- Nigeria, Iran and Libya got special concessions Wednesday, as OPEC reached a much-sought consensus to cut oil production by 1.2 million barrels per day, effective January 1, 2017. The cut, which is the first after eight previous attempts since 2008, is considered a massive boost to efforts by the global oil cartel to shore up oil prices and end a record glut that has paralysed economies. It is also seen as a major achievement by OPEC’s Secretary General, Nigeria’s Mohammad Barkindo, whose diplomatic shuttles since assuming office in August, led to the “Algiers Accord” that sought to stabilise the market and boost prices. OPEC President, Mohammed Al-Sada, who announced the resolution on Wednesday at the end of the body’s 171st meeting in Vienna, Austria, said the adjustment in output would be shared among all members of the group, to bring their ceiling to 52.5 million barrels per day. The cut is subject to a review after six months, with a possible rollover for another six months on the recommendation of a ministerial monitoring committee of three OPEC countries, namely Kuwait, Venezuela and Algeria. Al-Sada, who is also Qatar’s Minister of Energy and Industry, said the latest output cut was subject to another 600,000 barrels expected to be cut by non-OPEC oil producers who have agreed to support the effort to re-balance the market and restore stability. Nigeria was recommended for exemption to enable it recover from the negative impact of incessant attacks on its oil facilities by armed militant groups in the Niger Delta region, which resulted in a massive cut in its production and export capacities.
- The NCC said it has suspended any further action on the directive to reintroduce a data price floor beginning today. Spokesman Tony Ojobo, said that the decision to suspend the directive was taken after due consultation with industry stakeholders and the general complaints by consumers across the country, adding that the commission had weighed all of these and asked all operators to maintain the status quo until the conclusion of a study to determine retail prices for broadband and data services in the country. According to him, the decision to have a price floor is primarily to promote a level playing field for all operators in the industry, encourage small operators and new entrants. “The price floor in 2014 was ₦3.11k/MB but was removed in 2015. The price floor that was supposed to flag off on December 1, 2016, was ₦0.90k/MB. In taking that decision, the smaller operators were exempted from the new price regime by virtue of their small market share. The decision on the price floor was taken in order to protect the consumers who are at the receiving end and save the smaller operators from predatory services that are likely to suffocate them and push them into extinction. The price floor is not an increase in price but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.” Ojobo said that before the new suspended price floor of ₦0.90k/MB, the industry average for dominant operators including MTN, Etisalat) and Airtel was ₦0.53k/MB. He added that Etisalat offered ₦0.94k/MB, Airtel ₦0.52k/MB, MTN ₦0.45k/MB and Globacom ₦0.21k/MB. The smaller operators/new entrants charge the following: Smile Communications ₦0.84k/MB, Spectranet ₦0.58k/MB and NATCOM (NTEL) ₦0.72k/MB.
- Nipco, an indigenous Nigerian downstream oil and gas company, had executed a Sales and Purchase Agreement with ExxonMobil on October 17 for the acquisition of 216,357,157 shares in Mobil Oil Nigeria, a deal which represents 60 percent of the company. Mobil Oil’s MD, Adetunji Oyebanji said in an NSE notification that Nipco is acquiring those shares for a consideration of $301 million (about ₦91.805 billion) subject to price adjustments for dividends and other factors. Mobil Oil shares rose by 10.2 percent on Tuesday to close at ₦241.89. Considering its market capitalisation of ₦87.2 billion, Nipco is acquiring its stake at a premium. Nipco’s MD, Venkataraman Venkatapathy had said the company considered this acquisition an important synergy. “It is part of our strategic move to support Nipco’s continuous growth and expansion of its Nigerian retail footprint. We are confident of adding tremendous value to Mobil Oil Nigeria and likewise Mobil Oil will add a huge value to Nipco,” he said. Mobil Oil will continue to run as a separate and independent company from Nipco. For the first nine months through September 2016, Mobil Nigeria’s net income increased by 57.69 percent to ₦5.74 billion from ₦3.65 billion the previous year, driven primarily say analysts, by rents from its prime real estate properties.
- An estimated $1 billion would be required to construct the proposed 1,000-kilometre crude oil pipeline from Agadam in Niger Republic to Nigeria’s Kaduna Refinery and Petrochemical Company. The standard cost for laying a pipeline is $1 million per kilometre, while distance and terrain are key determinants in cost, said Dolapo Oni, head of energy research at Ecobank. Experts add that the cost of feasibility studies and other ancillary activities could further take the cost of the pipeline to $2 billion, should the Federal Government see through the proposal. Attacks on the pipelines which supply the refinery prompted the NNPC to halt crude flows to its refineries in Kaduna, Port Harcourt and Warri. Nigeria’s crude production, which was 2.1 million barrels per day at the start of 2016, fell by around a third in the summer, following a series of attacks, since January, by Niger-Delta militants who want a greater share of the country’s energy wealth to go to the impoverished southern oil-producing region. In spite of the nation’s declining economic fortunes, Nigeria spent ₦595.5 billion on the importation of fuel in the first six months of 2016, rising by ₦34.3 billion from the amount spent in the last six months of 2015.
- The NDIC has called on depositors who lost their money in any closed banks to file their claims through appointed 10 agent banks nationwide. NDIC’s MD, Umaru Ibrahim, said the appointed agent banks were First Bank; UBA; Zenith; Wema; Heritage; Union; Fidelity; Skye; Unity and Diamond banks. Ibrahim said in addition, depositors could also file such claims at any of its zonal offices nationwide for the payment of such claims. He said the corporation had also extended deposit insurance coverage to the subscribers of non-interest banking institutions under the Shari’ah compliant banking services to the maximum limit of ₦500,000 per depositor.