Nigeria’s Buhari urges Delta leaders to calm region after attacks – Reuters

BUJA, June 30 (Reuters) – Nigerian President Muhammadu Buhari on Thursday urged community leaders from the Niger Delta to pacify people in the restive southern region, which has been hit by a series of attacks on oil and gas facilities in the last few months.

Nigeria, an OPEC member which was until recently Africa’s biggest oil producer, relies on crude sales for around 70 percent of national income. Most of its oil comes from the impoverished swampland Delta region.

Militants, whose attacks pushed oil production to 30-year lows in recent weeks, have called for a greater share of the country’s oil wealth to be passed on to the region’s communities and for authorities to clean up areas blighted by oil spills.

“When you get together with other leaders, please pacify the people,” Buhari told a delegation of community leaders at his residence in the capital, Abuja, adding that he wanted “as much intelligence as possible on the situation in the Niger Delta”.

“We intend to rebuild this country,” said Buhari. “A lot of damage has been done, so I want you to tell the people to be patient.”

Comments made to the group during the meeting, which lasted around an hour, were detailed in an emailed statement issued by the presidency titled “We’ll rebuild the Niger Delta”.

Earlier this month it was announced that the government’s military campaign in the Delta would be scaled down, after having been built up a few weeks earlier, to pursue talks with militants.

Last week petroleum ministry sources said a month-long truce had been agreed with militants but the Niger Delta Avengers, who have claimed responsibility for most attacks, later said they did not “remember” agreeing to a ceasefire.

However, the Avengers have not carried out an attack since June 16.

Following Thursday’s meeting, Buhari’s spokesman Femi Adesina said an amnesty agreed in 2009 to end a previous insurgency was “being studied with a view to determining what had been fulfilled”.

If there were any outstanding issues, these would be addressed, he said.

The president angered former militants earlier this year when he cut the budget assigned to the amnesty programme, which offered militants cash and job training in exchange for stopping attacks, by two-thirds.

(Reporting by Felix Onuah; Editing by Mark Trevelyan; Writing by Alexis Akwagyiram)

 

Nigeria’s forex reserves fall slightly to $26.34 bln by June 28 – Reuters

LAGOS, June 30 (Reuters) – Nigeria’s forex reserves fell marginally to $26.34 billion by June 28, down 0.30 percent from a month ago, central bank data showed on Thursday.

Dollar reserves of Africa’s biggest economy stood at $26.42 billion last month, down 9.2 percent from a year ago.

The central bank lifted 16=month-old currency controls last week and auctioned $4 billion in the spot and futures market to clear a backlog of dollar demand, to help boost interbank market trading. (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha)

 

OPEC oil output hits record high in June on Nigerian rebound – Reuters

* OPEC supply rises by 250,000 bpd to 32.82 million bpd

* Nigerian output, after attacks, posts biggest rise

* Iraq only major Middle East producer not raising output

* For a table of OPEC output, see

By Alex Lawler

LONDON, June 30 (Reuters) – OPEC’s oil output has risen in June to its highest in recent history, a Reuters survey found on Thursday, as Nigeria’s oil industry partially recovers from militant attacks and Iran and Gulf members boost supplies.

Higher supply from major Middle East producers except Iraq underlines their focus on market share. Talks in April between producers on freezing output failed and have not been revived as a recovery in prices to $50 a barrel reduces the urgency to prop up the market.

Supply from the Organization of the Petroleum Exporting Countries has risen to 32.82 million barrels per day (bpd) this month, from a revised 32.57 million bpd in May, the survey based on shipping data and information from industry sources found.

That June output figure would be less than the average demand OPEC expects for its crude in the third quarter, suggesting demand could exceed supply in coming months if OPEC does not pump more than current levels.

“We could see a slight supply deficit – it depends on further development of unplanned outages,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

OPEC’s June output exceeds January’s 32.65 million bpd, when Indonesia’s return as an OPEC member boosted production and output from the other 12 members was the highest in Reuters survey records, starting in 1997.

