NIGERIA: THE CRUDE OIL ECONOMY
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...
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...
When the Stakeholder Democracy Network (SDN) an international non-governmental organisation broke the news, it re-exposed a racket that has been going on for years. Nigeria has been for a while the choice destination for dumping the worst, most carcinogenic, toxic refined petroleum products on the planet. Indeed such is the preponderance of o...
SYLVA MAKES THE CASE FOR DEREGULATION A virtue signalling Minister of State for Petroleum Resources Chief Timipre Sylva in a statement recently released in Abuja was at pains to point out the economic benefits of deregulation of the downstream oil sector . The main thrust of his statement re-iterates arguments some of us having been mak...
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 ...
Saudi Arabia made what has been described as a surprise announcement, it will voluntarily deepen its crude oil output cuts. The announcement stated that this voluntary output cut would take effect from June.
The cut is an additional 1 million barrels per day which will reduce Saudi production to the lowest level in 18 years. The ostensible reason given by the Saudis is to hasten a recovery from the crash in oil price benchmarks which has pitched them into austerity. According to Energy Minister Abdulaziz bin Salman Al Saud, Saudi Arabia wanted to be ahead of the curve.
The IMF have approved US$3.4 billion in emergency financial assistance to the Nigerian Government under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp decline in oil prices. The funding is a loan which attracts low interest and needs to be paid back within 5 years.
Nigerians have been told they are resilient, as if they have a choice. A flattery conceived to beguile the masses living in abject poverty. Often repeated by a well fed political class that have garnered enough wealth to insulate themselves from the harsh vagaries of the Nigerian existence.
Bonny Light the most recognisable and one of the most sought after Nigerian crude grades last week traded at $12 per barrel. The low sweet flagship Nigerian crude had up until last month historically traded at a premium to dated Brent. Bonny Light has become emblematic of the fate of light sweet crude grades that yield high cuts of transport fuels in a world in lockdowns.