16 Dec

Daily Watch – Inflation hits 18%, PENGASSAN shuts ExxonMobil HQ over mass firing

  • Nigeria has seen its crude oil production surpass Angola to first place on the continent, the latest OPEC data shows. Nigeria had in March lost the top spot to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd. The country has seen a rise in militant attacks on its oil facilities in the oil-producing Niger Delta region in recent times, denting oil production. OPEC, in its Monthly Oil Market Report for December, which was released on Wednesday, put crude oil production from Nigeria at 1.782 million bpd in November based on direct communication, up from 1.39 million bpd in October. Angola said it produced 1.688 million bpd in November, up from 1.507 million bpd the previous month, when it lost 142,000 bpd of its output. Nigeria recorded the biggest increase in output in the month among its OPEC peers, followed by Angola. Saudi Arabia, the group’s biggest producer, saw its output rise by 95,000 bpd in November to 10.72 million bpd, according to the data. OPEC, which uses secondary sources to monitor its oil output but also publishes a table of figures submitted by its 14-member countries, said the group’s total production in November averaged 33.87 million bpd, showing an increase of 150,800 bpd over the previous month. The group has recently agreed to a new production target of 32.5 million bpd as per January 1, 2017, representing a reduction of around 1.2 million bpd from October production levels. Nigeria and Libya were exempted from any obligation to cut output as both countries have continued to suffer production losses from militant attacks and political instability. The country hopes to boost its crude oil production to 2.1 million bpd in January, according to junior petroleum minister, Ibe Kachikwu.
  • The Consumer Price Index which measures the rate of inflation in Nigeria rose to 18.48 percent in November, new NBS figures reveal. The NBS said in the CPI report for the month of November which was released on Thursday that the 18.48 percent inflation rate is 0.15 percentage points higher than 18.33 percent recorded in October. The report blamed the rise in inflation rate on increases recorded in the housing, water, electricity, gas and clothing materials.” The report reads in part, “The CPI which measures inflation increased by 18.48 per cent (year-on-year) in November 2016, 0.15 percentage points higher than the rate recorded in October (18.33 percent). During the month, the highest increases were seen in housing, water, electricity, gas and other fuels, clothing materials, books, liquid fuel passenger transport, motorcycles and shoes.” The report stated that communication and insurance index recorded the slowest pace of increases in November, rising at 5.61 percent and 6.76 percent year-on-year respectively. It said the food sub-index increased by 17.19 percent year-on-year in November, up by 0.10 percentage points from the 17.09 percent recorded in October. The urban index, according to the report rose by 20.07 percent year-on-year in November from 19.91 percent recorded in October, while the rural index increased by 17.10 percent in November from 16.95 percent in October.
  • The Nigerian headquarters of U.S. oil major, ExxonMobil, has been shut following a standoff with blue-collar oil unions over the sacking of 150 ExxonMobil workers. Members of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN besieged the Lagos office of the oil giant, protesting the sacking of some of its Nigerian staff. The standoff is coming on the heels of a similar development on Wednesday in Upkenekang, Akwa Ibom, where angry youths disrupted the company’s operations over the sacking of contract workers who are from the area. The protesters, numbering over 1,000, barricaded entry points to the company with boats, coffins, leaves and placards, having different inscriptions. The Chairman of the ExxonMobil Branch of PENGASAN, Paul Eboigbe, confirmed the closure of the company’s Lagos office. He told the News Agency of Nigeria that the management of the company went ahead to issue sack letters to workers while negotiations were still going on. He said the union had to resist the action of the management and went ahead to shut down the ExxonMobil headquarters. Eboigbe called on the company’s workers at offshore locations to shut down rigs.
  • Nigeria auctioned ₦69.2 billion ($227 million) worth of domestic bonds on Wednesday, less than it offered after investors demanded higher yields for the notes, traders said. Nigeria had initially offered to sell ₦95 billion in bonds maturing in 5, 10 and 20 years time, but cut back supply after investor demanded yields as high as 19 percent for the notes.
  • The NSE announced the listing by the introduction of ₦6,295,000,000 Series 1, seven-year 18.50 percent fixed rate bond due in 2023 under the ₦50 billion Wema Funding SPV Plc debt issuance programme. Commenting on the listing, NSE CEO, Oscar Onyema, said, “We are pleased to be listing the Wema Fund SPV bond, a further affirmation of our unique platform to help businesses access capital. Despite the challenging macro environment, this bold step by Wema Bank is indeed commendable as only businesses that continue to execute on their strategy will be at a vantage position to benefit when the economy rebounds.” Speaking at the bond listing ceremony, Wema Bank’s MD, Segun Oloketuyi noted that the bank’s turnaround plan, which began in 2009, was in its growth phase, hence the raising of Tier II capital to ensure the availability of long-term capital to support growth.