Oil & Energy
FG Targets More Revenue As US Increases Crude Purchase
The Federal Government is currently anticipating an increase in income from crude oil sales following resumption of crude import by the United States (US) from Nigeria.
The US resumed huge crude oil importation from Nigeria, increasing the country’s oil revenue by N156billion last month, according to findings by The Tide source.
US increased its imports to 4.3 million barrels in March, which is the highest since June 2018, according to Customs data on Refinitiv Eikon.
Refiners from the US turned to other crude oil sources for the first time in seven years to boycott supplies from Russia as sanctions for the Ukraine invasion.
Part of the crude grades the country turned to was North Sea’s Forties and Nigeria’s Bonny Light.
It would combine crude oil from the North Sea, West Africa and North Africa with sour crudes from Mexico and Saudi Arabia to meet refiners’ preferred specifications
Nigeria’s Bonny Light sold for $78 per barrel in March, and 4.3 million barrels were exported to the U.S. bringing total revenue from the country’s oil export to the world’s largest economy to about N156bn.
The US bought 5.18 million bpd from Nigeria in December 2018, down from 10.03 million bpd in January of the same year.
In 2019, its imports plunged to 539,000 barrels per day in February from 4.87 million bpd in January.
Nigeria’s Light sweet crude is very similar to the light oil produced in US shale.
The increase in US shale production caused the country’s appetite for Nigerian crude to drop significantly.
In 2014, when global oil prices fell from a peak of $115 per barrel, Nigeria saw a further drop in U.S. imports of its crude to 21.24 million barrels.
For the first time in decades, the US did not purchase oil from Nigeria in July and August 2014 as well as June 2015, according to the Energy International Agency data.
In 2010, the US bought as much as 358.92 million barrels from Nigeria but slashed its imports to 280.08 million barrels in 2011.
The country imported just 125,000 barrels of oil from Nigeria in 2021.
Nigeria used to be one of the major crude oil suppliers to the US; however, Canada took over the position with its increased oil sand production.
The Chief Executive Officer of Centre for the Promotion of Private Enterprise, and the immediate past Director General of the Lagos Chamber of Commerce and Industry, Dr Muda Yusuf told The source that Nigeria’s failure to meet its OPEC quota and the continued importation of refined petroleum products had robbed the country of the gains of the increased exports to the US
“This is good news for Nigeria. Although Nigeria has been unable to meet its production quota from OPEC and then we still import petrol, otherwise, oil-producing countries are currently smiling to the bank,” he said.
He advised Nigeria to make the most of the current increase in revenue, caused by the Russia-Ukraine war.
“What the increase in importation from the US means is that Nigeria will now have more inflow of foreign exchange, more revenue and closer friendship ties with the country.
“The best thing is for us to take advantage of the current increase in revenue”, he stated.
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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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