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SMEs reject Eko Disco’s services in favour of REA’s mini grid plant

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Operators of small and medium enterprises (SMEs) in Lagos’ large business complex – the Sura Business Complex, have reportedly ditched the operator of the electricity distribution network which supplies them electricity – Eko Disco – for an alternative expected from the Rural Electrification Agency (REA).

Local news outlet – Vanguard – reported at the weekend that the SMEs told Eko Disco they no longer want to patronize them, and would instead prefer to be served power from the new mini grid plant being built by the REA under its Energizing Economy Program (EPP).

According to the report, the SMEs came together on the platform of the Association of Shop Owners in Sura Business Complex, Lagos Island, to express their desire to opt out of the service of Eko Disco. They in protest of erratic electricity supply to the complex, said they were tired of poor electricity supply and crazy bills forced on them by the Disco.

Source: OGN

FG finalizes plans to sell Yola Disco, two power Gencos

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The federal government will re-sell the Yola Electricity Distribution Company (Disco), which was returned to it in 2015 by a core investor as a result of the Boko Haram insurgency, and two additional gas-fired power generation plants.

It was gathered from a document sighted at the Bureau of Public Enterprises (BPE) that the agency has received approval from the federal government through the National Council on Privatisation (NCP) to re-sell the Yola Disco through a competitive bidding process to be managed by the BPE.

Also up for sale are the 987.2 megawatts (MW)-capacity Afam power plant and the 240MW Afam Three Fast Power Limited (ATFPL), which the government initiated in 2016. From the BPE document, it was learnt that the agency has invited core investors to express interest in acquiring the government’s 60 per cent shareholding in Yola Disco, and 100 per cent shareholding in the Afam Genco.

BPE explained that its preference for bidders of the Disco would be the existing power distribution companies or core investor groups with power distribution companies as equity investors. For Afam Power Plc and ATFPL, the document suggested they would be jointly privatised through competitive bidding.

Source: THIS DAY

DisCos losing N48/unit due to delay in tariff hike – ANED

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The 11 electricity Distribution Companies (DisCos) said they lost an average of N48 per kilowatt hour (KWH) of electricity due to the stoppage of a new tariff in the past 30 months.

A statement by the Association of Nigerian Electricity Distributors (ANED), yesterday, said the shortfall from the stalled tariff review by the Nigerian Electricity Regulatory Commission (NERC) driven by the Minister of Power, Works and Housing, Mr Babatunde Fashola, had impeded performance of the DisCos in a capital intensive power sector.

“Through the regulatory and policy actions that have been principally driven by the minister, the DisCos have been forced to sell their product which should retail for an average retail tariff that is more than N80/kWh, at an average retail price of N32/kWh,” the DisCos said.

Source: Daily Trust

DisCos fault FG over disparity in amounts approved for electricity projects

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Electricity Distribution Companies (DisCos) under the aegis of Association of Nigerian Electricity Distributors (ANED) has condemned what it described as disparities in the amount approved by the federal government for electricity projects in Sokoto and Anambra states.

ANED specifically accused the minister of Power, Works and Housing, Mr. Babatunde Fashola of wasting the country’s resources by awarding outrageous contracts through the Rural Electrification Agency (REA).

The association in a statement issued yesterday said the minister, who had earlier challenged the proposed price of $1.5m/MW put forward by power developers from the private sector and sought a reduction of same, went ahead to approve a 3 megawatts (MW) project in Sokoto at $5.6 million per MW and $2.02m per MW for a 2MW project in Anambra.

Source: Leadership

We were entitled to only N58bn of CBN’s power sector fund – Discos

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FG Launches Solar Intervention Fund, with N500m Maximum Access Limit

The electricity distribution companies (Discos) have said the Central Bank of Nigeria (CBN) reserved just about N58.45 billion or 27.75 per cent of its N213 billion power sector intervention fund for the Discos, while the balance went to generation companies (Gencos) and gas suppliers.

The Discos also alleged that despite the federal government verifying and accepting to pay over N72 billion electricity debt accumulated by its Ministries, Departments and Agencies (MDAs), the same MDAs have continued to rack up debts for electricity supplied to them.

They spoke through the Executive Director, Research and Advocacy of their association – the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, in response to allegations against them by the Minister of Power, Works and Housing, Mr. Babatunde Fashola that the CBN made provisions for financial supports to them, but they blocked its successful implementation with court proceedings.

