Nigeria targets 2.1m bpd crude oil output in Jan 2017 – Kachikwu

Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, yesterday said Nigeria hopes to boost its oil production to 2.1 million barrels per day next month.

Kachikwu disclosed this while speaking at a Bloomberg Markets Summit in Abu Dhabi, reports Reuters.

The latest revelation is coming on the heels of a previous statement from the ministry on Monday which said Nigeria’s output is at 1.9 million bpd with all three of its main fields online.

Meanwhile, the Nigerian National Petroleum Corporation, NNPC, yesterday outlined a detailed proposal to help the National Assembly fine-tune its deliberation on the draft Petroleum Industry Governance and Institutional Framework law, PIGIF which is currently before it for legislative action.

In a presentation at the public hearing organised by the Joint Senate Committee on the Petroleum Industry Governance Bill, Group Managing Director of the NNPC, Dr. Maikanti Baru, said that though the Corporation is in support of the decision to present the Governance and Institutional Framework as a separate legislation from the Fiscal and Commercial Framework, the prevailing international and domestic business environment makes it imperative to undertake certain revisions to the 2015 Bill as proposed to align it with best international practices.

The NNPC GMD noted that to enhance transparency in the proposed Nigeria Petroleum Company, NPC, which is being mulled as the successor company of the NNPC, should be mandated to publish annually a detailed report on all petroleum revenue payments made to government.

Nigeria proposes broad oil sector overhaul, sale of stakes in NNPC

Nigeria outlined a plan to overhaul state oil company NNPC and eventually list it on the stock exchange in a bid to modernise and streamline an industry known for graft and mismanagement.

The ministry of petroleum released a draft late on Thursday to underpin industry reform stalled for a decade amid disagreements and political infighting over how best to manage the nation's energy resources.

The ministry seeks, in the proposal, to end the OPEC member's reliance on oil exports and shift to a "gas-based industrial economy," and said Nigeria needs to reform the oil sector or risk output falling.

"Unless there are additions to reserves and those reserves are brought into production, Nigeria can expect to see absolute declines in production from around 2020," the plan said.

As a key step to improve crude output of around 2 million barrels a day, Nigeria wants to transform NNPC from an bureaucratic empire where little work gets done into an entity functioning like the private sector.

"NNPC will be made autonomous from the state, it will relinquish all its policy making and regulatory activities, and it will be treated on an equal basis with private sector operators for projects," the draft said.

The West African nation has been mulling a sale of oil assets to raise hard currency as a slump in vital oil revenues has eroded the budget.   

The proposal said a newly formed corporation could sell stakes "so long as the government shareholder retains effective control and ownership." The listing itself is unlikely to happen soon, as foreign investors worried about a new currency devaluation have exited the Nigerian bourse.

The ministry said it will consult with lawmakers over the reform, but it faces serious challenges. Some members of parliament, including from the president's All Progressives Congress (APC), have objected to government plans to sell oil and other assets to raise hard currency.

"It's commendable that they have actually tried to make a petroleum sector policy," said Aaron Sayne, senior governance officer with the Natural Resource Governance Institute.
But he said the lack of details, specific targets and the backing of a broad coalition would make it difficult to achieve many of the aims.
"Where this is short on details is where the vested political interests are the strongest," he said. "It's not clear that it has the political support."
REFINERY REVAMP
The ministry's draft proposes a similar approach to spur investment in the nation's sclerotic refineries, allowing the closure or privatisation of them unless they can become profitable. It would also eliminate any remaining fuel subsidies and aim to deregulate fuel prices.
It also included placing more responsibility for oil spills and pollution on the companies operating them, including criminal "prosecutions of company directors where necessary."
The issue is sensitive for oil majors operating in the Niger Delta oil hub where militants and villagers fight for a greater share of oil revenues and higher compensation for oil spills.
Shell, one of the largest international companies operating in Nigeria, Chevron, and ExxonMobil declined to comment on the plan. ENI did not immediately respond to a request for comment.

- Reuters

Naira to plunge further on high dollar demand

The naira is expected to plunge further against the United States dollar next week as dollar shortage intensifies; following the banning of nine Deposit Money Banks from the foreign exchange market by the Central Bank of Nigeria.

The CBN had, on Tuesday, banned nine banks from the forex market over their failure to remit the Nigerian National Petroleum Corporation’s $2.334bn to the Federal Government’s Treasury Single Account.

On Friday, the naira plunged to 412 against the dollar at the parallel market, down from 409 on Thursday.

Traders said even though the CBN continued to sell dollars daily on the interbank market, its efforts were considered weak and inadequate, Reuters reported.

At the interbank market, the local currency closed at 316.84 to the dollar on Thursday, slightly lower than the level it closed last Thursday.

Kenya’s and Uganda’s shillings are also seen easing next week due to importer dollar demand from energy companies, while the Zambian kwacha is seen firming, according to traders.

At 1010 GMT, commercial banks quoted the shilling at 101.30/50 to the dollar, compared with last Thursday’s close of 101.45/55.

“Because this is going to be the end-of-month week, I still believe there will be a good amount of (dollar) demand in the market. I have a lot of oil clients, a lot of general retail importers,” a trader at one commercial bank said.

Traders said they were also on the lookout for the central bank selling dollars. It did so on Thursday after the shilling weakened in reaction to an amended law that caps commercial lending rates.

The Ugandan shilling is seen shedding value as corporates in the energy sector and other import businesses display their typical end of month demand for hard currency.

At 0941 GMT, commercial banks quoted the shilling at 3,370/3,380, weaker than last Thursday’s close of 3,365/3,375.

“Typically we see a jump in (dollar) demand from fuel importers and some manufacturers … this will play out in the coming days,” said a trader at a leading commercial bank.

The kwacha is next week likely to remain firm supported by a government bond auction settlement on Monday and an anticipated inflow of hard currency to pay salaries and other month- end obligations.

At 1020 GMT on Thursday, the currency of Africa’s second-biggest copper producer was quoted at 10.0000 per dollar from 9.9121 a week ago, Reuters reported.

“Government bond settlement takes place on Monday and we could see dollar conversions from last-minute foreign investors. This together with corporate conversions as we draw closer to month end, could see the local unit hold ground,” the Zambian branch of South Africa’s First National Bank said.

The Tanzanian shilling is expected to trade in a tight band as dollar demand from importers is offset by central bank support.

Commercial banks quoted the shilling at 2,182/2,192 to the dollar on Thursday, barely moved from 2,181/2,191 a week ago.

“The shilling has been stable over the past two weeks. We expect stability in the market to continue, with demand and supply being fairly matched,” a trader at CRDB Bank, Moses Kawiche, said.

Ghana’s cedi is seen firm next week on improving forex inflows as offshore investors sell dollars to mobilise funds to buy domestic bonds.

The local unit was quoted at 3.9535 to the greenback at 1030 GMT on Thursday, down 3 per cent since January, according to Reuters data.

“The government has reopened a five-year (domestic) bond that is maturing on July 2021 and it is likely to lead to some forex inflows… I expect the cedi to regroup to the 3.9400-3.9550 range,” a Barclays Bank Ghana currency dealer, Jacob Brobbey, said.

(punch)