Business

Budget 2023: Fears As Oil Price Drops 3% To $73.87 Per Barrel

Published

1 year ago

March 26, 2023

Editor

There were fears, weekend, as the price of Nigeria’s premium oil grade, Bonny Light, dropped to $73.87 per barrel, from $76.37, recorded last week, indicating a fall of three percent.

The Federal government had benchmarked the 2023 budget at $75 per barrel and 1.8 million barrels per day, bpd, including condensate, which Nigeria has the capacity to produce between 300,000 – 400,000 barrels per day, bpd.

The drop in price that also affected other crudes was attributed to the global economic slowdown, especially some developed economies that buy commercial oil from Nigeria and other major oil nations.

In its latest report obtained by Vanguard, yesterday, Goldman Sachs – a research organization – disclosed that based on the global economic slowdown, it would not be possible for oil to hit $100 per barrel this year, which it had earlier forecasted.

Goldman Sachs noted that the current poor state of the global economy has already culminated in the collapse of two big banks in the United States.

The report which now expects oil price to hover at $94 per barrel in the coming 12 months, before landing at $97 per barrel in 2024, stated: “Oil prices have plunged despite the China demand boom given banking stress, recession fears, and an exodus of investor flows.”

Oil price, production

In its March 2023 Monthly Oil Market Report, Monthly Oil Market Reports, MOMRs, obtained by Vanguard, the Organisation of Petroleum Exporting Countries, OPEC, that Nigeria’s oil production rose MoM by 3.8 percent to 1.306 million bpd in February 2023, from 1.258 million bpd recorded in the preceding month of January 2023.

Also, on year-on-year, YoY, the nation’s oil production increased by 3.8 percent to 1.306 million bpd in February 2023, from 1.258 million bp/d recorded in the corresponding period of 2022.

Budget 2023 challenged — OGSPAN

Despite the rise in oil output, the National President, Oil, and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, observed that Nigeria might be challenged to meet its 1.8 million bpd OPEC quota, excluding condensate, because of increased pipeline vandalism, oil theft and illegal refining in the Niger Delta.

He said: “The governments still have a long way to go in funding the budget. We should not be comfortable because of the recent increase in production. There are indications that the recent gains remain by far less than the huge volumes we still lost to oil thieves in the Niger Delta.”

But in another interview with Vanguard, the Lead promoter, EnergyHub Nigeria, Prof. Felix Amieyeofori, noted that the current market situation would be short-lived.

He said: “This is seasonal. The average price forecast as China stabilizes this year will be around $80-100 bpd. It will bounce back.”

New administration should implement PIA — EnergyHub

He said: “The new Government in 2023 must ensure full implementation of the PIA in order to optimize the operating environment for investors. Otherwise, funding will be a challenge. There must be collective efforts from all sectors and agencies between government and the private sectors to midwife the 2023 budget targets.”

We intend to produce 2.2 million bpd — NNPC Limited

Recently, the Nigerian National Petroleum Company (NNPC) Limited said in 2023, Nigeria was working to realize an average of 2.2 million barrels per day (bpd), including condensate.

Speaking in an interview session at the 13th global United Arab Emirate, UAE virtual energy forum, Mele Kyari, group chief executive officer (GCEO), NNPC Limited, who attributed low production to the limited investment of the past, had said: “In our case, we have a different challenge other than just a lack of investment in the last four to five years. There has been no investment in the last four to five years. That is correct. That is true in many other jurisdictions where cash flows do not support the investment.

“In our case, we had a different challenge – security challenge – that became very manifest in early-2022. And of course, we took definite steps to bring back production and this is paying up.

“For instance, in around July, our net crude oil, excluding condensate, came down to around 1 million bpd. That is the lowest ever in the history of our country and our industry.”

He also said: “So for us, we see a trajectory of restoring production, including condensate, within the year. Definitely, we believe that we can hit our target of 2.2 million bpd but our OPEC target is 1.8 million bpd, but we know that it is practical to do 2.2 million within 2023.”
VANGUARD

Business

Stock Market Review: FBN Holdings Leads 41 Others As Investors Gain N811bn

Published

18 hours ago

May 4, 2024

Editor

FBN Holdings Plc has topped 41 other advanced equities to pull the Nigerian Exchange Ltd.(NGX) market indices up by 1.46 per cent, week-on-week, making investors gain N811 billion.

