Oil production in Nigeria is forecast to falter due to underinvestment according to analysis from research and consulting firm GlobalData.
Despite more than 37 billion barrels remaining in proven reserves the country faces challenges with need for reform and transparency to reverse this trend.
However Young Okunna, an upstream analyst covering Sub-Saharan Africa, said Nigeria’s gas sector could be rejuvenated by capitalising on the chance to rebuild investor confidence following the election of President Muhammadu Buhari.
Afren has suspended its shares amidst continued uncertainty over its financial position.
The company said its shares were suspended by the Financial Conduct Authority at its request.
It comes after an ongoing business review showed near-term production was set to be “materially lower” than previous estimates given alongside its proposed restructuring in March.
The boss of MX Oil said the company had secured a share in a “world-class” asset after investing in the OML 113 licence offshore Nigeria.
Stefan Olivier said he did not see any challenges from acquiring a 5% share in the near-term producing licence, which includes the Aje Field.
The asset has already undergone flow tests with production expected from January 2016.
It’s been five months since Johnson Umeadi and his wife, Adaku, received their salaries as government workers in southeastern Nigeria.
With Nigeria’s finances shot by last year’s collapse in oil prices, they’re struggling with rent and can’t afford school fees for their three children. Shops and grocers are no longer willing to extend them the credit they need to buy basic items such as food and drinks.
“It’s like we put all our eggs in one basket and then it went porous,” said Johnson, a 45-year-old employed by a department of Imo state responsible for infrastructure projects in Owerri. “If one of us was working in a private company, or even engaged in petty trading, we would’ve fared better,” he said, declining to disclose his salary.
The plight of the Umeadis and others who haven’t received wages has hit everything from local shops to the banking industry in Africa’s biggest economy, in which about a third of the formal workforce of 11 million is employed by the state, according to Renaissance Capital. The cash crunch is undermining the prospects for the new administration of President Muhammadu Buhari, who described the Treasury last month as “virtually empty.”
Oil Reliance
Banks are more wary of lending to individuals, Bisi Onasanya, head of First Bank of Nigeria Ltd., the largest local lender by assets, said last month at a Bloomberg conference in Lagos, the commercial capital.
“You have 18 states unable to pay salaries,” said Onasanya. “That reduces the number of people who are viable enough to repay your consumer loans.”
Civil servants are victims of Nigeria’s reliance on oil, which accounts for about two-thirds of the government’s revenue. A 46 percent crash in Brent crude prices in the past year has led to half of Nigeria’s 36 states, which rely on monthly federal handouts for the majority of their funding, being unable to pay wages.
The effects have been wide ranging and are hurting business as teachers, doctors and bureaucrats scrimp on spending. Listed consumer companies saw their profit before tax fall 55 percent year-on-year in the first quarter, according to Esili Eigbe, head of West African research at Exotix Partners LLP. The worst is yet to come, he said.
Twelve people died and three were injured in an explosion during repair work at an Eni SpA crude oil pipeline in Nigeria.
The victims worked on a maintenance team for a local service company, Rome-based Eni said in a statement Friday. The Tebidaba-Clough Creek pipeline in the Niger delta was previously “damaged by acts of sabotage.” The company said it is still investigating the cause of Thursday’s blast.
Negotiations by SEPLAT Petroleum Development to acquire an asset in Nigeria which faced delays has finally restarted.
The company said it had reached an agreement to release funds from an account which had been set up with a consortium in a bid to make a potential acquisition.
It had been created to look for opportunities to buy assets from oil and gas companies operating in the region.
In the latest agreement, SEPLAT has said it will release $408million of the total $453million which is being held in the account.
A bomb blast in Nigeria’s northern university town of Zaria has killed 25 people including a two-year-old, the Kaduna state governor reported.
The incident is the latest in a string of deadly bombing and shooting attacks by the Boko Haram Islamic extremist group.
Muhammadu Buhari’s election triumph has sparked “optimism and renewed vigour” in the Nigerian exploration market, according to Sirius Petroleum.
The firm, which focuses on oil and gas development and production opportunities in the region, highlighted the regime change in its latest company results.
Nigeria's new President Muhammadu Buhari dissolved the board of the state-owned oil company on Friday as a first step in cleaning up the sector in Africa's biggest crude producer.
The Nigerian president has confirmed the country’s coffers have run dry.
Newly elected Muhammadu Buhari was speaking to reporters when he said one of his immediate challenges was a Treasury that’s “virtually empty” and debts totaling billions.
He takes over a nation in crisis, with an Islamic uprising that has made 1.5 million people homeless and coffers emptied by massive corruption.
Similar crises confronted him when he ruled briefly as a military dictator in the 1980s.
The 72-year-old says a similar prescription more judiciously imposed by a “born-again democrat” can heal the woes of Africa’s biggest nation, economy and oil producer.
Crippling fuel shortages, power cuts, slowing economic growth and Islamist militants wreaking havoc. Muhammadu Buhari is taking on a tough job when he’s sworn in as Nigeria’s president on Friday.