Source: THIS DAY

Power sector lost N268bn in six months – VP’s Office

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Nigeria Puts Up Geregu, Omotosho, Calabar Power Plants for N434bn

The losses incurred in Nigeria’s power sector have been on a persistent rise as the Federal Government and electricity distribution companies continue to disagree over issues affecting the industry.

Latest data obtained from the Advisory Power Team in the Office of the Vice President on Friday showed that between January 1 and July 19, 2018, the sector lost N268.4bn. This represents an increase of N67.1bn when compared to the N201.3bn lost by the sector from the first day of this year to June 5, 2018.

Outlining some of the causes for the persistent losses being recorded in the sector in their report on Friday, the Advisory Power Team said insufficient supply of gas, poor distribution and transmission networks, as well as water reserves constraint contributed to the losses. “The estimated amount lost to insufficient gas supply, distribution, transmission and water reserves to date in 2018 is N268,374,000,000,” the team said.

Source: The Punch

Discos’ criticise introduction of small power operators as tariff shortfall hits N1.3tr

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Distribution companies (Discos) have criticised Federal Government’s attempt to improve quality of power delivery and breaking their captive monopolies through the introduction of small power entrepreneurs.

Rather than supporting it, the profit-driven Discos describe the current rural electrification initiative, mainly targeted at improving the fortunes of small and medium enterprises (SMEs), as an infringement on their franchise and areas of operation. But the Government appears to be having none of that, saying there is no exclusivity or monopoly of franchise for as long as services remain poor.

Despite attempts to maximise profit through estimated billing, electricity distributors claim their tariff shortfall has now risen to N1.3trillion this July, from N1trillion with a monthly accumulation of N27billion. Hundreds have already abandoned grid distribution in favour of alternatives like solar, inverters, generators etc to contain their astronomical electricity bills from the Discos.

Source: The Guardian

Nigerian banks likely to collapse if Discos fail – ANED

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The electricity distribution companies (Discos) through the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Mr Sunday Oduntan, while at a press conference in Lagos described the liquidity crisis in the sector as a major issue, stressing the need for the government to put in place a cost-reflective tariff, as any failure by the Discos might likely lead to the collapse of the nation’s banking sector.

He said, “There is a need for collaboration among stakeholders in the sector to proffer solutions to the problems. So, we are willing any day; if we are called today for discussions, we will be there because we know that our businesses are at risk. This is very important for all of us to note: if the Discos collapse today, many Nigerian banks will collapse too.”

“In case you don’t know, when they were selling the entities, only one of the Discos had foreign direct investment. All the others borrowed money from local banks, and they paid for the assets in dollars. The point is that those who have put their money in the sector will be the first persons to wish that the system succeeds, because the failure of the system means their money is also going down the drain.”

Source: The Punch

Reps call for reinstatement of suspended IBEDC board

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The House of Representatives has asked the Nigerian Electricity Regulatory Commission (NERC) to reinstate the suspended board of Ibadan Electricity Distribution Company (IBEDC).

This was stated on Wednesday by the Chairman, House Committee on Power, Dan Asuquo, who said he was issuing a 48-hour ultimatum, during the investigative public hearing on the ‘Need to save Ibadan DISCO Plc.’

Mr Asuquo urged the regulatory agency to desist from any act that could send wrong signal to investors. He called on all parties involved to put public interest above their individual interest, cautioning against the utilisation of public fund to prosecute cases.

Source: Premium Times

BEDC frustrating power purchase deal for Edo state – Obaseki

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The Edo State Governor, Mr Godwin Obaseki, on Thursday accused the Benin Electricity Distribution Company (BEDC) of frustrating a power deal with Ossiomo Power and Infrastructure Company Limited, to supply electricity to government offices in the state capital.

Obaseki who disclosed this at the 4th National Council on Power event, holding in the state, decried the poor supply of electricity to the state, the company’s resolve not to supply pre-paid meters to electricity consumers and its culture of over-billing its clients.

According to the governor, BEDC in the last 12 months has been writing petitions against the deal sealed between Edo State Government and Ossiomo Power and Infrastructure Company Limited, for the purchase of five megawatts of electricity to light up government offices in Benin City, and stressed that the petitions have hindered the success of the purchase agreement.