The market, having opened for four days in the week, following the May Day holiday, had FBN Holdings leading the gainers’ table by 32.68 per cent to close at N27 per share.

Sterling Financial Holdings followed by 27.75 per cent to close at N4.88, while UACN gained 24.60 per cent to close at N15.45 per share.

Julius Berger added 23.76 to close at N72.40, while Flour Mills rose by 20.66 per cent to close at N36.80 per share.

Conversely, Nascon Allied Industries Plc led the losers’ table by 17.03 per cent to close at N43.60, University Press trailed by 16.67 per cent to close N2.05 per share.

Neimeth International Pharmaceuticals shed 14.14 per cent to close at N1.70, Berger Paints Plc declined by 9.87 per cent to close at N13.70 and Vitafoam Nigeria lost 9.81 per cent to close at N17 per share.

Meanwhile, 42 equities appreciated in price during the week, higher than 27 equities in the previous week.

Thirty-six equities depreciated in price, lower than 43 in the previous week, while 76 equities remained unchanged, lower than 84 recorded in the previous week.

Consequently, the All-Share Index and Market Capitalisation appreciated by 1.46 per cent to close the week at 99,587.25 and N56.323 trillion, respectively, in contrast to 98,152.91 and N55.512 trillion posted last week.

Similarly, all other indices finished higher with the exception of NGX Consumer Goods, NGX Oil and Gas and NGX Industrial Goods which depreciated by 0.26, 0.68 and 0.36 per cent, respectively, while NGX ASeM and NGX Sovereign Bond indices closed flat.

Meanwhile, a total turnover of 1.941 billion shares worth N32.644 billion in 35,807 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.839 billion shares, valued at N34.258 billion, that exchanged hands last week in 37,528 deals.

The financial services industry measured by volume led the activity chart with 1.496 billion shares valued at N22.453 billion traded in 19,225 deals, thus contributing 77.08 and 68.78 per cent to the total equity turnover volume and value, respectively.

The consumer goods industry followed with 144.722 million shares worth N5.063 billion in 4,966 deals.

In the third place was the conglomerates industry, with a turnover of 109.978 million shares worth N1.539 billion in 2,064 deals.

Trading in the top three equities, namely Abbey Mortgage Bank Plc, Guaranty Trust Holdings Company Plc and Access Holdings Plc, measured by volume, accounted for 898.940 million shares worth N14.314 billion in 5,518 deals.

These contributed 46.31 and 43.85 per cent to the total equity turnover volume and value, respectively.

(NAN)

Business

BREAKIN: NDIC Increases Maximum Deposit Insurance Coverage

Published

3 days ago

May 2, 2024

Editor

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday increased the maximum deposit insurance coverage levels for Deposit Money Banks from N500,000 to N5 million.

The Managing Director of NDIC, Bello Hassan, announced this in Abuja at a press conference, stating that it takes effect immediately.

He said, “For Deposit Money Banks, the increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%.

“In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.

“The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000, would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of total value of deposit, currently covered.

“The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of total value of deposit, currently covered.”

Hassan also stated that raising the maximum deposit insurance coverage for primary mortgage banks from N500,000 to N2,000,000 would provide full coverage for 99.99% of total depositors and increase the value of deposits covered by deposit insurance to 43.10% of the total deposit value, up from the current 40.60% cover.

The Corporation has also raised the maximum pass-through deposit insurance coverage for subscribers of Mobile Money Operators from N500,000 to N5,000,000 per subscriber.

Business

Dangote Speaks On Devaluation Of Naira

Published

4 days ago

May 1, 2024

Editor

Chairman of Dangote Industries Limited, Aliko Dangote has said that the devaluation of Naira created the biggest mess for the company in 2023.

Speaking at the annual general meeting of Dangote Sugar Refinery, Dangote said this affected lots of companies in the country.

He said: “We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends because if you look at our dividends last year, it was almost 50 percent more so we will try and get out of the mess.

“The biggest mess created was actually the devaluation of the naira from N460 to N1,400. You can see almost 97 percent of the companies, especially in food and beverages businesses, none of them will pay dividends this year for sure but, we will try and get out of it as soon as possible.

“We want to see that at the end of the day, no matter how small, we will be able to pay some dividends, especially if there is a rebound of the naira.”