NIGERIA: THE CRUDE OIL ECONOMY

Synterra the Nigeria Risk Management Consultants provide insight into how the oil markets affect the Nigerian economy. Nigeria's reliance on crude oil receipts is total. At a time of increasing volatility and uncertainty this blog seeks to provide an analysis of the effect the global energy markets have on business in Nigeria, their relationship with OPEC and how local policy decision making affects investment opportunities.
Nigerian-barrels Nigeria produces Condensates

OPEC BULLY NIGERIA INTO SUBMISSION

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...

Russia-vs-Saudi SAUDI AND RUSSIAN PLOT OIL MARKET

OPEC+ ALLIANCE PLOT TO FIND A WAY TO PLEASE THE OIL MARKET

The out and out oil price war has now entered its next phase and has become the chess game that is the new contest for market share. The trigger for this shift was always going to be China's resurgent crude oil imports and the seeming revival of a region that appears to have put the worst of the COVID-19 pandemic demand destruction behind it&n...

BONNY LIGHT SLUMPS TO $12 DESPITE OIL MINISTERS PREDICTION

BONNY LIGHT SLUMPS TO $12 DESPITE OIL MINISTERS PREDICTION

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.

THE HISTORIC OPEC DEAL TO CUT  9.7MBD  THAT DOES NIGERIA NO GOOD

THE HISTORIC OPEC DEAL TO CUT 9.7MBD THAT DOES NIGERIA NO GOOD

Nigeria have agreed to a production cut of 400,000 barrels a day as their contribution to the OPEC+ agreement. This is based on a 23% cut on a production baseline taken from October 2018. Nigeria also produce between 350-400,000 bpd of condensates which are exempt from OPEC cuts. Condensate is a...

TIME FOR NIGERIA FIRST POLICY WITH OPEC

TIME FOR NIGERIA FIRST POLICY WITH OPEC

The much anticipated OPEC++ meeting takes place tomorrow, It is time for Nigeria to be bold and clear eyed in pursuing Nigeria’s best interests. However it remains unclear as to  what  position Nigeria have decided to adopt. We have heard a number of statements from the Minister of State for Petroleum Resources, Chief Timipre Silva, yet they seem vague and difficult to interpret. The policy is unclear, not so much as inarticulate but unarticulated. To start with Nigeria’s petroleum ministry has stated.

RUSSIA WAGE WAR ON US TO END SHALE'S FREE RIDE

RUSSIA WAGE WAR ON US TO END SHALE'S FREE RIDE

RUSSIA AND SAUDIS DECLARE WAR ON THE US.   Many of us have been  brought up in the empirical tradition that avers "if it looks like one, walks like one and quacks like one, it is a duck". If I didn't know better,  I would say that the so called Russia-Saudi...

OPEC CRASHES NIGERIA'S ECONOMY ; TIME TO LEAVE

OPEC CRASHES NIGERIA'S ECONOMY ; TIME TO LEAVE

When it came it was as abrupt as it was devastating, a collapse in crude oil price futures significant enough to be defined as a material adverse change. In other words a calamity, at a time Nigeria is least able to absorb it.  Indeed the Group Managing Director (GMD) of Nigerian...

SAUDIS MIGHT REGRET  STARTING RECKLESS OIL PRICE WAR

SAUDIS MIGHT REGRET STARTING RECKLESS OIL PRICE WAR

When asked about the proposed OPEC production cuts last week, UAE energy minister Suhail al-Mazrouei told reporters in a show of what now turns out to be misplaced confidence,   "I can not see us not agreeing, because that's very important for the market." He however went on to state that in...

PUTIN TAKES CONTROL OF OPEC

PUTIN TAKES CONTROL OF OPEC

Russia seem to have won the argument and OPEC+ will meet as scheduled in Vienna on March 5th- 6th. It could be that a resurgence  in the  Brent oil price benchmark which has seen it reach  $59.16/b as of 1719 GMT today, up 11% from the February 10th  low has alleviated...

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