Supply has surged since OPEC abandoned in 2014 its historic role of cutting supply to prop up prices.

The biggest increase in June of 150,000 bpd came from Nigeria, where output had fallen to its lowest in more than 20 years due to militant attacks on oil facilities, due to repairs and a lack of major new attacks since mid-June.

Iran managed a further supply increase after the lifting of Western sanctions in January, sources in the survey said, although the pace of growth is slowing.

Gulf producers Saudi Arabia and the United Arab Emirates increased supply by 50,000 bpd each, the survey found. Saudi output edged up to 10.30 million bpd due to higher crude use in power plants to meet air-conditioning needs.

“Exports are fairly flat, refinery runs are flat and crude direct burn is up, so directionally supply is up from May,” said an industry source who monitors Saudi output.

Libyan output rose by 40,000 bpd after the reopening in late May of the Marsa al Hariga export terminal, the survey found. Supply is still a fraction of the pre-conflict rate.

Among countries with declining supply, Iraq pumped less for a second month. Exports in the south of the country have been trimmed by maintenance work, power cuts and higher domestic demand, Iraqi officials say.

Venezuela’s supply is under downward pressure from its cash crunch.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data, and information provided by sources at oil companies, OPEC and consulting firms.

(Editing by Ruth Pitchford)

Oil falls below $50 on higher supply outlook, economic worries – Reuters

* Oil worker wage talks begin in Norway

* Return of Nigerian supply could hit prices -Goldman

* Brexit, slowing Asia, darken economic outlook

* U.S. crude inventories fall 4.1 million barrels

By Alex Lawler and Dmitry Zhdannikov

LONDON, June 30 (Reuters) – Oil fell below $50 a barrel on Thursday, pressured by higher Nigerian output and concern about the economic outlook following Britain’s vote to leave the European Union last week.

Returning Nigerian supply will put pressure on prices, Goldman Sachs said, adding that outages caused by Canadian wildfires would virtually end by September.

Norwegian supply could be hit by a threatened workers’ strike, however.

Brent crude was down 88 cents a barrel at $49.73 as of 1242 GMT, having risen in the two previous sessions. U.S. crude was down $1.02 to $48.86.

“Supply is gradually improving in Canada, although in Norway we still have some risk,” said Olivier Jakob of Petromatrix, who added a weak gasoline refining margin was weighing on crude.

“I don’t think the case is there for $30 oil, but to go to $60 you need to see stronger support from the (refined)products.”

Brent has risen by 85 percent since reaching a 12-year low in January, supported by expectations that a glut that has been weighing on prices since 2014 would start to ease and by unplanned losses from Canada to Nigeria.

“We have a large overhang of surplus stock to work off and that will take some time as well. I’d imagine that over time you will see more upward pressure than downward pressure on prices,” said Royal Dutch Shell’s chief executive Ben van Beurden.

Nonetheless, the return of some of that oil and concern over a slowing economy, compounded by Britain’s vote to leave the European Union, are weighing near-term, analysts said.

Adding to economic concerns, industrial output in Asia’s second-largest economy, Japan, slid in May at the fastest rate in three months to its lowest level since June 2013.

On the supply front, oil production in Nigeria has risen to about 1.9 million barrels per day (bpd) from 1.6 million, due to repairs and a lack of new major attacks on pipelines in the Delta region, the state oil company said on Monday.

“Short-term supply conditions look overwhelmingly bearish,” said Georgi Slavov, global head of energy, iron ore and shipping research at Marex Spectron, in a report on Wednesday.

In Norway, oil companies and trade unions began two-day wage talks in a bid to avert a strike that would initially cut the country’s oil and gas output by 6 percent, the Norwegian Oil and Gas Association said.

