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NLNG says it has lost $7 billion in revenue in 2022 due to gas supply constraint, insecurity

NLNG says it has lost $7 billion in revenue in 2022 due to gas supply constraint, insecurity

The Nigeria Liquefied Natural Gas (NLNG) Limited says it has lost almost $7 billion revenue so far in 2022 due to shortage of gas supply.

The revenue loss can be attributed to the increasing security challenge which has hit the oil and gas companies across the country and has negatively been impacting the production and revenues of the NLNG.

This was made known by NLNG’s General Manager, Production, Adeleye Falade, during a panel session at the 45th Nigeria International Conference and Exhibition (NAICE) 2022, with the theme: “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa,” on Wednesday, August 3, 2022, in Lagos.

Falade, who represented NLNG’s Managing Director, Dr Phillip Mshelbila, said the company’s 22 million tons per day plant’s production currently trends at 99.4% year-to-date availability while utilisation hovers around 68%.

He said the data between the 99.4% availability and the 68% utilisation at the moment, which was equivalent to $7 billion revenue, was part of the effect of the critical oil and gas pipelines that were shut down due to insecurity at the facilities.

What the NLNG top official is saying

Falade lamented that the unavailability of important gas pipelines like the Abuja-Kaduna-Kano (AKK) Pipeline and the lack of gas pipelines in the eastern corridor for distribution were impacting negatively on their production.

  • He said, “I’ve spoken eloquently about the AKK Pipeline. In the eastern corridor, we also don’t have enough pipeline distribution pipeline. But the ones that we have, what has happened to them? Today, Trans-Niger Pipeline, which is the main artery in the eastern region, had been down since March. We don’t know when it’s going to come back.
  • “As a result of that, I don’t have gas in the LNG to run my plants. Currently trending 99.4 per cent year-to-date availability, my utilisation is moving around 68 per cent.
  • “The data between that 68 per cent and the 99.4 per cent is equivalent of almost $7 billion revenue today, which would have found its way into our economy, which would have helped our government in a cash-constrained world. And I’m not talking about the impact of upstream.
  • “So what is the guarantee around the security of even the pipeline that we have? And everybody has a role to play in that: government, security agencies, have a role to play.”

Going further, Falade said that based on the work done by the Decade of Gas policy, there was a clear three billion cubic feet (3BCF) gap between gas demand and supply, raising doubts about bridging that gap considering the lack of infrastructure and investment.

What you should know

Insecurity and sabotage, especially crude oil theft, have become the bane of the oil industry in Nigeria, making it impossible for the country to meet up with its Organization of Petroleum Exporting Countries (OPEC)’s quota and its revenue projection in recent years.

Nigeria has been experiencing some of the worst crude oil theft in its history with millions of dollars lost daily. There have been several allegations of complicity levelled against security agencies following the increasing incidents of crude oil theft.

The Federal Government had revealed that Nigeria lost about $1 billion in revenue to pipeline vandals and oil thieves in the first quarter of 2022.

The Chairman of Heirs Holdings, Tony Elumelu, had earlier stated that Nigeria was losing over 95% of its oil production to thieves.

Also lamenting the challenge his company and many others were facing in dealing with security of production facilities and losses in the Niger Delta, Igiehon said the problem has reached an existential level.

Meanwhile, Nigeria has failed to take advantage of the gas supply crisis in Europe and other developed economies due to the Russia-Ukraine war, despite pressure from the European Union (EU) for additional gas supplies to the bloc from the country as it gets set to cut supply from Russia

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Nigeria’s Inflation Rate Surges To 19.64%

Nigeria’s Inflation Rate Surges To 19.64%

The country’s Consumer Price Index (CPI), which measures the level of price change in goods and services, hit 19.64 percent in July 2022 from the 18.60 percent recorded in the last month.

This means a 1.82% month-on-month hike, according to the (CPI) report for July 2022 released by the National Bureau of Statistics (NBS) on Monday.

“On a month-on-month basis, the Headline inflation rate in July 2022 was 1.817 %, which was 0.001% higher than the rate recorded in June 2022 (1.816 %),” the NBS added.

“The percentage change in the average CPI for the twelve months period ending July 2022 over the average of the CPI for the previous twelve months period was 16.75%, showing a 0.46% increase compared to 16.30% recorded in July 2021.”

According to the NBS report, the country’s urban inflation increased by 2.08% to 20.09% in July 2022 from 18.01% in July 2021. On the other hand, the rural inflation rate reached 19.22% from 16.75% in the corresponding period of 2021.

“On a month-on-month basis, the food inflation rate in July was 2.04%, this was a 0.01% insignificant decline compared to the rate recorded in June 2022 (2.05%),” the agency equally noted in its latest report.

“This decline is attributed to a reduction in the prices of some food items like Tubers, Maize, Garri, and Vegetables.

