NIGERIA: THE CRUDE OIL ECONOMY

Synterra the Nigeria Risk Management Consultants provide insight into how the oil markets affect the Nigerian economy. Nigeria's reliance on crude oil receipts is total. At a time of increasing volatility and uncertainty this blog seeks to provide an analysis of the effect the global energy markets have on business in Nigeria, their relationship with OPEC and how local policy decision making affects investment opportunities.

DPR STILL ALLOW IMPORT OF KILLER PMS INTO NIGERIA

 When the Stakeholder Democracy Network (SDN) an international non-governmental organisation broke the news, it re-exposed a racket that has been going on for years. Nigeria has been for a while the choice destination for dumping the worst, most carcinogenic, toxic refined petroleum products on the planet. Indeed such is the preponderance of o...
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SYLVA SHOULD NOT COMPENSATE OPEC

Nigeria agree to compensate OPEC by further cutting production  Nigeria should not be in the nonsensical position that it has to compensate OPEC by making additional production cuts as other producers increase their output. At the 20th meeting of the OPEC, Joint Ministerial Monitoring Committee (JMMC) which took place on Wednesday, 15 Jul...
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DEREGULATION WILL SAVE NIGERIA TRILLIONS IN SUBSIDY

SYLVA MAKES THE CASE FOR DEREGULATION   A virtue signalling Minister of State for Petroleum Resources Chief Timipre Sylva in a statement recently released in Abuja was at pains to point out the economic benefits of deregulation of the downstream oil sector . The main thrust of his statement re-iterates arguments some of us having been mak...
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NNPC CLOSE REFINERIES AFTER LOSING $503 MILLION ANNUALLY

When it first emerged the only surprise was that the Nigerian National Petroleum Corporation (NNPC) had for the first time in its history published audited accounts. The fact that this is an historic event says it all. The financial statements provide in part a snapshot of a poorly run organisation with many of its subsidiaries insolvent which was ...
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NIGERIAN PMS DEREGULATION WITH A PRICE CAP SET BY PPPRA

Deregulationit would appear is finally upon Nigeria, or probably not. An incoherent and ostensibly contradictory statement made by The Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu cast doubt on earlier proclamations as he seemed to suggest that the market would not set the price for gasoline and ...
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OPEC+ ALLIANCE PLOT TO FIND A WAY TO PLEASE THE OIL MARKET

The out and out oil price war has now entered its next phase and has become the chess game that is the new contest for market share. The trigger for this shift was always going to be China's resurgent crude oil imports and the seeming revival of a region that appears to have put the worst of the COVID-19 pandemic demand destruction behind it&n...
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NIGERIA LOSES OVER $440M REVENUES AS OPEC PRODUCTION CUTS TAKE EFFECT

Nigeria is projected to have lost over N160 billion in deferred revenue to a cut in the daily crude oil production by members of the Organisation of Petroleum Exporting Countries (OPEC) in May. However, the impact on gross receipts may be reduced as the country is expected to close the revenue gap with a substantial increase in the international pr...
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SAUDIS FEEL THE HEAT AS THE U.S. UPS THE PRESSURE ON OIL

Saudi Arabia  made what has been described as  a surprise announcement,  it will voluntarily deepen its crude oil output cuts. The announcement stated that this voluntary output cut would take effect from June.

The cut is an additional  1 million barrels per day which will reduce Saudi  production to the lowest level in 18 years. The ostensible reason given by the Saudis is to  hasten  a recovery from the crash in oil price benchmarks which has pitched them  into austerity. According to Energy Minister Abdulaziz bin Salman Al Saud, Saudi Arabia wanted to be ahead of the curve.

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WHAT IS BEHIND NIGERIA'S MARGINAL FIELD BID ROUND?

The Nigerian national oil company has eventually come to its senses and arrived at the position every other rational actor in the industry has advocated and postponed  the full blown Oil bid round which was announced last month as scheduled to take place within 2 weeks. 

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