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W. Africa Crude-Angolan exports rise, NNPC hikes official selling prices – Reuters

LONDON Feb 16 (Reuters) – Angola issued its largest export plan in five months, while Nigeria increased its official selling prices. Traders said eastern demand was supporting differentials for all West African oil grades.

ANGOLA

* Angola’s April export plan of 1.69 million bpd marked the highest scheduled exports since November last year.

* The plan included two April-loading cargoes of Olombendo crude from the East Pole field that oil major Eni started this year. It also added one 950,000 barrel cargo of Olombendo to the March export plan.

* The exports also included just two cargoes of Pazflor, prompting discussion of maintenance on the field, but no plans were confirmed.

* Traders were awaiting allocations to term buyers, and price indications had not yet surfaced.

NIGERIA

* Nigeria’s state oil firm NNPC raised its March official selling prices for Bonny Light and Qua Iboe crude oil to 31 cents and 36 cents above dated Brent, respectively.

* The February differential for Bonny Light was 18 cents, while for Qua Iboe it was 30 cents per barrel.

* Loading plans had emerged for April exports of several grades, including four cargoes of Bonga, compared with a revised March plan of only one cargo, and four cargoes of each Erha and Usan.

* Some Bonga loadings were delayed by as much as 20 days as some sources said field operator Shell had shifted planned maintenance on the field. Shell has declined to comment on maintenance plans.

* Spot differentials versus dated Brent had firmed in recent days, with Agbami offered at a 20 cent premium to dated Brent, Qua Iboe as high as $1.50 above dated Brent and Bonny light also above a dollar above dated Brent.

TENDERS

* Total and Vitol each won the right to supply a VLCC to India’s IOC, which had asked for West African crude for loading between April 20-30. The grades were not immediately clear.

* In its last tender, IOC bought 3 million barrels of Nigerian oil and one million of Angolan.

* India’s MRPL was also running a tender to buy 1 million barrels of April-loading crude oil, traders said, which closes next week.

* Thailand’s IRPC was tendering to buy oil, a trader said.

RELATED NEWS

* OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said.

* Oil exports from Iraq’s southern terminals have edged lower so far in February, according to loading data and an industry source, a sign that OPEC’s second-largest producer is keeping a lid on shipments following a commitment to cut output. (Reporting by Libby George; Editing by Susan Thomas) ))

 

IBM invests $70m, targets 25million jobs in Nigeria, others – Guardian

• Watson-powered project will prepare youths for knowledge-based economy

IBM is investing $70 million in building much-needed digital, cloud, and cognitive Information and Technology (IT) skills to help support a 21st century workforce in Nigeria, South Africa, Kenya and other parts of Africa.

The initiative, “IBM Digital – Nation Africa”, provides a cloud-based learning platform designed to provide free skills development programmes for up to 25 million African youths over five years, enabling digital competence and nurturing innovation in Africa.
The Digital – Nation Africa is designed to boost overall digital literacy, increase the number of skilled developers able to tap into cognitive engines, and enable entrepreneurs and prospective entrepreneurs grow businesses around the new solutions.

The initiative will be supported by the United Nations Development Programme (UNDP), which has a special focus on fostering market-driven ICT skills in Africa and the Middle East.

The plan is expected to take many African youths out of the labour market and secure them with the right information that would enable them contribute positively to economic growth.

This is part of IBM’s global push to build the next generation of skills needed for “New Collar” careers.

“New Collar” is a term used by IBM to describe new kinds of careers that do not always require a four-year college degree but rather sought-after skills in cybersecurity, data science, artificial intelligence, cloud, and much more.

For African youths to be able to benefit from a cognitive future, IBM said there needs to be a much higher level of digital literacy. At the top of the skills pyramid are developers, who need to know how to create solutions that can leverage the power of cognitive, and entrepreneurs who are aware of the potential.

Africa has approximately 200 million people between the ages of 15 and 24. By 2040, the continent is expected to be home to the world’s largest labour force, with an estimated working age population of one billion (State of Education in Africa Report 2015). Yet many African companies cite local skills gap as one of the major bottlenecks to growth.

Through a free, cloud-based online learning environment delivered on IBM Bluemix, the premier cloud platform for business, the initiative will provide a range of programmes from basic IT literacy to highly sought-after advanced skills including social engagement, digital privacy, and cyber protection.

Advanced users will be able to explore career-oriented IT topics including programming, cybersecurity, data science and agile methodologies, as well as important business skills like critical thinking, innovation, and entrepreneurship.

The initiative aims to empower African citizens, entrepreneurs, and communities with the knowledge and tools to design, develop, and launch their own digital solutions.