Former military ruler Buhari, 72, swept incumbent Goodluck Jonathan from office in March elections by pledging to end endemic corruption and Boko Haram’s rebellion in the north.
His stewardship of Africa’s biggest oil producer, this time as elected president, may depend on the price of crude, which supplies the government with more than two-thirds of its income.
Nigerian stocks retreated for a fifth day, with the declines seen continuing as Africa’s biggest oil producer faces a fuel shortage that’s crippling the economy and causing companies to cut back operations.
Shares in Guaranty Trust Bank Plc, Nigeria’s biggest lender by market value, dropped as it closed branches early on Monday amid a shortage of diesel for generators.
Dangote Flour Mills Plc’s stock fell to the lowest in almost two months as it was forced to rely on “highly erratic” electricity from the national grid to run its plants without fuel for generators, according to African Alliance Securities Ltd.
SacOil has decided to end its participation in a Nigerian asset as it looks to restructure its portfolio.
The company has terminated its joint venture with Nigdel United Oil in the OPL23 asset.
It now plans to focus on "lower risk and cash generative assets."
Economic growth in Nigeria, Africa’s biggest crude producer, slowed in the first quarter as the oil industry contracted amid a slump in prices, according to the country’s statistics bureau.
Expansion in gross domestic product eased on an annual basis to 4 percent compared with 5.9 percent a quarter earlier, the National Bureau of Statistics said in a statement.
Erin Energy has commenced production from its Oyo-8 well block located in OML 120 offshore Nigeria.
The company is the operator of the Oyo field and has a 100% working interest in the block.
The well is epected to produce 7,000 barrels of oil per day.
Nigeria has to raise its gas prices to attract an estimated $55 billion of investment needed to plug persistent local shortages, Nigerian Gas Association President Bolaji Osunsanya said.
A government increase of gas prices in August for power plants to $2.50 for 1,000 cubic feet from about $0.50 isn’t enough, Osunsanya, who is also managing director of Oando Gas & Power Ltd., said in an interview in Lagos with Bloomberg TV Africa to be aired Friday.
These investments are needed to explore for more gas, set up five processing facilities at about $2 billion each and develop domestic distribution channels, he said.
International oil companies, which had been export-focused due to low domestic gas prices fixed by the government, have agreed to sell off $10 billion of assets over the past three years, according to Bloomberg Intelligence.
Those assets are largely being taken over by local companies, such as Seplat Petroleum Development Co. and Midwestern Oil and Gas Co. Ltd.
Oil prices are likely to stay low for a long time after falling more than 40 percent in the past year, said officials from two OPEC nations.
Nigeria and Algeria both warned that oil prices, currently at around $60 a barrel, probably won’t recover to the 2011-2013 level of more than $100 a barrel.
“You forecast at your own risk, but it seems to me that we should be regarding this as a permanent shock,” Ngozi Okonjo-Iweala, the Nigerian finance minister, said on a panel discussion Sunday in Washington near the end of the International Monetary Fund’s spring meetings.
“We should prepare our economies for that eventuality.”
Bourbon Offshore said a judicial investigation has been launched into its business dealings in Africa.
The matter relates to tax and bribery charges by authorities in Marseilles, France.
It comes after the company's former manager was arrested at the Marseilles-Provence airport when he was returning from Africa in possession of approximately €190,000 in cash in 2010.
Nigeria is in talks with Russia’s Rosatom Corp. to build as many as four nuclear power plants costing about $80 billion as Africa’s biggest economy seeks to add 1,200 megawatts capacity by the end of the decade.
The West African nation signed an agreement with Rosatom to cooperate on the design, construction, operation and decommissioning of a facility, said Franklin Erepamo Osaisai, chairman and chief executive officer of the Nigeria Atomic Energy Commission.
It will be increased to four nuclear plants with total capacity of 4,800 megawatts by 2035, with each facility costing $20 billion, he said.
French company Bourbon said three of its crew members were kidnapped from a crew boat off the coast of Nigeria.
The incident happened on the Surfer 1440 after pirates boarded the vessel on April 8.
A spokesman for the company said:"The 3 crew members of Nigerian nationality have been kidnapped. An emergency unit based in Nigeria has been immediately activated.
Robert Dowden had presciently anticipated Nigeria’s presidential electionsas the most important African event of the decade.
Last week’s elections saw the tenacious opposition candidate former general Muhammadu Buhari triumph over incumbent President Goodluck Jonathan. This was Buhari’s fourth consecutive attempt for the presidency. He had a short spell as military head of state in 1984/85.
Nigerian elections are usually characterized by vote-rigging; inevitability of incumbents winning as they violence and state’s petro-resources to capture the electoral process; and losers resort to violence.
Last week’s elections broke the old traditions as observers judged them as exceptionally peaceful, free, fair and credible. Nigeria’s electoral commission introduced smartcards as innovative means of identifying voters - an innovation which singularly reduced the space for vote rigging.