“The average annual rate of food inflation for the twelve-month period ending July 2022 over the previous twelve-month average was 18.75%, which was a 1.42% points decline from the average annual rate of change recorded in July 2021 (20.16%).”

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Nigeria’s SEC says its Capital Market Master Plan is protecting investors, enhancing market confidence

Nigeria’s SEC says its Capital Market Master Plan is protecting investors, enhancing market confidence

Nigeria’s Securities and Exchange Commission (SEC) has stated that its Capital Market Master Plan (CMMP) initiative is promoting transparency, protecting investors and enhancing market confidence.

The SEC stated this in a statement on Sunday in Abuja, disclosing the success of the scheme in the last 8 years, according to NAN.

It said the 10-year CMMP was launched in November 2014 to reposition Nigeria as an attractive investment destination.

What they are saying

The SEC disclosed that the plan was launched to make Nigeria a viable investment destination and critical facilitator of capital formation for accelerated growth and development.

It added that initiatives launched under the scheme include direct cash settlement, regularisation of multiple subscriptions, and introduction of the electronic dividend management system and dematerialisation of share certificates.

The commission also stated that it was ready to hold its second Capital Market Committee (CMC) meeting for exchange of ideas among market stakeholders.

  • The meeting would be an avenue to provide feedback to the SEC on how to continuously address challenges, improve market operations and enhance its regulatory framework.
  • ”It is an industry-wide committee comprising members of SEC, representatives of capital market operators, trade groups and other stakeholders.
  • During the meeting, issues on implementation of the ten-yeah CMMP, Fintech roadmap, the commodities trading ecosystem roadmap and matters relating to the economy will be discussed,” the SEC said.

In case you missed it

  • Recall Nairametrics reported in May, that the Securities and Exchange Commission (SEC) had released new rules for Digital Assets as part of its effort to regulate digital/virtual assets such as Bitcoins and NFTs.
  • This is contained in a recently released document titled, “New Rules on Issuance, Offering Platforms, and Custody of Digital Assets” essentially legalizing digital assets such as cryptocurrencies in Nigeria.
  • SEC said Digital Asset players will now include Digital Asset Offering Platforms (DAOPs), Digital Asset Custodians (DACs), Virtual Assets Service Providers (VASPs), and Digital Assets Exchange (DAX).
  • The rules apply to all platforms that support the trading, exchange and transfer of virtual assets, all issuers and sponsors of virtual/digital assets, including international and non-residential issuers and sponsors; and any operator that aggressively targets Nigerian investors.

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E-payments in Nigeria hit N204.5 trillion between January and July 2022 – NIBSS

E-payments in Nigeria hit N204.5 trillion between January and July 2022 – NIBSS

The Nigeria Inter-Bank Settlement Systems (NIBSS) has said that transactions worth N204.5 trillion were performed electronically in Nigeria between January and July this year through the NIBSS Instant Payment platform (NIP). This shows a 40% increase in e-payments in the country when compared with N145.8 trillion recorded in the same period last year.

The surge in electronic transactions shows that more Nigerians are embracing the cashless policy of the Central Bank of Nigeria (CBN).

According to NIBSS, the value of e-payment recorded was a reflection of the increase in the volume of deals within the period. The NIP volume rose to 2.7 billion in the seven months, showing a 42% increase over 1.9 billion recorded in the same period last year.

Data provided by NIBSS

Monthly analysis

  • An analysis of the 7 months data just released by NIBSS showed that the NIP platform recorded N26.6 trillion transactions in January. Year on year, this was a 43.7% increase over N18.5 trillion recorded in the same month of last year.
  • Similarly, in February, deals worth 27.2 trillion were sealed over the electronic platform. Compared with February 2021 when N18.3 trillion was recorded, this represented 48.6% growth.
  • In March, the platform recorded N31.8 trillion in transactions, a 44.5% increase over the N22 trillion recorded in the same month last year.
  • The value of transactions on the NIP platform stood at N29.2 trillion in April this year. This also shows a 41.6% increase over the N20.6 trillion recorded in April 2021
  • In May, the value of e-payment transactions stood at N29.6 trillion, a 43% increase compared with N20.7 trillion recorded in the same period last year.
  • The NIP transactions rose to N31.7 trillion in June 2022, a 37% growth over N23.1 trillion posted same time in 2021.
  • The data for July also reflected a 31% increase from N22.4 trillion last year to N29.3 trillion this year.

The NIBSS Instant Payments (NIP) is an account-number-based, online-real-time Inter-Bank payment solution developed in the year 2011 by NIBSS. It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.

According to NIBSS, over the years, Nigerian banks have exposed NIP through their various channels, that is, internet banking, bank branch, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), POS, ATM, etc. to their customers.

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