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Energy

NNPC cultivates 2,675 hectares of cassava for Ethanol production

Ethanol is a biofuel processed from starchy crops like Maize and Cassava.

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The Nigerian National Petroleum Corporation (NNPC) has cultivated 2,675 hectares of cassava plantations for the processing of bioethanol in Kebbi state.

Kebbi state government committee on Biofuels revealed in a statement on Thursday through its Chairman, Prof. Mohammad Ka’oje.

Ethanol is a biofuel processed from starchy crops like Maize and Cassava and can be used as biofuel mainly in Brazil and the United States.

READ MORE: NNPC releases audited financial statements, refineries record losses of N154 billion

In 2017, NNPC signed an MoU with Kebbi state to cultivate 20,000 hectares of cassava and sugarcane in the Kanya district of Zuru emirate of Kebbi for biofuel production.

Ka’oje announced the scheme is a joint project between Kebbi State and NNPC which was jointly financed to the tune of N500 Million each, and 5,000 hectares of land was acquired for biofuel production.

(READ MORE: NNPC quells fears over leaking Lagos pipeline)

He added that the state government was required to provide up to 20,000 hectares for the scheme with NNPC for cassava and sugarcane, while the NNPC handles the other productions.

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“I wish to seize this opportunity to report to you that KBSG has met all its obligations under the MOU.

“In addition, it was agreed at a joint meeting of the partners that the state government should cultivate 5,000 hectares of cassava which will also form additional equity share for the state.

READ ALSO: NNPC states why it failed to fix refineries, to build 200,000 capacity refinery

“So far, 2,675 hectares have been cultivated and fully established. This is for the purpose of generating seedlings and raw material for a test run of the machinery,” he said.

He added that the NNPC would handle the land validation, feasibility studies, and soil testing and also interact with the necessary stakeholders to handle the project.

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    Energy

    BUA Group awards contract for polypropylene plant in its refinery project

    The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

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    BUA Group chairman, Abdulsamad Rabiu, African Continental Free Trade Agreement, AfCFTA, CCNN

    Nigeria’s leading indigenous conglomerate, BUA Group has announced that it has signed a contract agreement with Lummus Technology for the establishment of a polypropylene plant in its refinery and petrochemical project.

    The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

    The Chairman of BUA Group, Abdul Samad Rabiu, while disclosing the contract agreement, expressed confidence in the capacity and technical expertise of Lummus Technology to deliver a best-in-class project.

    READ: BUA says its export-focused sugar project will create jobs and checkmate price hike

    What the Chairman of BUA Group is saying

    Rabiu in his statement said, “We are pleased to sign this polypropylene contract for our BUA refinery and petrochemicals project with Lummus Technology, a world leader in delivering polypropylene solutions, which will solve the increasing demand for high-performance grade polypropylene in Nigeria, the Gulf of Guinea as well as the Sub-Saharan Africa Region.

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    READ: Dangote, BUA reconcile over sugar plant dispute after meeting with Ganduje, others

    What the President/Chief Executive Officer of Lummus Technology is saying

    On his part, the President/Chief Executive Officer of Lummus Technology, Leon de Bruyn, said that he was looking forward to working with BUA refinery on the project.

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    Leon said, “We look forward to working with BUA Refinery on this critical project and supporting the first Novolen polypropylene unit in Nigeria. Our world-class Novolen technology is well suited to meet Nigeria’s increasing demand for the growing petrochemical products market.

    It offers a flexible range of industry-leading products for all PP applications, and the industry’s lowest overall capital and operational costs while providing customers with high process reliability and flexibility in responding to market needs.”

    READ: BUA Group, French company announce progress in 200,000 bpd refinery project

    What you should know

    Lummus Novolen Technology GmbH licenses polypropylene technology and provides related engineering and technical support/advisory services. Novolen also supplies NHP® catalysts for the production of high-performance polypropylene grades in the Novolen process, and NOVOCENE® metallocene catalyst for the production of special polypropylene grades.

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    Currencies

    How rise in oil prices will impact exchange rate

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

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    Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

    Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

    Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

    Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

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    The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

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    • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

    What it means for the exchange rate

    Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

    This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

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    • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
    • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
    • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

    READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

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    However, the inclusivity of this growth may still be in question.

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