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Tag: oil production

  • Nigeria Needs Affordable, Reliable, Accessible Energy To Prosper – Seplat

    Nigeria Needs Affordable, Reliable, Accessible Energy To Prosper – Seplat

    Seplat Energy PLC, leading Nigerian independent energy Company listed on both the Nigerian Exchange and the London Stock Exchange, says in the quest to build a prosperous Nigeria, the country must target an affordable, reliable and accessible energy regime for all.

    The Chief Operating Officer, Seplat Energy, Samson Ezugworie, said this whilst giving a keynote at the Opening Ceremony of the 43rd Nigerian Association of Petroleum Explorationists (NAPE) Annual International Conference & Exhibition held in Lagos.

    The Seplat Energy COO, who spoke on the conference theme: ‘Revitalizing the Nigerian Petroleum Exploration and Production: Strategies for Energy Security and Sustainable Development’, stated that: “The imperative before us is clear. We must build a prosperous Nigeria, and we can only do that with affordable and reliable energy that is accessible to all,” according to a statement from the company by the Manager Corporate Communications, Stanley Opara.

    Today, more than 70 million Nigerians still lack access to electricity. More than 170 million rely on biomass for cooking and that’s terrible for the environment and for our households. And with Nigeria’s population projected to reach 237 million by 2025 and 400 million by 2050, the urgency to act is undeniable, because today’s problems will become far worse if we don’t take actions now to solve them. We will have 160 million more people to feed and house, and we need to create 100 million new jobs. But imagine what Nigeria can achieve if we do?

    According to Ezugworie, to meet these challenges, Nigeria must increase oil production — not just to boost national revenues and reduce current shortfall so our government can meet its budgetary needs, but also to drive GDP growth that reinforces the country’s position as the economic powerhouse of the African continent.

    He said: “We must also harness our huge reserves of gas and scale up gas and NGL production to expand domestic energy access, displace polluting imported generators, provide clean cooking for our people, and power our basic industries to support our national growth.

    “The global energy landscape is shifting, and so too is our own. We are witnessing a transition in the ownership and operation of Nigeria’s vast natural resources as assets pass from well-funded, well-resourced international giants to local Nigerian operators, who are blessed with enthusiasm and expertise but less globally oriented.  It’s a shift that creates new capital dynamics in our need to raise international finance, while simultaneously increasing our focus on managing risks and protecting our natural environment. 

    “But with these challenges come opportunities: opportunities to harness and enhance local knowledge, build resilient partnerships with our industry partners, and with our host communities, and most of all, build an industry that is owned and managed by Nigerians, for Nigerians.”

    At Seplat Energy, we believe the future of Nigerian production lies in three core principles our industry must adopt: Leadership, Partnership, and Stewardship, Ezugworie stressed, adding that the principles have played out since Seplat Energy took control of its Offshore assets, following its recent acquisition. 

    “We’ve worked on rehabilitating 33 wells and had success with 26, which are now producing about 33,000 barrels between them. That’s a step in the right direction toward closing the current production gap, which could leave Nigeria with a shortfall in its revenues. We will continue to rehabilitate wells, which isn’t costing us much, and we’re optimistic that we can get more production to help our industry reach the production targets the government has set,” the Seplat COO informed.   

    On the company’s gas business, he said Seplat Energy was close to delivering first gas from its joint venture ANOH Gas Processing Plant, and “we’ve also recently delivered our first cargoes of LPG from the newly upgraded Sapele Gas Plant, and I’m pleased to report that we’re well on track to ending routine flaring in our onshore operations, enabling us to reduce emissions, capture gas and monetise it, which is a win-win for Seplat, for the environment and for our communities.

    “Our progress on gas initiatives like ANOH, Sapele, and LPG shipments is a testament to our commitment to Nigeria’s prosperity. These projects are not just about energy; they are about transforming lives and powering Nigeria’s development.”

  • Feature- The Importance of ‘Mining’ Facts and Data in Nigeria’s Oil and Gas Arena

    Feature- The Importance of ‘Mining’ Facts and Data in Nigeria’s Oil and Gas Arena

    By Gary Chomse

    As with all modern industries, the oil and gas sector globally is under pressure to embrace the critical convergence of information technology (IT) and operational technology (OT) systems to maximise efficiencies and productivities. This shift is equally important in Nigeria, where the oil and gas industry plays a pivotal role in the national economy.