Oil gained some support from tightening supplies in the United States. U.S. crude stockpiles fell for a sixth consecutive week, the U.S. Energy Information Administration reported on Wednesday. (Additional reporting by Henning Gloystein and Ron Bousso; Editing by Jason Neely and William Hardy)

 

CBN, oil firms sell dollars on interbank market – Reuters

LAGOS, June 30 (Reuters) – Nigerian central bank has sold $7 million at 283 naira to the dollar on the interbank currency market on Thursday, one trader at a major commercial bank told Reuters.

Traders said the local units of ExxonMobil, Chevron, Eni and Addax sold a combined $37.2 million through commercial banks for import of petroleum product to the country.

The interbank market traded a total of $60 million volumes by 1256 GMT, with the naira quoted at 283 to the dollar. (Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha)

 

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Dollar to Naira Rate Black Market June 30 2016

Dollar to Naira Rate Black Market June 30 2016. Today’s Naira Black Market Exchange Rates. Dollar to Naira. Pounds to Naira. Euros to Naira.

Prevalent rates for the City of Lagos. Actual rates may vary slightly based on vendor. Rates are updated during the day as they change.

NAIRA (N)

USD ($)

EURO (€)

GBP (£)

BUY/SELL

BUY/SELL

BUY/SELL

30/6/2016

344/350

370/380

450/455

29/6/2016

344/350

375/382

450/455

28/6/2016

345/355

365/375

460/470

27/6/2016

343/348

365/375

465/475

24/6/2016

335/340

365/375

470/485

These are the day’s opening rates. For the latest up to the minute rates, visit our home page www.fxmallam.com.

Check out trending news stories that could affect today’s black market rates at fxmallam.com/news/

 

 

 

 

Foreign investors ‘want naira devalued above 300/$1′ – The Cable

The new foreign exchange regime implemented by the Central Bank of Nigeria (CBN) saw the naira “effectively devalued” from 197 to about 283 against the dollar on the official side.

The naira has lost over 30 percent of its value to the dollar since the start of the new regime, but many foreign investors are not convinced, and they are seeking more devaluation of the local currency.

Prior to the start of the new regime, investors have always asked that the CBN devalues the naira to reflect market realities.

Renaissance Capital (RenCap), a Russian investment banking firm with a base in Victoria Island, Lagos, said in January that the fair value of the naira was 305 against the dollar, urging the CBN to devalue to 240,250 at the time.

Now that the CBN has let go of its 16-month old peg on the naira, the naira has depreciated below RenCap’s requested 240,250, but other investors want more depreciation.

Christine Phillpotts, a stocks analyst at AllianceBernstein, says the fair value of the naira is 320/$1.

“It’s hard to tell what the central bank has in mind, it’s probably driven equally by economics and politics,” she said. “It comes down to Buhari and his comfort level with the new regime.”

President Muhammadu Buhari has insisted that he is opposed to  devaluation, driving investors to presume a naira peg in the not-too-distant future.

AllianceBernstein LP and Loomis Sayles & Co., which are currently among investors navigating post-Brexit global market turmoil, say CBN is not letting the naira weaken enough.

“The central bank is probably wondering why investors haven’t moved back in following the devaluation,” Rick Harrell, an analyst in Boston for Loomis Sayles, which oversees $229 billion of assets, told Bloomberg.

He said investors were “being cautious and the main reason why is the state of the economy. The fundamental backdrop isn’t positive.”

Bloomberg says trading in the Nigerian interbank foreign exchange market is yet to pick up, partly because the central bank cleared a backlog of dollar demand by selling more than $4 billion in the spot and forward markets on the first day without the peg.

“That the currency’s been so stable since the devaluation tells me that the central bank is still heavily managing it,” Harrell said.

“If we saw gradual depreciation to 300 or above, investors might feel more comfortable coming back.”

Despite floating the local currency, the CBN says it will intervene in the market from time to time to ensure proper regulation, assuring the nation that the naira would settle at 250/$1.