He explained that no community in the state enjoys more than eight hours of electricity supply daily despite her status as the power hub of the country. He informed that BEDC has continued to deliver poor services to Edo people and maintained that evidence was abound of deliberate attempts on the part of BEDC not to sell or distribute meters to customers.

Source: Vanguard

Reps declare NDPHC board, management illegal

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The Chairman, House of Representatives Ad-hoc Committee investigating alleged constitutional breaches, impunity and other infractions of the Niger Delta Power Holding Company (NDPHC), Hon. Darlington Nwokocha (PDP, Abia), has described the past and present boards and management of the NDPHC as illegally constituted largely because their appointments were never ratified by its shareholders.

It was further discovered that the company never held any Annual General Meeting (AGM) since its inception. The probe is consequent upon a resolution of the House at plenary on need to investigate allegations of misappropriation of over $30 billion (about N10.8 trillion) by the management.

At the resumed hearing, the lawmakers were shocked to find that appointments to the board and management had been made by “fiat” as only the National Economic Council (NEC) nominated members without the approval of shareholders as prescribed in the Companies and Allied Matters Act (CAMA).

A member of the committee, Hon. Mark Gbillah (APC, Benue) said the legitimacy of all expenditures carried out since the inception of the company till date were questionable as a result of the faulty appointments, adding that the company had operated without checks and balances.

However, the company’s Managing Director, Mr. Chinedu Ugbo, alongside the General Manager, Legal Services, Mr. Mohammed Nanmud, argued that though no AGM had been held by the company, there were nominations received from shareholders, indicating who to represent them.

He also said the current board will consider the company’s audited accounts between August and December and schedule an AGM for the consideration of accounts and ratification of other appointments by shareholders.

Source: THIS DAY

Vurin Redefines Progress in Local Content Terms

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By Jerome Onoja

“Success is better depicted when solutions are innovatively created and subsequently curated around perennial challenges; thereby enabling collective capturing of value within an ecosystem, that ultimately results in forward momentum for the industry.” _ Ude

 

Victor Ude, the Group Chief Executive Officer of VURIN, a leading Nigerian oil and gas services company in this interview with Jerome Onoja, after a session he moderated at the just-concluded NOG conference in Abuja, speaks on the company’s overarching objectives of providing Oilfield procurement, Installation, Maintenance and repair services, anchored on consultative guidance, just as he advocated for the local content law, as well as the need for compliance and enforcement in the oil and gas industry.

 Excerpts:

Could you please give us highlights of the panel that you moderated earlier today?

Ans: The panel provided industry players the opportunity to get a front row seat as to the thinking of key enabling agencies, both NCDMB and NIMASA, as it relates to compliance and enforcement within the oil and gas industry value chain. The panel also focused on capacity deficit and how both agencies were bridging the gap either through special intervention funds and/or through training of seafarers, the judiciary and other means. The need to simplify administrative engagement by simplifying processes was also discussed at length. We also examined the concept of the carrot and stick approach to get a pulse check and determine which arguably works more effectively.

Earlier in the day, we listened to the Deputy Managing Director of TOTAL, Mr. Ahmadu-Kida Musa, sharing Total’s remarkable achievements from embracing and advocating the benefits of local content on the Egina project and the perception I got from that is, it didn’t take enforcement to motivate Total, it took vision, a seismic shift in mindset within Total, that was based on sound economic principles, with pay not necessarily being immediate but anchored on a longer term horizon.

It is these sorts of results that make local content seem less academic to sceptics and help bring more converts to the fold for systemic gain.

As an investor in the industry, what are some challenges that may not have been looked at?

Ans: Challenges vary from one vested player to the other; each player has a different personae and as such motivated differently. For example, both the regulator and the producer seek different outcomes from the prevailing fiscal regime and as such will support contrasting regime application. However, common to all will remain challenges to lower production costs and efficiencies, accelerate contracting cycle and execution times, improve security and relations with host communities, amongst several others. Given the importance of host communities and the need to sustain operational stability, it might be necessary for NCDMB, as part of its capacity development initiatives, to include the compliance and enforcements of global MOU’s executed with host communities, as part of its overarching responsibilities, which should enhance trust and confidence within host communities. Nonetheless, the assent of the PIGB will hopefully minimize the uncertainties emanating from all of these challenges.

