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FG loses 13.21m-barrels oil worth N603.64bn in 2022

Petroleum, Oil, government. prices
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The Nigeria Upstream and Downstream Petroleum Regulatory Commission’s monthly reports show that Nigeria lost a huge amount of revenue as a result of massive oil theft between January and August this year, OKECHUKWU NNODIM and STEPHEN ANGBULU report

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Nigeria lost about 13.21 million barrels of crude oil with an estimated worth of N603.64bn between January and August this year, an analysis of the monthly reports of the country’s crude oil and condensate production showed.

Figures contained in the reports, obtained from the Nigeria Upstream and Downstream Petroleum Regulatory Commission in Abuja on Sunday, indicated that the country’s oil production only increased in two months, but crashed in others.

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Total crude oil production (without condensates) in January, for instance, was 43.35 million barrels, but this dropped to 35.22 million barrels in February, indicating a loss of 8.13 million barrels.

It moved up in March, increasing by 3.14 million barrels to close at 38.36 million barrels in the third month of 2022.

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This, however, was not sustained, as production dropped to 36.58 million barrels in April and the country lost 1.78 million barrels in that month.

The losses continued in May after oil production crashed to 31.76 million barrels, representing a loss of 4.82 million barrels when compared to what was produced the preceding month.

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It increased in June to 34.75 million barrels, representing an oil production gain of 2.99 million barrels, but that was short-lived, as output fell again in July to 33.6 million barrels, meaning the country lost 1.15 million barrels in July.

The oil production losses persisted in August, crashing further to 30.14 million barrels, representing a loss of 3.46 million barrels.

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It was observed that the total losses stood at 19.34 million barrels, while what was gained was 6.13 million barrels, leaving a cumulative loss of 13.21 million barrels during the review period.

For the prices of oil during same eight-month period, data from countryeconomy.com, an international analytical firm, showed that the average monthly costs of Brent, the global benchmark for crude, was $86.51/barrel in January, $97.13/barrel in February and $117.25/barrel in March 2022.

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In April, May, June, July and August 2022, the average costs of a barrel of crude were $104.58, $113.34, $122.71, $111.93 and $100.45 respectively. This implies that the average cost of the commodity in the eight-month period is $106.74/barrel.

By losing 13.21 million barrels and multiplying it with $106.74/barrel, it implies that Nigeria lost about $1.41bn or N603.64bn (as at Sunday’s official exchange rate of N428.1/$), during the eight-month period.

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The crash in Nigeria’s oil production has been attributed to the massive oil theft in the Niger Delta, which has been greeted by widespread condemnations and protests by oil workers.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, told our correspondent that though there might be some inconsistencies in oil theft data, the volume of crude stolen from the country was huge.

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He said, “On the quantity of oil being stolen from Nigeria, the various figures you see are all estimated figures. There is no accurate gauge to measure the volumes of crude oil being stolen in this country because we don’t have a standard measuring system.

“But because of the recent incident of a vessel that was intercepted for allegedly trying to steal crude oil from Nigeria, we think that a measurable quantity of our crude oil is not accounted for.”

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He added, “I also know that Nigeria is losing a lot of revenue from this oil theft and stakeholders are not happy with the way the cartel who are involved are handling the matter.

“It is therefore pertinent that the Federal Government should come out with a standard measuring instrument that will give the exact number of daily production, export consumption and the amount being reserved, as well as what we channel for local use.”

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Last week, the Petroleum and Natural Gas Senior Staff Association of Nigeria staged protests in Abuja, Lagos, Kaduna, Warri, among other locations, to kick against the continued theft of crude oil in Nigeria.

Also, the Executive Secretary, Nigeria Extractive Industries Transparency Initiatives, Orji Ogbonnaya-Orji, said in an interview that the 2021 audit report of the oil sector would be ready this year to ascertain the level of oil theft across the country.

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“We want to establish the quantity of crude that is produced, how much of that can be accounted for and how much was stolen. We should establish the amount that was exported, reserved for local consumption and how this was reserved or managed,” he stated.