CBN, Citibank Execute First Naira-Settled OTC FX Futures of $20m – Thisday

Central bank confirms talks on planned resumption of dollar supply to BDCs

The first Naira-settled over-the-counter (OTC) foreign exchange (FX) Futures on the FMDQ OTC Securities Exchange was yesterday executed between the Central Bank of Nigeria (CBN) and Citibank Nigeria Limited.

Although the FMDQ which disclosed this on its website, did not give further details about the transactions, THISDAY gathered from a reliable source in the market that the total amount of the FX Futures contract was $20 million.

“That money will come into Nigeria and in the short-medium term, as FX inflows into Nigeria increases, we expect to see an improvement in the liquidity position of the market,” the source who pleaded to remain anonymous said.

But at the end of trading yesterday, the exchange rate for the OTC FX Futures for one-month closed at N279/$1; while the two-month rate due for settlement on August 24 closed at N277/$; the three-month rate due for settlement on September 28 closed at N275/$, and the 4-month rate due for settlement on October 26 closed at N267/$1. In addition, while the 5-month OTC FX Futures closed at N260/$; the 6-month rate N250/$1; the 1-year rate closed at N225/$1.
The Naira-settled OTC FX Futures contracts was launched on Monday when the CBN sold naira-settled OTC FX Futures contracts of non-standardised amounts for different tenors from one month through to 12 months.

The Managing Director/CEO of FMDQ, Mr. Bola Onadele, had described the naira-settled OTC FX Futures product was a major milestone in the evolution of Nigerian financial markets.
“The futures market is an opportunity to transform risk into certainty – a major paradigm shift in the financial markets landscape. This innovation provides opportunities for government, businesses, pension fund administrators, investors, individuals, etc., to hedge (not speculate), cope with exchange rate risk.

“It also affords the CBN a greater opportunity to manage exchange rate volatility, thus achieving greater market confidence, liquidity, improvement in business planning, job security, employment, better allocation of resources, global competitiveness of the Nigerian financial markets, and all in all, a thriving economy,” Onadele said.

Apparently excited by the cheering news on about the Naira-settled OTC FX Futures deal, the naira appreciated against the dollar by N1.09 on the NIFEX as it closed at N281.23 to a dollar yesterday, stronger than the N282.32 to a dollar it closed on Tuesday. Also, on the parallel market, the naira ended on a positive note as it gained N4 to close at N352 to a dollar,stronger than the N356 to a dollar it closed on Tuesday.

Meanwhile, the central bank yesterday confirmed that it had been discussing with members of the Association of Bureau De Change of Nigeria (ABCON) on how to accommodate the currency dealers in the new forex regime.

Deputy Director, Financial Policy and Regulation Department, CBN, Mr. Anthony Ikem, made this known while speaking at an interactive session on the flexible exchange rate policy in Lagos yesterday.

Ikem said the operators’ proposal to participate at the interbank market was under consideration.
According to him, the central bank recognises the BDC sub-sector as a critical segment of the market and so was working on how to accommodate them in the new forex regime.
He urged the bureau de change operators to exercise patience, saying the CBN was aware of the challenges confronting the sub-sector.

He added: “The CBN is asking the BDCS to exercise patience. The New policy is still being tested to see how it would be later. Even as the policy is being tested, the CBN still understands the role of the BDCs in the country. They are still relevant in the scheme of the affairs of the country.”

Earlier in his presentation, the Acting President, ABCON, President, Alhaji Aminu Gwadabe, appealed to the CBN to restore and enforce the self-regulatory status of ABCON and to develop a framework for regular training for BDCs.

Kachikwu Signs $80bn Oil and Gas Infrastructure Deals in China – Thisday

Ejiofor Alike in Lagos and Chineme Okafor in Abuja

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has signed Memorandums of Understanding (MoUs) with several Chinese firms for over $80 billion new investments, spanning five years, in the oil and gas industry covering pipelines, refineries, gas and power, facility refurbishments and upstream financing.

