By Adedapo Adesanya
Amid the growing concern of continuous theft of crude oil in Nigeria, Shell Petroleum Development Company of Nigeria Limited has said its existence in the country is being threatened.
According to Mr Osagie Okunbor, the company’s managing director and country chair for Shell Companies in Nigeria, this has resulted in the shutdown of two of its major pipelines.
Speaking at the just-concluded Nigeria Oil and Gas (NOG) Conference, he said oil theft was one of the reasons that Nigeria could not meet its quota of 1.8 million barrels a day instituted by the Organisation of the Petroleum Exporting Countries (OPEC) as it has recorded a constant drop in its production numbers.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in,” Mr Okunbor said without giving details at the forum.
“It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry,” the energy expert said.
Shell has operated for decades in Nigeria and together with other oil majors, is selling onshore assets to focus on deep water drilling.
Mr Okunbor said local companies which won licences to develop marginal fields would face challenges to transport their crude once they start production.
Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.
Oil theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.
The worsening state of Africa’s largest oil producer manifested in numbers recently as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria lost $1 billion in revenue during the first quarter of this year due to crude oil theft.
According to Mr Gbenga Komolafe, the head of the commission, out of the 141 million barrels of oil produced in the first quarter of 2022, only about 132 million barrels of oil were received at export terminals.
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Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.
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By Dipo Olowookere
The $1.250 billion Eurobond sold to offshore investors in March 2022 by the federal government of Nigeria has been listed at the Nigerian Exchange (NGX) Limited and the FMDQ Securities Exchange Limited.
The dual listing on the domestic exchanges was done by the Debt Management Office (DMO). It was after the paper was earlier listed on the London Stock Exchange (LSE).
The seven-year Eurobond was priced at 8.375 per cent and is expected to mature in March 2029, according to the debt office.
The DMO explained that its decision to bring the international bond to the NGX and the FMDQ Securities Exchange is to create opportunities for local investors to partake in the overall exercise as it gives them access to purchase the Eurobond through the secondary market.
“The Eurobond has been listed on the London Stock Exchange, the listing on the Nigerian Exchange (NGX) Limited and the FMDQ Securities Exchange Limited represents the DMO’s commitment to boosting capital market activities and creating opportunities for local players,” a part of the statement issued by the agency explained.
The $1.250 billion Eurobond was sold after it was approved by the National Assembly and the Federal Executive Council (FEC) in one of its meetings to execute some projects included in the 2022 budget.
“The Eurobond was issued in March 2022 based on approvals in the Appropriation Act and subsequent approvals received from the Federal Executive Council (FEC) and the National Assembly.
“The proceeds of the Eurobond were used for financing capital projects in the Appropriation Act. In addition, the proceeds contributed to an increase in Nigeria’s external reserves,” the DMO said.
By Dipo Olowookere
The desire to hedge against inflation has forced some investors back into the equity market, resulting in an increase in their participation in the landscape in the second quarter of 2022 when compared with the first quarter of the year.
According to data from the bourse, in Q2 of 2022, both local and foreign investors traded N485.4 billion worth of stocks on the Nigerian Exchange (NGX) Limited compared with the N346.4 billion traded in Q1 of 2022, indicating an increase of 40.11 per cent.
It was also gathered that in the period under review, traders bought and sold 54.3 billion equities, 143.83 per cent higher than the 22.3 billion equities transacted in the first three months of the year. In the same vein, the number of deals rose by 8.5 per cent quarter-on-quarter to 320,778 trades from 295,533 trades.
It was observed that the major attraction was some stocks with sound fundamentals as investors take a position in companies paying interim dividends as the market looks forward to half-year earnings of listed firms this month.
As a result of the buying pressure, the All-Share Index appreciated by 10.3 per cent to 51,817.59 points in Q2 2022 from 46,965.48 points in Q1 2022, while the market capitalisation grew to N27.94 trillion from N25.31 trillion.
While commenting on the trading data, the chief executive of Wyoming Capital & Partners, Mr Tajudeen Olayinka, noted that improved liquidity in the system in the last six months is responsible for the positive performance of the Nigerian stock market.
Other factors driving liquidity in the equities market, he added, are “instant payment of dividends to shareholders through electronic means (e-dividend), provides opportunities for immediate reinvestment of these dividends, especially by institutional investors, who manage funds and portfolios for clients.
“This did not leave out other traditional investors, who took advantage of low prices, in the run-up to financial year-end rallies that we saw at the beginning of the year 2022.”
He further attributed the buying interests to the “negative real return in the fixed income market and the need to hedge against inflation.”
According to him, “Equity market is an inflation adjusting market, and so, some investors who were willing to hedge against inflation, irrespective of the downside risk that the market poses, decided to bring liquidity back to the equity market.”
“The ongoing crash in the crypto market brought liquidity back to the equity market. It has been said that more Nigerian investors participate actively in the crypto space, and so, the sudden, though long expected crash in that market, made some affected Nigerian investors cut their losses, for less volatile and recoverable opportunities in the equity market.
“Availability of derivative products is encouraging more institutional investors to embrace the equity market. Investors can now short or long the market at ease. All these activities provide liquidity to the market,” Mr Olayinka further stated.
Business Post observed that in the period under consideration, the value of fixed income at the exchange rose by 38.7 per cent to N1.01 trillion from N728.9 billion reported in Q1 2022.
According to the data by the NGX, the volume of fixed income traded moved to 972,206.00 in Q2 2022 from 688,564 reported in Q1 2022, while its market capitalisation jumped to N22.23 trillion from N21.42 trillion.
By Aduragbemi Omiyale
Business activities in Nigeria, especially in the private sector, witnessed the weakest rate of improvement in June, a report from Stanbic IBTC Bank has revealed.
This was attributed to the recent challenges around cash shortages as it affected new order growth, causing a renewed decline in output in the period under review.
In its Purchasing Managers’ Index (PMI) for the month, the lender said the Nigerian private sector recorded 50.9 points, lower than the 53.9 points achieved in May, signalling a 24th successive monthly improvement in business conditions in Nigeria’s private sector, though the weakest improvement for 17 months. Any reading below the 50.0-point mark means deterioration.
The report stated that central to the moderation last month was a renewed contraction in output which fell for the first time in 19 months. Although marginal overall, the latest fall contrasted with sharp expansions in recent months. Firms overwhelmingly blamed weaker inflows of new work, but there were also mentions of cash shortages.
Meanwhile, new orders rose for the twenty-fourth month in a row. The rate of growth was marginal and eased to the softest in this sequence, however, as elevated costs deterred some clients from placing orders.
Turning to prices, overall input price inflation quickened from May and was the fourth- steepest in the series’ history. Firms reported higher purchase costs (particularly for fuel and raw materials) and rising staff costs.
Subsequently, and in line with weaker inflows of new work, purchasing activity rose at the weakest pace since January 2021. Stocks of purchases continued to rise sharply, however, and at a rate that was in line with the long-run series average.
Staffing levels rose for the seventeenth month in succession during June amid efforts to boost output. That said, the rate of growth was modest with some firms engaging in restructuring efforts.
Modest expansions in new business, paired with another uptick in headcounts led to a twenty-fifth successive reduction in backlogs. Shortages of some key parts resulted in the weakest decline in backlogs for 17 months, however.
Finally, sentiment regarding output in the year ahead remained firmly in positive territory in June. Although, there were some signs that soaring inflation weighed slightly on hopes with the degree of optimism moderating from May.
Copyright © 2022 BusinessPost


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