initiative.

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Coronavirus

IMF optimistic about global economy but warns new Covid variants could affect recovery

IMF is quite optimistic about the fortune of the global economy but expressed fear that the new Covid variant could derail economic recovery.

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IMF

The International Monetary Fund (IMF) has expressed optimism about the global economy but warns that the new COVID 19 variant could affect the global economic growth, according to its latest World Economic Outlook.

According to the report, “the institution now expects the global economy to grow 5.5% this year — a 0.3 percentage point increase from October’s forecasts. It sees global GDP (gross domestic product) expanding by 4.2% in 2022”.

According to its Chief Economist, Gita Gopinath:

  • “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens.
  • “There remains tremendous uncertainty and prospects vary greatly across countries.
  • China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies. The United States is projected to surpass its pre-Covid levels this year, well ahead of the euro area.
  • “Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence.”

What you should know

  • There has been a surge in the number of reported cases of the new variant Covid-19 infections and deaths over the past few months.
  • The new variant has been described as being more infectious and potentially deadlier than the original strain.
  • The IMF had cut its GDP forecasts for the euro zone this year by 1%.
  • It is being projected that the 19-member region, which has been severely hit by the pandemic, would grow by 4.2% this year.
  • Germany, France, Italy and Spain — the four largest economies in the euro zone — also saw their growth expectations cut for 2021.
  • Economic activity in the region slowed in the final quarter of 2020 and this is expected to continue into the first part of 2021. The IMF does not expect the euro area economy to return to end-of-2019 levels before the end of 2022.
  • IMF revised its GDP forecast upward by 2% points on the back of a strong momentum in the second part of 2020 and additional fiscal support, with GDP expected to grow to 5.1% this year.

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