Untitled 1What’s the next big thing we should be expecting from Vurin?

Ans: We are strategic thinkers. We are innovative. We are also plumbers that have found some interesting leaks, which we are currently working on plugging; upon completion will generate cohesive and sustainable value for the industry.

“At Eroton, we believe strongly in new ways of doing things, thinking out of the box and being creative”

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Dr Theo Okeke, Executive Director and Chief Technical Officer, Eroton Exploration & Production Company speaks to Orient Energy Review

In line with Dr Ibe Kachikwu’s (Minister of State for Petroleum Resources) ambition to up Nigeria’s daily crude oil production by a million barrels, Eroton, through innovative technologies has been able to ramp up its production from 10,000bpd to 65,000bpd without drilling an additional well! A marginal field operator achieving this feat with the use of indigenous engineers obviously puts itself in the league of a very few. The technology deployed here has been DOMESTICATED! And that is the major tenet of local content: in-country value addition.

In this interview with Jerome Onoja on the sideline at NOG in Abuja, Dr Theo Okeke gave some highlights. Excerpts:

What are some of the takeaways for you in the past two days of this conference?

There has been a lot of networking with people in the industry and you get to appreciate what they do and how they can add value to your business. We have been doing a lot of that since yesterday. Networking is key. Also, we get to appreciate the new technology in town and find new ways of doing things. So, it’s been beneficial to my company.

 In his speech earlier today, the Minister of state for Petroleum Resources alluded to the ministry’s effort in reducing the cost of production which will affect the FID in projects, I would like to find out about Eroton’s deliberate plan in the reduction of cost with new technology.

 

We have a lot in the pipeline. As you know, we started production about three years ago and we have been optimizing our operations to get the best out of the old assets. For instance, we were producing less than 10,000 bpd but now we have been able to move up to 65,000 bpd peak production and we keep growing.

We achieved this by optimizing and using new ways of thinking. We added this production not by drilling a single well but by optimizing the existing infrastructure. I personally believe strongly in new ways of doing things, thinking out of the box and being creative. For instance, within our asset, because it’s a brown field, an old asset; we produce oil and water and everything is pumped to the terminal.

We asked ourselves ‘why are we doing this? Because what they charge as tariff on the pipeline is the liquid and the total volume we put in the pipeline- both the crude and the water. So, why are we paying to export water from our field to the terminal? Why don’t we take out the water within our field, and inject it for pressure maintenance? Hopefully before the year runs out, we would be injecting it into some reservoirs that we have identified which will save us cost. It will save us about $3.20/bbl we are paying now as tariff for any barrel of liquid. So, imagine that.

We do a lot of Do –It –Yourself. We do the entire major overhaul of pumps, engines and generators in-house. When we started, there was a lot of corrective maintenance but now we have very minimal breakdown of facility and equipment. The uptime of our critical equipment and facility is well over 95 per cent which is good for an old asset. We have very minimal breakdown of equipment and facility which has helped us with high uptime.

 

I am quite impressed. How did you achieve this? Was it in partnership?

I can tell you that this was all done in-house by Eroton people, our indigenous staff. We had to start from the scratch. We started with the staff we inherited because the working capital was not there.

Also, as a Nigerian with the amount of resources we have and experiences, we should put them to use. Sometimes, we don’t do things because we are not given the opportunity which is what I told myself. It is good enough that I started my career with one of the IOCs before I went abroad which helped to broaden my experience and my way of doing things. I see my coming down to Nigeria as a way of giving back to the country and that was why I took up the challenge and tasked my technical staff that we have to do this. To be frank, that is the success story of moving from less than 10,000 bpd to almost 65,000bpd.

To be fair, one of the things we did was working with the communities where we operate.

We recognized that the communities have something to offer. I mean we should give them the opportunities to also benefit from what is happening. We told them it will be a win-win situation and because of that, we have not had any shutdown due to community issues because we have a special way of dialoguing with them. We develop their capacities to get to do things for us. So, we told them it is not a matter of we giving you bread every time, we also want to help you so that you can do it yourself. So, they bid for contracts just like any other person, they win and get the job done and we are happy about that which has helped us a lot.

 

What’s your advice to other Marginal Oil field operators?