    Oil production is a major source of income and a substantial contributor to the GDP of many African countries, and Nigeria remains consistently in the top spot as Africa’s largest producer of crude oil. In addition, it possesses significant quantities of natural gas reserves. The country’s oil and gas sector is critical to the economy, contributing over 85% of export earnings and approximately 30% of budget revenue, but it has been performing below its potential in recent years due to a number of challenges.

    Against this background, the newly operational Dangote Refinery and Petrochemicals in the Lekki Free Zone outside Lagos, which began production in January 2024, is a positive symbol of the hoped-for revival of the oil and gas arena in Nigeria. This newest addition to Nigeria’s oil and gas industry is Africa’s biggest oil refinery and also the largest single-train facility in the world (meaning a facility where all the major processing units for the crude oil entering the refinery are contained within a single integrated complex).

    However, despite this beacon’s positive symbolism within the Nigerian oil and gas realm, the sector is still navigating the complex regulatory landscape and fiscal reforms introduced by the Petroleum Industry Act of 2021. The Act’s intention is to restructure fiscal terms, institutional frameworks, and regulatory policies, thus attracting investment and boosting efficiency. 

    Prior to the implementation of this Act, Nigeria’s oil and gas arena had seen years of under-investment in exploration and production which, together with persistent infrastructure issues and other challenges, had suppressed growth and innovation, as outlined by Nigerian credit rating agency, Agusto & Co.

    Implementing effective technology infrastructure in the oil and gas field can support strategic business and national objectives and help overcome legacy infrastructure challenges.

    Supporting key African markets in their digitalisation journeys

    Over the past few years, Vertiv has participated in several focused events across Africa to showcase our products and solutions that are suitable for the broader industrial realm. The intention was to create greater awareness around the benefits that Vertiv can bring to these local sectors, following on from our proven success within the oil and gas field in other parts of the globe. 

    We look forward to similarly engaging with industry representatives within Nigeria also, being Africa’s largest oil producer, as well as possessing substantial natural gas reserves. Nigeria’s natural gas reserves are, in fact, estimated to be one of the largest in Africa, as outlined by global research company, Mordor Intelligence, in its report entitled ‘Oil and Gas Industry in Nigeria Market Size & Share Analysis – Growth Trends & Forecasts (2025 – 2030)’.

    Natural gas is considered a cleaner and more environmentally friendly source of energy compared to other fossil fuels, and investments in natural gas infrastructure would allow Nigeria to diversify its energy mix and meet both domestic and international demand for cleaner energy sources.

    According to the Mordor Intelligence report, it appears that, considering the issues holistically and despite certain challenges, there is much to anticipate for the growth of Nigeria’s oil and gas industry over the next few years. One important key is enabling the true convergence of IT and OT systems, to be able to ‘mine’ facts and data as well as oil and gas, and thereby drive informed planning and decision making.

    The Importance of Integrating IT and OT Systems 

    In a challenging global economy, it is critical for oil and gas companies to digitalise their systems and processes, thereby allowing for the harnessing of data volumes from day-to-day operations. As outlined by global IT consulting company BirlaSoft, the IT-OT convergence within the oil and gas sector allows companies to harvest data within the OT layer and then ‘cross-contextualize it to build valuable insights and automated control and orchestration mechanisms’.

    According to BirlaSoft: ‘IO/OT convergence in the oil and gas industry is a key step to harnessing the business benefits of big data. Operational technology generates a vast amount of data when IoT sensors are attached to various parts of critical machinery to record intended parameters. This data is usually in the form of time series. Analysing it with the right artificial intelligence (AI) and machine learning (ML) techniques can help organisations anticipate potential risks or if the operations as a whole are generating a strange footprint. In other words, IT-OT convergence is the bridge to seamless, proactive, and resilient oil and gas operations.’

    By maximising a mix of more modern IT systems intertwined with legacy OT systems, and capturing important information, oil and gas companies can derive insight for enhancing operational efficiencies, increasing performance and improving decision-making. 

    To enable such strategic aims around the necessary digitalisation to link IT and OT systems, Vertiv’s digital infrastructure solutions are designed to assist with power supplies and distribution, as well as thermal management solutions, as follows:

    • Critical power products, such as efficient, reliable uninterruptible power supplies (UPS); scalable, flexible hybrid DC power products; power distribution systems; switchgear; and Vertiv’s battery energy storage system (BESS), which delivers scalable, high-capacity battery energy storage systems for data centres and critical infrastructure;
    • Thermal management solutions, including Vertiv™ air handling and chillers for climate control of large electronic systems located outside the data room; cooling solutions for data centres, IT rooms, laboratories, and other critical applications; as well as small thermal systems, incorporating room, and row/ rack cooling;
    • Vertiv™ Integrated Solutions, including prefabricated rack, row, aisle, and modular data centres, featuring built-in flexible designs based on proven configurations; and
    • Monitoring and management options, such as Vertiv™ Avocent® DSView™ solution, a family of IT management devices and software that provides solutions in edge, enterprise and engineering lab environments. 