NNPCL deploys digital system to curb vandalism
Meanwhile, the Nigerian National Petroleum Company Limited has said it losses 470,000 bpd to crude oil theft, especially those perpetrated in the oil-rich the Niger Delta region.

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The loss, it said, had hindered it from reaching its production quotas set by the Organisation of Petroleum Exporting Countries. This accrues to $700m lost monthly between March and September 2022.

However, the company said it had assembled an array of digital control systems to curb the losses.

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The Group General Manager, National Petroleum Investment Management Services, Bala Wunti, disclosed this to journalists in Abuja.

According to Wunti, the pipelines, particularly those around the Bonny terminal, cannot be operated due to the activities of criminals.

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He said, “If you’re producing 30,000 barrels a day, every month, you get 1,940 barrels. So, what it means is that you can take it to 270 every four days, calculate it in a month; you will have seven cargos in a million barrels, that’s seven million barrels.”

“When you multiply seven million barrels by $100 that is $700m lost per month, about 150,000 barrels expected are differed, we are not producing due to security challenges.

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“The Shell Petroleum Development Company trunk line, TNP transnational pipeline cannot be operated and this has been like this since March 3rd that we put in this. Just take your calculator, 150,000, it means if you want to arrive at one million barrels per day, it means every week as a minimum, basically for one week alone, it’s four cargoes; and four cargoes is four million barrels.

The GGM said the impact of pipeline vandalism has caused low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, and increasing instability in the oil and gas market.

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“Nigeria will suffer for it; the revenues are impacted, so we can only appeal to them to rein in themselves, the oil theft situation is regrettable. It’s not going on across the whole of the Niger Delta, there are trunk lines that are more impacted, I think the Bonny trunk line ranks highest.

“Our major challenge as a country is our capability to respond and that is as a result of several factors, the terrain as well as some incapacity that we have.”

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On the company’s efforts to contain the menace, Wunti said the NNPCL was deploying technology in monitoring the illegal activities around its facilities in the creeks.

“I was in the Saudi Arabia infrastructure twice, and I know what they have. It’s a digital control system; it’s different from our own. The digital control system, it’s like you have the control system of all your assets in one place.”
PUNCH

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Nigeria Considers China’s C919 Plane For New Airline

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Nigeria would consider buying China’s newly-certified C919 passenger jet as it grows the country’s fledgling carrier, Nigeria Air to 30 planes by around 2025, Aviation Minister Hadi Sirika said on Saturday.

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Sirika said the new airline would have a mixture of Airbus (AIR.PA) and Boeing (BA.N) planes, but added the carrier is also willing to look at the Chinese narrowbody jet, which Chinese regulators certified on Friday.

“We haven’t looked at that C919. But if it’s as good as the others then why not,” he said on the sidelines of the United Nation’s aviation agency’s triennial assembly in Montreal, Canada.

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On Friday, China hailed the development of its first medium-haul passenger jet as the embodiment of the country’s drive towards self-sufficiency, with safety approval awarded to a plane that aims to challenge Western aircraft giants for orders.

The first C919 aircraft, designed to compete with popular single-aisle models made by Airbus and Boeing, will be delivered by the end of the year, state Xinhua News Agency said.

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It remains unclear when the plane might be certified by the United States or Europe, opening the way to sales in most foreign markets, but industry analysts say it will be up to a decade before China can seriously tackle the existing Boeing-Airbus duopoly.

“China and Nigeria (have a) very cordial and friendly relationship with mutual benefits,” Sirika said.

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For decades, China has loaned billions of dollars to Africa to build railroads, power plants and highways as it deepened ties with the continent while extracting minerals and oil.

Nigeria, Africa’s most populous nation, is the top importer of Chinese goods, hoovering up $23 billion worth in 2021.

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Nigeria’s poor transport and power networks have stymied economic growth for decades, holding back the distribution of wealth in Africa’s biggest economy where 40% of people live below the national poverty line.

However, the country is growing its aviation sector, where traffic is now above pre-COVID-19 pandemic levels, Sirika said. The airline is one of President Muhammadu Buhari’s 2015 election campaign promises. (REUTERS)

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Naira Collapses To N730/$ At Parallel Market

Naira, CBN
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The Nigerian naira has collapsed to a new record low, trading at a minimum of N730/$1 on Thursday morning at the open market, a 0.69 percent drop from the previous day.