Just like in a market place there are different routes; if you have a winning team, why change it? It is working for us. We are more than happy to share our strategy with anybody. So even though we don’t make a lot of noise about our achievements, our track record is there. It is sad that we have companies that are fond of going abroad to get expats while we have competent and well experienced Nigerians that can do that job and which is one of the strategies we adopted. We said this is a 100 percent indigenous company.

 Do you have a service arm?

For now, we are an E&P company. Our operations are mostly upstream. We explore and produce hydrocarbon. We have some contractors that we get into collaboration with and where we cannot do it ourselves, we employ the services of indigenous contractors. We have very minimal work with high profile contractors, we believe in local contracts, which is the only way we can build capacity as a country. If you go abroad, you’ll see how good and intelligent Nigerians are, they only need the opportunity to prove them and demonstrate what they can do.

 

FG starts Repairs on Apapa-Oshodi Expressway in two weeks

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By Oge Obi

The Federal Government in its resolve to find lasting solution to the chaos on the roads leading to the nation’s biggest seaports, on Thursday assured that the anticipated reconstruction of the Apapa-Oshodi Expressway would commence within the next two weeks.

The Vice President, Professor Yemi Osinbajo disclosed this at a dialogue with stakeholders on the Apapa traffic congestion that held at the Officers Mess of the Western Naval Command in Apapa. Osinbajo said the Federal Government was already looking into the issue of infrastructural renewal, especially with the state of roads in Apapa, adding that approvals for the reconstruction of the Oshodi-Apapa Expressway and other major roads linking the Apapa, Tin Can Island Ports and tank farms would be concluded within the next two weeks.

The Vice President, in company of the State Governor, Akinwunmi Ambode; Minister of Transportation, Rotimi Amaechi; and Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala-Usman, among others led the inspection of the roads in Apapa. He said there was no excuse on the part of the Federal Government on the state of affairs in the area, noting that aside the economic implications; it was also an important residential community that must be allowed to thrive. 

He said, “We have been working quite hard now to get approval for road construction. Among the roads are the Apapa-Oshodi Expressway and Mile 2- Liverpool roundabout are important roads but they have been delayed but I am personally working to ensure that we could get that through and we are trying to look at immediate solutions that can be done and how the process could be expedited to achieve results.

“I can guarantee that we will get all the approvals done. I don’t think that it should take us more than two weeks to get the approval so that we can begin the work. There are so many other bad areas, especially the Coconut area in front of Tincan Port, the Leventis to Wharf Road is also another area we are looking at, the rehabilitation of the Creek Road so that we can have a two lane access into the ports and all of those are important roads and all of them are Federal roads, so we have a responsibility to ensure that these things are done,” Osinbajo said.

Speaking on the need to decongest the Apapa Tincan Ports, the Vice President listed insecurity as one of the major issues preventing the Ports in Port Harcourt, Warri, Onne, Calabar and others from operating. He, however, said that the Federal Executive Council recently approved a security arrangement in the Ports to enable them function optimally.

“A few weeks ago, the Federal Executive Council approved a maritime security arrangement for all of those areas and that has already been deployed. So we expect that as soon as the security architecture is laid out, we should be able to use those Ports frequently and that would of course decongest the Apapa Tincan Ports,” Osinbajo said.

Addressing other issues involving the movement of cargo from the Apapa Ports, the Vice President said the Federal Government was in talks with a concessionaire to rehabilitate the narrow gauge rail, which according to him, will aid the quick movement of goods pending the construction of a standard gauge.

“As Mr. President had directed, what I intend to do, is that we should meet as frequently as possible. We have already drawn up some roadmap and a check list of the various things that we need to do in the next couple of weeks to ensure that we are able to ease the situation around here and make it more decent for people to live in this community and work in this axis. It is important for us as a country and commercially also and we are definitely committed to making sure that it works,” Osinbajo said.

Speaking shortly after an on-the-spot assessment in the Agejunle area, Governor Ambode ordered the immediate shutting down of Climax Bonded Terminal in Ajegunle, saying that their operation was not only illegal but also causing untold hardship to residents in the area. He further directed that the terminal and other adjoining areas be closed, while the trucks parked around the terminal be evacuated within the next 24 hours.