    There is a well-known saying which notes that ‘knowledge is power’, and in any industry, information is vital for understanding that sector’s own outlook through the harnessing of facts, statistics and trends. With the oil and gas industry in Nigeria poised for robust growth that strategic investments and technological advancements will drive, the importance of being able to access information digitally is critical. 

    The strategically-placed implementation of robust yet high-performance data centres will work to form the backbone for this critical data and support the necessary IT-OT convergence of individual oil and gas companies, while at the same time also supporting the overall aims of the Petroleum Industry Act of 2021 at a national level. 

    Gary Chomse is the Regional Director, Central-Southern Africa at Vertiv

  • Comercio Partners Weekly Markets Round-up

    Comercio Partners Weekly Markets Round-up

    The IMF warns Nigeria that maintaining fuel and electricity subsidies could cost the country N2.33 trillion or three percent of its GDP in 2024, according to the Staff Article IV Consultations report. The IMF advises implementing social safety nets like the cash-transfer program before addressing these subsidies. Despite economic growth of 2.8 percent in 2023, challenges including high inflation and weak currency may hinder Nigeria’s projected GDP growth of 3.2 percent in 2024. Addressing food insecurity is a top priority, with measures like releasing grains and introducing dry-season farming being welcomed. Improved revenue collection and oil production are positive, but Nigeria’s low revenue mobilization remains a constraint on its ability to respond to shocks and promote development.

    Money Market

    System liquidity remained in the negative to conclude the week, settling at ₦2.22 trillion short. This was largely due to increased activities at the SLF window and the NTB auction settlement. WoW, the Open Buy Back (OBB) rate and the Overnight (OVN) rate rose 266bps and 281bps to print at 29.82% and 31.00%, consecutively.

    We expect a mild moderation in interbank rates due to the 2024 maturity inflow and coupon payments.

    Treasury Bills

    The Treasury Bills market traded on a calm note this week with minimal demand skewed to the 20-Feb-25 bill bid at 20.25% and the newly issued 6-Mar-25 bill which we saw bid at 20.65% and offered at 20.45%. At the auction, the DMO offered ₦337.89 billion. However, a total of ₦1.32 trillion was sold against a subscription of ₦1.66 trillion. Stop rates on the 91-day, 182-day and 364-day bill rose by 24bps, 50bps and 249bps to close at 17.24%, 18.00% and 21.49%. In addition, we saw some demand for the 182-day bill but limited offers. Week-on-week, the average benchmark yield gained 113bps to 18.98%.

    We expect a calm session as the system illiquidity persists.

    FGN Bond Market

    The FGN local bond Market traded on a subdued note this week. However, we witnessed improved offers on the 2033 and FEB 2034 bonds at 17.50% and 19.05%. We also saw demand on the 2053 bond, bid at 18.30% while offers remained scarce. We also witnessed offers on the short end of the curve but little-to-no bids to match. Week-on-week, the average benchmark yield gained 113bps to 18.98%. Week-on-week, the average benchmark yield rose 111bps to 18.39%.

    We expect the calm trend to persist.

    Eurobond Market

    The FGN Eurobond market was characterized by mixed sentiments. We saw a bullish momentum as risk off sentiments persisted. We had several data come out this week such as the ISM services PMI which printed at 52.6 against the expectation of 53. Jerome Powell stated during his testimony this week that though inflation has eased without any significant spikes in unemployment, it remains above the 2% target. Also, we saw the initial jobless claims stay unchanged at 217K versus the consensus of 215K. The Nonfarm Payroll data showed that 275K jobs were added against the 200k estimate while unemployment rate rose 3.9% vs 3.70% consensus. Furthermore, average hourly earnings rose 0.1% MoM vs est. 0.2%. Ultimately, the bulls dominated as the average benchmark yield dipped 14bps week-on-week, settling at 9.62%.

    We expect the bullish trend to persist.

    Currency Market

    The value of the Naira to the dollar depreciated by 511bps to print at ₦1627.40/$ this week at the Nigerian Autonomous Foreign Exchange Market Window.