Speaking exclusively to THISDAY yesterday from Beijing, China, Kachikwu said the agreements had been executed during the three-day roadshow in the Asian country to attract investments to Nigeria’s oil and gas sector.

The objective, he said, is to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.

He said: “I can confirm that we had a successful outing and finally raised investment commitments and signed MoUs worth $80 billion.

“Out of this, $10 billion approximately was raised on the sides with our steer and push for two Nigerian companies – Delta Tek and Salvic Petroleum – while the balance of $70 billion includes MoUs signed by investors and financiers for projects with the Nigerian National Petroleum Corporation (NNPC).”

Salvic Petroleum is a company founded and chaired by Dr. ABC Orjiako, who is also the Chairman of foremost Nigerian oil independent, Seplat Petroleum Plc.

Kachikwu also revealed that other than the agreements executed for investments totalling $80 billion, he also got commitments from Sinopec and China National Offshore Oil Corporation (CNOOC) to commit to further investments in Nigeria’s upstream oil sub-sector to the tune of $20 billion, which would be concluded in the next few months.

This, he said, would effectively bring the total amount of prospective investments by Chinese firms over a five-year period to over $100 billion.

“Outside these (MoUs for $80 billion investments), the two largest oil companies in China, Sinopec and CNOOC, signed investment MoUs agreeing to announce after further discussions on major investment increases in the Nigerian oil and gas in the next few months.

“Given the areas of focus of these two companies, we do not expect that investment to be less than $20 billion. The net effect of these and other agreements in principle reached with investor interest in China on this roadshow will potentially provide investment funds for Nigerian oil and gas of over $100 billion over the next five years.

“These investments cover every facet of Nigeria’s oil and gas sector – upstream, pipelines, downstream, gas and power, modular refining in the creeks, engineering services, etc.

“It has been a fantastic outing and if we can follow through on all these, it will change the face of Nigeria’s oil and gas forever. This will bring hope even to the Niger Delta and is the single biggest amount of MoUs signed on investment in any third world country in a roadshow,” he said.

The minister informed THISDAY that his ministry and NNPC would work round the clock over the next few months to perfect all the documents and meet all the conditions precedent to draw down on the commitments made by the Chinese firms.

“We will work round the clock to meet the conditions precedent to draw down and make these investments a reality. Of course, the federal government’s approval on certain commitments will be required as these involve sovereign guarantees.

“But the number of projects that require sovereign guarantees are very limited, as most of them are build and operate projects such as the pipelines and refineries, which are attractive prospects for the Chinese firms that have expressed interest in coming to Nigeria.”

He added that unlike the oil-for-infrastructure deals with Chinese, Korean and Indian firms entered into by the Olusegun Obasanjo administration, but all went burst due to the federal government’s inability to meet its own side of the bargain, the projects would not be paid for with oil, adding that the returns on investments made by the Chinese would come from the projects.

Also speaking to THISDAY yesterday, an official in the petroleum ministry said Kachikwu signed the MoUs with companies that included China North Industries Corporation (NORINCO), CINDA, CNOOC, Chem China and Sinopec/Addax and ICC-NDRC, among others.

He said: “The huge success of the roadshow leveraged on the minister’s 30 years experience and contacts in the oil and gas industry, as well as President Muhammadu Buhari’s leadership and support.”

He added that the roadshow was a fallout of two months of planning by officials of NNPC and the petroleum ministry that targeted investment meetings with 38 Chinese firms.

“Other roadshows to India and the Gulf states are planned by Dr. Kachikwu for July and August should there be a need for this.

“This show of support reflects the growing international confidence in Nigeria’s oil and gas sector following major reforms over the last seven months and belief in the government and integrity of President Buhari by foreign governments and investors.”

Following THISDAY’s enquiries, a statement provided by NNPC also said: “The Nigerian National Petroleum Corporation wishes to announce the recent landmark strides the corporation has achieved in its bid to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.