He said that there was no record from the State Government showing that the operators of the terminal were authorised to convert the property for such purpose. He noted that the State Government would not fold its arms and allow flagrant abuse of its building laws to the detriment and safety of residents.

“You guys are causing me a lot of havoc. So, as far as the Lagos State Government is concerned, Ajegunle remains a residential area. I have crosschecked from all the ministries and officials, there is no approval from the Physical Planning for you to use this neighbourhood which is residential as a bonded terminal and then I understand that you are extending to Awodiora.

“I don’t want to do too much problem with your owner, but whoever is the owner would have to come to the Ministry of Physical Planning. I have the duty to protect all the citizens of Lagos State, I will not allow anything you have called Bonded Terminal to reside in a residential area and I need to protect my people.

“It’s bad enough that the roads here are single lanes and then I’ve gone round the whole Ajegunle axis and I’ve seen all the trucks all over the place, so I take over all the places called bonded terminals in Ajegunle from this moment, I shut this place down and all the agencies concerned should take my instructions, I do not no want to ever see this place opened again including all the other places that they have put the terminals and other places they have procured, I would not authorize any place that is residential as a Bonded Terminal.

“Tell the Commissioner of Police, tell others, every person here must evacuate in the next 30 minutes and in all the other locations that they have put in place, they remain under lock and key until I say otherwise. Including Customs, including everybody, tell the CP and the Naval people, I don’t ever want to see it open again. All the trucks that I’ve seen across this axis, in the next 24 hours, I don’t want to ever see it here again and all the other places they have placed them, the Government Monitoring Unit and tell the Director DSS, I don’t want to see anybody here again. Whatever it is that they have put here, I would only open it when they are willing to take all these trucks away from here and that’s my instruction,” Governor Ambode said.

Also in his remarks at the dialogue with stakeholders, Ambode said the meeting was critical as the situation had become a national emergency that required all levels of government to work together to save the economy of the nation and also restore the glory of Apapa axis.

“I want to reiterate my commitment to say that whatever it is that is assigned to me as part of the resolutions that Lagos State should do, we are committed to doing it and we would also cooperate with the Federal Government and every other stakeholder to make sure that we have a permanent solution to this Apapa crisis,” the governor said. 

Local and international financial markets, products & services updates

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The local and international financial markets, products and services update. NIGERIA: The Debt Management Office has set the maximum limit of $6.25bn (N1.906tn) for the Federal Government’s borrowing in the 2018 fiscal year.

The DMO, in the 2017 Report of the Annual National Debt Sustainability Analysis released on Wednesday, said the $6.25bn was proposed to be sourced equally from the domestic and external sources. It stated that the new domestic borrowing would be $3.125bn (the equivalent of about N953.18bn), while external borrowing would be $3.125bn, (about N953.18bn). According to the report, the proposed new limit will afford the government an ample room to mobilise additional resources to fund investment projects that will facilitate the turnaround of the economy, in line with the aspirations of the Economic and Recovery Growth Plan, without jeopardising the country’s debt sustainability.

FX: Trading dynamics did not change yesterday as the market remains bid at the 361.00-362.00 levels. We expect the result of last week’s retail auction to be released by Friday. Year-to-date the Central Bank has sold an estimated amount of c$4.59bn via this auction.

FIXED INCOME: Bills closed yesterday average 10bp weaker because of more naira outflows expected by end of the week.

Bond auction prints came in at 13.69% (+17bp), 14% (+20bp) and 14.2999% (+60bp) on the 5,7 and 10yr respectively. Today, we expect a slight upward reaction in bonds as a moderately weak auction was expected (N67bn sold vs N90bn offered). The average yield on bills at 11.70% and bonds 13.80%.

E.U: Six years to the day since his historic pledge to do ‘whatever it takes’ to keep the euro together, Mario Draghi is likely to confirm that the currency bloc is back to relatively solid economic health.

The ECB president and his colleagues will set policy on Thursday, with analysts predicting the Governing Council will reaffirm that bond purchases will end in December and interest rates could start rising after the summer of 2019. Even the growing threat of a global trade war hasn’t — yet — been enough to shake the conviction that the region can soon be weaned off of monetary stimulus.

CHINA: Some Chinese banks have received notice from regulators that a specific capital requirement will be eased in order to support lending, as the authorities try to mitigate increasing risks to the economy from the trade war.