    Equities Market
    The local stock market concluded the week on a positive note, as the ASI surged by 99 basis points day-on-day and 261 basis points week-on-week, closing at 101,330.85 points. Key drivers of today’s session included MTN Nigeria Communications PLC (+9.99%) and banking stocks, offsetting the decline in Transnational Corporation of Nigeria (-0.58%). Moreover, the year-to-date return saw a 35.52% improvement, while market capitalization settled at ₦57.30 trillion compared to ₦56.74 trillion the previous day. However, market breadth remained weak at 0.34x, with 56 decliners outnumbering 19 gainers.

    Trade metrics analysis revealed a disparity between volume and value. Volume traded decreased by 2.58% week-on-week to 358.12 million units, while value surged by 193.09% to ₦19.88 billion. In today’s session, TRANSCORP led in volume with 92.87 million units, followed by TRANSPOWER with 30.51 million units and UBA with 26.19 million units. Regarding the top-valued equities of the day, TRANSPOWER took precedence, with TRANSCORP and MTNN following suit.

  • Olu Verheijen, Gabriel Aduda, others to showcase President Tinubu’s Agenda for Nigeria’s Energy Sector at Africa Oil Week (AOW) 2023

    Olu Verheijen, Gabriel Aduda, others to showcase President Tinubu’s Agenda for Nigeria’s Energy Sector at Africa Oil Week (AOW) 2023

    Olu Verheijen, Special Advisor on Energy to His Excellency President Bola A. Tinubu, and Gabriel Aduda, Permanent Secretary of the Federal Ministry of Petroleum Resources, will be leading a Nigerian delegation to showcase investment opportunities within Africa’s largest oil & gas producing market at the upcoming AOW 2023.

    Nigeria’s energy sector is in the middle of a complete overhaul after the passing of landmark reforms such as the Petroleum Industry Act in 2021, the signing of the Electricity Act in 2023, and the removal of gasoline subsidies by President Bola Ahmed Tinubu.

    Such initiatives have been well received by the private sector and significantly increased investment appetite across the upstream, midstream, and downstream sectors. As investors look to Nigeria, AOW is delighted to provide a platform for dealmaking and investments across the country’s oil, gas, and energy infrastructure.

    The coming of Nigerian officials to AOW echoes the pro-business agenda of President Bola A. Tinubu and the openness of the new administration to provide an enabling environment for investors and stakeholders.

    Following several consultations with local and international operators, the Special Advisor to President Tinubu on Energy and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently announced that $55.2 billion of investments were projected from operators in Nigeria by 2030. $13.5 billion is expected to be invested within the next 12 months alone.

    At AOW 2023, the Nigerian delegation will communicate the country’s agenda to grow oil production to 2.1 million barrels per day by December 2024, expand midstream and downstream infrastructure, and build energy systems that are resilient and affordable.

    Nigeria remains Africa’s biggest economy and energy market, with tremendous investment potential in oil production and refining, cand power infrastructure.

    To support dealmaking across these segments, officials from Nigeria’s new government will be joined by a growing list of Nigerian companies and delegates, including NNPC, Seplat Energy, Oando Plc, Aradel Holding Plc, ND Western, Green Energy International, LEKOIL, Olaniwun Ajayi, and representatives of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

  • Inflation increased to 25.80% YoY in August 2023

    Inflation increased to 25.80% YoY in August 2023

    Nigeria’s inflation rate persists with its elevated trend for the 2nd month in H2, 2023. August’s numbers depict further strains in food production and distribution, with energy costs steadily dealing its hand in pushing headline inflation higher. While previously anticipating a slight relief with the ongoing Cassava and Green (maize and yam) Harvests in Southern Nigeria, heavy rainfall and floodings play the devil’s advocate against adequate harvest. Moreso, with the North in its cyclical lean season, food supply levels continue to be burdened. Along the same lines, prices of imported food items continue to skyrocket with Naira reaching N740 and N950 in the official window (NFEM) and the parallel market, respectively.

    Furthermore, while farmers face the brunt of harvesting food items, transportation of the said food items to markets pose another challenge. We see sustained ripple effects of the fuel subsidy removal continue to percolate into costs of goods and services alike. This attributes to heightened Core inflation figures.

    While we persevere through the waiting period of improved oil production, products exports, security and bolstered FX investments, we envision Nigeria’s inflation outlook to remain upended in the ensuing months.