“This comes in the form of a first of its kind roadshow in China where memorandums of understanding (MOUs) worth over $80 billion to be spent on investments in oil and gas infrastructure – pipelines, refineries, power, facility refurbishments and upstream – have been signed with Chinese companies.

“Dr. Kachikwu, while speaking during the plenary of a special Investors’ Roundtable which had in attendance over 300 Chinese and Nigerian businessmen and investors with a key focus on the oil and gas sector, reiterated that the roadshow was organised as a follow up to the earlier working visit of President Muhammadu Buhari to China in April, 2016.

“He further commended the efforts and resolve of the president whose steer and support in ensuring that there is a marked transformation of the oil and gas industry has inspired the management to work towards institutionalising of focus, accountability, commitment and transparency at the corporation.”

NNPC added that the International Cooperation Commission (ICC) of the National Development and Reform Commission (NDRC), in charge of implementing cooperation between the Chinese government, foreign governments and organisations, had committed to developing an overarching master plan for the Nigerian oil and gas sector that would include a detailed feasibility study of the current status of existing infrastructure in the industry.

“They will also develop bankable projects that would attract Chinese investors on this government-to-government platform. This initiative would move us to a much more profitable and efficient state. The master plan would form the basis of massive inflow of further investment from Chinese companies into the sector.

“At the end of the plenary, Dr. Kachikwu expressed his gratitude to the Chinese government and investors for the show of support which reflects the growing international confidence in Nigeria’s oil and gas sector following the major reforms that have been overseen under his leadership as both Group Managing Director of NNPC and Minister of State, Petroleum Resources over the last seven months, and also the belief in the government and integrity of President Buhari by foreign governments and investors.

“Dr. Kachikwu further mentioned that the China roadshow is the first of many investor roadshows intended for raising funds to support the Oil and Gas Infrastructure Roadmap. Roadshows have been slated for India and the Gulf states,” NNPC said.

 

United Airlines reconsidering decision to pull out of Lagos following Naira float

Houston, TX June 29 (FxMallam) – As United Airlines prepares for its last scheduled flight from Houston to Lagos, Nigeria on June 29, 2016, rumors reaching Fxmallam.com from internal sources suggest that the Houston based carrier may be reconsidering it’s decision to pull out of the West African Country.

Both Houston and Lagos are key centers for the oil and energy markets.

United Airlines had cited the route’s financial performance as the basis of their decision to exit Africa’s largest market.

However, internal sources revealed the Naira peg has restricted the ability for the company to access it’s funds within the country weighed heavily on the decision to end it’s only African route.

In a memo to employees back on May 27, 2016, United cited poor financial performance and weakness in the energy sector for ending the route.

“After careful analysis, we have decided to exit the IAH-LOS (Houston to Lagos) route and redeploy the Boeing 787 aircraft where it can capture more profitable demand,” United said in its Wednesday memo. “Our last flights will be June 29 (eastbound) and June 30 (westbound); after that, customers can travel to LOS via our Star Alliance partners.”

“The IAH-LOS (Houston to Lagos) route has been under performing financially for several years,” United added. “Because of its importance to key Houston-based customers, we continued to invest in it; however, the recent downturn in the energy sector has caused these customers to spend less on travel.”

Now that the Naira has been floated and the Central Bank of Nigeria (CBN) has indicated through action and words to ensure ample foreign exchange availability, a move that United Airlines management didn’t anticipate, the feeling within the company is that a return to Lagos would be in their best interest.

Timeline

“There is no set timeline. UA was not expecting the Nigerian FG to fix the FX policy so quickly and have committed the 787-8 to TLV (Tel Aviv) so there are no available planes,” the United Source told FxMallam.com.

“Fleet Management and Route planning is working together to find a plane they can use. Maybe a 767-300 or one of the many 787-9s they’re taking delivery of. The problem is that those have too much capacity,” the source continued.

No solution is expected in the near term but look for United Airlines to be back in Lagos, Nigeria within 6 – 18 months.

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