The People’s Bank of China told some institutions Wednesday that the so-called “structural parameter” in the Macro-Prudential Assessment of their balance sheets will be lowered by around 0.5 points, reducing required capital buffers, according to people familiar with the matter.

COMMODITIES: Oil in London headed to the highest close in almost two weeks after an attack on tankers belonging to top exporter Saudi Arabia heightened uncertainties over supplies, while U.S. crude and gasoline stockpiles plunged.

Brent crude futures advanced as much as 1.1%, on course for a third daily gain. Two Saudi vessels were attacked by Yemeni Houthi militia members, leading Saudi Arabia to temporarily stop sending oil shipments via the Bab el-Mandeb Strait. In the U.S., crude inventories dropped to the lowest since 2015 last week, while gasoline supplies slid for the fourth week.

Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2018           11.20%
Monetary Policy Rate current                     14.00%
FX Reserves (Moving Avg Bn $) as at July 24, 2018,    47,303

Money Market Highlights
NIBOR (%)

O/N                      8.1500
30 Day               12.3722
90 Day               13.1083
180 Day             14.8873
LIBOR (%)
USD 1 Month      2.07013
USD 2 Months    2.17238
USD 3 Months    2.33488
USD 6 Months    2.52250
USD 12 Months  1.72400

Benchmark Yields
Tenor      Maturity      Yield (%)

91d          25-Oct-18     10.98
182d        17-Jan-18     12.13
364d        18-Jul-19      12.83
2y            13-Feb-20     12.96
3y            15-Jul-21      13.54
5y            27-Jan-22     13.62

Indicative Currency Exchange Rates
Bid       Offer

USDNGN (I&E)    361.00      363.00
EURUSD               1.1602      1.1894
GBPUSD               1.3009      1.3300
USDJPY                110.21       112.00
GBPEUR               1.1110       1.1354
USDZAR              13.0503     13.5759
EURNGN               420.55       423.06
GBPNGN               470.66       480.50

Turkey against severing ties with Iran despite US sanctions

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Turkey’s president has argued against severing economic ties with Iran as the United States readies for sanctions.

Speaking in Ankara, President Recep Tayyip Erdogan said it goes against the independence of states to cut ties with its “neighbor and strategic partner” because the US demands it.

President Donald Trump announced in May that he would pull out of a 2015 agreement over Iran’s nuclear program and would re-impose sanctions. His administration threatened countries with sanctions if they don’t cut off Iranian oil imports by early November.

Turkey imported 3 million tons of crude oil from Iran in the first four months of 2018, amounting to 55 per cent of crude supplies and 27 per cent of its total energy imports.

Erdogan asked Wednesday: “Who will heat my country throughout the winter?”

 

  • AP

Kuwait sells 100,000 bpd of new light crude oil in September, say sources

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Kuwait Petroleum Corp (KPC) has sold 100,000 barrels per day (bpd) of its new light crude oil for loading in September as the fifth-largest OPEC producer increased exports after the group’s June meeting, trade sources said on Wednesday.

KPC sold six 500,000-barrel cargoes of Kuwait Super Light Crude (KSLC) for loading in September via a tender to end-users in Asia, they said.

South Korean and Japanese refiners bought the cargoes at prices close to those of Saudi’s Arab Extra Light crude, the sources said.

The rise in Kuwaiti supply comes after the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia agreed to raise output from July by about 1 million bpd as supplies from Libya, Venezuela and Iran decline.

Saudi Arabia, the United Arab Emirates and Russia have also increased light crude supplies to Asia, while open arbitrage windows are also allowing more oil from the Atlantic Basin and the United States to head to the region. The abundant supplies have depressed spot premiums in Asia for September-loading cargoes from the Middle East and Russia.

Production of KSLC could reach up to 120,000 bpd, a senior KPC official said last year.

KSLC was first exported in June to Japan.

  • Reuters

China’s CNPC to invest more than $22bn to boost Xinjiang oil, gas output by 2020

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China National Petroleum Corp (CNPC) says it will spend more than 150 billion yuan ($22 billion) by 2020 to boost oil and gas output in the western region of Xinjiang, to offset falling output from ageing fields in northeast China.

The increased spending will push output in the Xinjiang Autonomous Region to more than 50 million tonnes of oil equivalent between 2018 and 2020, CNPC said.

