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.
Vitol Admit Bribery

VITOL CONFESS TO USING BRIBERY TO WIN OIL CONTRACTS

Vitol are the largest global independent trader of crude oil and refined petroleum products. They also have a long established joint venture (JV) called Calson with NNPC based in the offshore tax haven of Bermuda. Their  intimate relationship with NNPC has seen them beneficiaries of supply contracts, including the infamous Direct Sal...

pipelines Nigerian Refineries lose billio

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 ...

Nigerian-barrels Nigeria produces Condensates

OPEC BULLY NIGERIA INTO SUBMISSION

Nigeria have been brutally knocked back by OPEC in its attempt to maintain an exemption for its condensates production. OPEC are no longer prepared to exempt condensates counting toward its current quota. Specifically production from the Agbami field. The inescapable conclusion must be that it is now time for Nigeria to leave OPEC. The reality is t...

TIME FOR NIGERIA FIRST POLICY WITH OPEC

TIME FOR NIGERIA FIRST POLICY WITH OPEC

The much anticipated OPEC++ meeting takes place tomorrow, It is time for Nigeria to be bold and clear eyed in pursuing Nigeria’s best interests. However it remains unclear as to  what  position Nigeria have decided to adopt. We have heard a number of statements from the Minister of State for Petroleum Resources, Chief Timipre Silva, yet they seem vague and difficult to interpret. The policy is unclear, not so much as inarticulate but unarticulated. To start with Nigeria’s petroleum ministry has stated.

EXCESS CRUDE ACCOUNT A BRAZEN SLUSH FUND

EXCESS CRUDE ACCOUNT A BRAZEN SLUSH FUND

It simply cannot be the case that an  Excess Crude Account  which has swallowed a whooping $107.4 billion  since it was established should be beyond the scrutiny of  the Nigeria people. If the so called Excess Crude Account (ECA) could talk I suspect it would have a harrowing tale to tell....

INCREASE IN EQUITY SHORTS AS CRUDE PRICES COLLAPSE

INCREASE IN EQUITY SHORTS AS CRUDE PRICES COLLAPSE

After trading as high as $65.65 on Jan. 8, WTI crude oil futures have fallenWTI crude oil traded around $53.14 on the NYMEX in early Monday trading, down almost $5 a barrel in the past week and only $3 short of a 52-week low . Oil began 2020 with a quick...

NNPC FAIL NIGERIA AGAIN,TIME TO HEDGE OIL

NNPC FAIL NIGERIA AGAIN,TIME TO HEDGE OIL

There is reason for Nigerians to worry and it is not only the arrival of COVID-19. Oil price benchmarks are in freefall, crashing through resistance levels as if they were none existent. This week has seen Oil fall to its lowest price levels since July 2017 and barring  a miraculous cure...

BUHARI  TIME FOR CBN TO FLOAT THE NAIRA

BUHARI TIME FOR CBN TO FLOAT THE NAIRA

Nigeria must now prepare to accept the new reality, the time of windfall booms fuelled by surging oil revenues has come to an end. The world is awash with oil at a time the renewable footprint is ever increasing. More importantly what the global oil market is witnessing in a time of demand destruction is an existential struggle for market share. Nigeria is ill equipped to join this battle.  In the 1980s the Nigerian economy first  fell victim to a calamitous economic decline following a windfall boom  brought on  by crashing oil revenues. The same thing happened in 2014 and as a consequence drove the country into recession . It has now happened yet again in 2020. To make things worse it comes at a perilous time with COVID-19 threatening economic and societal Armageddon.

NIGERIAN OIL SHUT-IN LIKE END OF DAYS

NIGERIAN OIL SHUT-IN LIKE END OF DAYS

NIGERIA BRACES AS CRUDE OIL  SHUT-INS LOOM Brent crude the international oil price benchmark and the basis which Nigeria uses for price discovery of its crude grades fell to $22 per barrel on Monday, its lowest level in 18 years . Such a price if it persists for a short while...

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