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This is according to information from the black market operators interviewed on Thursday.

According to the traders, the fall can be attributed to the continuous scarcity of forex and increased demand in the market.

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The fall in the exchange rate is following the move by the apex bank to raise the interest rate to a 20-year high of 15.5%, representing 150 basis points increase from the 14% stated at the previous MPC meeting.

The rate at N730/$1 is the highest on record, while traders told Nairametrics Research that they sell dollars for as high as N735/$1 and buy between N725/$1 and N730/$1.

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Today marks exactly 14 months since the CBN discontinued the sale of forex to Bureau De Change operators, and the naira has been on a free fall since then, with liquidity tightening in the market.

A cursory look at the data tracked by Nairalytics, the exchange rate was trading at N518/$1 before the ban and has depreciated by a margin of N212/$1 in a little over a year.

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Similarly, at the peer-to-peer cryptocurrency exchange, the exchange rate fell to N735/$1 against the US dollar on Thursday morning from N733.4/$1 recorded in the previous session.

The exchange rate at the official Investors and Exporters window closed at N436.37/$1 on Wednesday, 28th September 2022, a slight depreciation of 0.01% as against N436.33/$1 recorded on Tuesday, 27th September 2022.

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A total of $119.49 million in FX value was traded at the official market on Wednesday, which is 20.17% higher than the $99.43 million that exchanged hands on Tuesday.

So far during the week, a total of $297.02 million has been traded at the official market, edging towards the $524.35 million that was traded in the previous week.

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The Central Bank has been able to maintain the stability of the currency in the official market by constant intervention, which has helped the country’s foreign reserves.

According to the data from the CBN, Nigeria’s foreign reserve has already lost over $2 billion year-to-date to stand at $38.36 billion, from over $40 billion recorded as of the end of last year.

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World Bank Launches Pandemic Trust Fund, Confirms Extreme Challenges In Developing Countries

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The World Bank Group has launched a new trust fund for Pandemic Prevention, Preparedness, and Response (PPR).

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The President, David Malpass said the United States-backed support will assess and strengthen health preparedness throughout the developing world.

The economic expert delivered a speech on Thursday at the Stanford Institute for Economic Policy Research (SIEPR) ahead of the 2022 WBG-IMF Annual Meetings.

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Noting that a tough reality confronts the global economy, Malpass said a series of harsh events and unprecedented macroeconomic policies are throwing development into crisis.

The chief assured of World Bank’s commitment to alleviate poverty and boost shared prosperity, announcing that support for developing countries, especially for climate-related finance, reached $31.7billion in 2022.

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He hinted that the Group’s upcoming Poverty and Shared Prosperity report suggests that the deterioration in development progress began well ahead of the COVID-19 pandemic.

Malpass noted that developing countries were facing an extremely challenging near-term outlook due to the shocks in recent years.

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The factors include higher food, fertilizer and energy prices, rising interest rates and credit spreads, currency depreciation, and capital outflows.

Malpass said global energy production may take years to diversify away from Russia, prolonging the stagflation highlighted in the World Bank’s Global Economic Prospects.

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“Many developing countries are also struggling in governance and rule of law; debt sustainability; climate adaptation and mitigation; and limited fiscal budgets to counteract the severe reversals in development from the COVID-19 pandemic.

“The pandemic – which alone led to over six million deaths – geopolitical conflicts, and extreme weather events have hurt countries and people worldwide, with the poor bearing the brunt, especially women and girls.”

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“Developing countries are being hit by more severe climate-related disasters. Man-made greenhouse gas emissions are causing climate change, which in turn is having tragic impacts on development.”

“Adaptation by countries and people harmed by climate change and mitigation of greenhouse gas emissions are urgently needed,” the President added.

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Stressing that the urgency is clear in daily news reports of inflation, climate change, famine, civil protests, and violence, Malpass said the World Bank is fully engaged in the challenges and eager to work on solutions.

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