The spending is equivalent to the annual expenditure by CNPC’s listed unit Petrochina, China’s top oil and gas producer, for oil and gas exploration and production in 2017.

The investment underscores the need to replace output from the Daqing oilfield in northeastern province of Heilongjiang as well as the push to increase the country’s natural gas output to meet growing demand for the fuel as part of Beijing’s shift away from coal.

Beijing also wants to increase development in the unruly Xinjiang region, which borders Central Asia, where hundreds have died in ethnic unrest in recent years.

 

  • Reuter

India’s carbon-dioxide emissions will rise to 3.8-3.9 gigatonnes by 2030 – Study

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New Delhi: India’s carbon-dioxide emission will rise to 3.8-3.9 gigatonnes by 2030 not 3.8-4.9 gigatonnes as was projected earlier, which is consistent with the Nationally Determined Contributions (NDC) pledge made at the 2015 Paris summit, according to a study by an Indian think-tank.

According to the study by the Centre for Policy Research, even if emissions reach to the said level by 2030, India’s expected per capita emissions will be lower than today’s global average.

It said the country was also expect to make a faster shift from coal to renewable energy.

India can expect a faster than predicted shift from coal to renewable energy, and lower than expected energy demand growth – both of which point to lower 2030 emissions, said Ankit Bhardwaj, one of the co-authors of the study.

As a significant emitter of greenhouse gases, but also as a developing country starting from a low emissions base, India is an important actor in global climate change mitigation, the study said.

India’s modelling studies project a wide range of 2030 projections for CO2, the lowest projecting a 9 per cent increase from 2012 levels, and the highest a 169 per cent increase, it said.

India’s emission was projected to rise to 3.8-4.9 gigatonnes by 2030 but the current study found emissions to rise 3.8-3.9 gigatonnes which is consistent with the NDC pledge made at the Paris summit, according to the study.

A closer examination of reference scenarios shows that recently introduced policies (2015 and beyond) are projected to have a material impact on reducing India’s future emissions, and would bring them in line with its nationally determined contributions that were pledged during the agreement, it said.

The study said even if India’s emissions double by 2030, they will be lower than China’s equivalent emissions in 2015.

“Even if emissions double by 2030, India’s expected per capita emissions will be lower than today’s global average. India can expect a faster than predicted shift from coal to renewable energy, and lower than expected energy demand growth – both of which point to lower 2030 emissions,” it added.

  • PTI/ETEnergyWorld

Saudi Arabia receives four bids for $500 mn wind farm

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Egypt’s Renewable Energy Authority Opens Tender for Gabel El-Zeit Wind Farm

Saudi Arabia has received bids from four consortiums competing to build a $500 million Saudi wind farm project, officials said, as the world’s top oil exporter pushes to diversify its energy sector.

France’s EDF Energies Nouvelles placed the lowest bid for the 400-megawatt Dumat al-Jandal wind project in the northern Al Jouf province, while the second lowest was submitted by the French firm ENGIE, the Saudi energy ministry said.

Saudi Arabia’s ACWA Power and Italy’s Enel Green Power were among the other pre-qualified bidders for what is billed as the country’s first utility-scale wind energy project, part of the government’s reform plan to wean the kingdom off oil.

The winning bid is set to be announced on December 18, the ministry added.

“The kingdom’s first utility-scale wind project opens a new chapter in our journey towards a diversified energy mix,” Saudi energy minister Khalid al-Falih said in a statement.

“The development of a wind energy industry in Saudi Arabia is an important component of our wider industrial diversification strategy.”

The project will generate power to supply up to 70,000 Saudi households, he added.

The Saudi national energy programme aims to raise the share from renewables to 3.45 gigawatts in 2020 and up to 9.5 GW three years later.

Saudi Arabia and other Gulf monarchies have been looking into ways to cut their energy bills and diversify their power sources away from oil, their main export commodity.

Virtually all of Saudi Arabia’s power currently comes from crude or refined oil and natural gas.

Earlier this year Crown Prince Mohammed bin Salman unveiled plans to develop the globe’s biggest solar power project for $200 billion in partnership with Japan’s SoftBanks group.

The memorandum of understanding seeks to produce up to 200 gigawatts of power by 2030 — about 100 times the capacity of the current biggest projects.

 

  • AFP