Oil & Energy
Covid-19 Increased Global Debt By $24trn – OPEC Scribe
The Organisation of Petroleum Exporting Countries (OPEC) says the impact of the COVID-19 pandemic increased global debt by $24 trillion, taking it to $281 trillion during the crisis.
Speaking at the 135th meeting of the Economic Commission Board (ECB) of OPEC, the cartel’s Secretary-General, Dr. Sanusi Barkindo, urged member countries to be wary of the inflationary effect of their borrowings as the $24 trillion is more than the United States annual Gross Domestic Product (GDP).
Barkindo spoke just as the Petroleum Industry Bill (PIB) may, again, run into troubled waters this month as Shell Nigeria Exploration and Production Company (SNEPCo) yesterday opposed the passage of the proposed legislation in its present state, seeking a review of its provisions on the gas sector.
Barkindo also reiterated his earlier position that oil demand will hit pre-pandemic levels by the fourth quarter of 2021 to exceed 99 million barrels per day.
The meeting of the ECB, the organisation’s statutory economic think-tank, which meets in advance of the ordinary meetings of the OPEC conference, focused on reviewing the conditions of the global oil market, emerging trends related to the oil industry, including demand, supply and stock movements, as well as the recovery prospects for the world economy.
Barkindo highlighted the contributions of the Declaration of Cooperation (DoC) of participating countries, which continue to support the global oil market through voluntary production adjustments in the interest of market stability.
On OPEC forecast for demand recovery, Barkindo stated that the market optimism was a reaction to the more than 2.4 billion vaccine doses that have now been administered globally.
Also, there are signs that the international community is ramping up its support to developing countries to help bolster their acquisition of life-saving vaccines.
He said these efforts were drawing the world closer to bringing the pandemic under control, and thereby helping accelerate the global economic recovery, as the latest market developments point to much better conditions and improved prospects.
On market fundamentals, Barkindo stated that in terms of the global economy, the GDP growth forecast has risen from 4.4 per cent in November 2020 to 5.5 per cent in June 2021.
He added that an upward momentum into the second half of the year is being expected.
He restated his earlier forecast that China and the US will see the lion’s share of growth in 2021, with China’s economy expanding by 8.5 per cent and the US by 6.4 per cent.
According to him, India, despite having to confront a devastating second-wave of COVID-19 infections is still forecast to achieve a growth of 9.5 per cent.
He said: “The forecast for world oil demand has decreased from 6.2 mb/d in November 2020 to 6 mb/d in June 2021. The outlook for later this year looks especially promising with demand slated to exceed 99 mb/d in the fourth quarter. This prospect would bring us back close to pre-pandemic levels.”
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By Felicity Bradstock for Oilprice.com 16
Oil & Energy
Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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