Based on Watson, the cognitive online system will adapt and learn. It will review the multiple interactions the education initiative will have with students, to help direct them to the right courses and help IBM refine the courses to better adapt the material for the needs of the users.
Watson will also create a depth of knowledge using anonymous information gathered from interactions with the students. This will help entrepreneurs and developers understand which current Bluemix solutions best meet their needs and refine their idea to help them design a solution that has greatest market potential.

The programme will be launched from IBM’s regional offices in South Africa, Kenya, Nigeria, Morocco, and Egypt, to spread the initiative across the continent.

Country General Manager, IBM South Africa, Hamilton Ratshefola, said IBM sees effective, high quality IT education as a key driver of economic vitality in Afric, adding that through access to open standards, best practices, IBM tools, and course materials, the broad scope of this initiative will enable vital skills development.

“In order to find solutions to Africa’s challenges, industries across the spectrum need to enable the existing and future workforce to perform at the forefront of technologies such as cognitive and cloud computing. This will be the key to spurring economic growth,” he stated.

IBM will collaborate with UNDP on opportunities for STEM (Science, Technology, Engineering, and Mathematics) skills delivery, certification, and accreditation.

UNDP will work with their network of existing government partnerships to extend the programme throughout Africa.

UNDP’s 2015 Human Development Report highlighted that technology is affecting the nature of work by introducing new ways of communicating, new products and new demands for skills. New technologies are also reinforcing and deepening previous trends in economic globalisation, bringing workers and businesses into a global network through outsourcing and global value chains.

“These processes are reshaping work and testing national and international policies. In an attempt to address this global challenge here in South Africa, as well as in other priority countries in Africa.

UNDP is pleased to leverage its global presence, development knowledge, and long standing partnerships to provide context, traction and scale to this collaboration with IBM,” said UNDP Country Director in South Africa, Walid Badawi.

Nigeria aims to present reform plan in Feb for $1 bln World Bank loan – Reuters

* Nigeria wants at least $1 bln from World Bank -sources

* Seeks to drag itself out of first recession in 25 yrs

* Plans to present economic plans this month -sources

By Paul Carsten, Ulf Laessing and Chijioke Ohuocha

ABUJA/LAGOS, Feb 9 (Reuters) – Nigeria wants to borrow at least $1 billion from the World Bank to help haul it out of recession and plans to present the required economic reform proposals to the lender this month, officials and diplomats told Reuters.

The oil producer, which has been hit hard by a sharp fall in crude prices since 2014, has been in talks with the Washington-based lender for a year to secure a loan to help plug a yawning budget deficit and fund badly needed infrastructure projects.

But the government has not specified how much money it was looking to borrow from the World Bank, saying only that it aimed to raise $5 billion abroad. It was previously also unclear when Nigeria planned to present its proposed reforms to the lender – which will not consider a loan before it reviews the plans to make the economy more resilient and attractive to investment.

The government now plans to present its economic reform proposals by the end of February, according to government officials and Western diplomats who declined to be named as they are not authorised to speak publicly.

One senior government official said Nigeria would seek a loan of $1 billion from the World Bank, while a second senior official said it could seek as much as $2 billion.

The Nigerian finance ministry declined to comment on the size of the loan being sought or the timing of the submission of the reform proposals.

The World Bank also declined to comment on those matters. A spokeswoman said Nigeria’s economic proposals would be the “basis of which the World Bank will determine with the government the most appropriate lending instrument to support the implementation of the reform plan”.

It was unclear what the government’s economic reform programme would contain.

NEW ROADS

Nigeria, which relies on oil revenue for most of its income, is struggling to drag itself out of its first recession in 25 years. It needs money to help plug a budget deficit of 2.2 trillion naira ($7 billion) for 2016 and help fund a record budget of 7.3 trillion naira for 2017 aimed at stimulating the economy.

It had planned to apply for a World Bank loan last year but the process had ground to a halt because it failed to submit its economic recovery plans by the end of December as initially promised, sources told Reuters last month.

The African Development Bank (AfDB), meanwhile, is holding back the second, $400 million, tranche of a $1 billion loan because it is also awaiting the reform plans.

Nigeria will present its economic proposals to the AfDB at the same time as the World Bank, according to the government officials.

A spokeswoman for the Abidjan-based AfDB declined to comment.

It is unclear why the government has not previously submitted its reform plans to the two international lenders. A funding deadlock could throw into doubt badly needed projects planned for this year, including new roads and improvements to power infrastructure.

The government is selling $1 billion of Eurobonds this week but this falls short of the $5 billion Nigeria said a year ago it wanted to borrow abroad including the World Bank.

‘CRITICAL REFORMS’

Nigeria’s government has butted heads with investors over the best course for the economy.

A reluctance by Nigerian authorities to apply a more flexible foreign exchange rate policy and other macroeconomic reforms to stimulate foreign investment has hampered talks to secure loans abroad.

The AfDB has criticised Nigeria’s central bank’s decision to curb access to hard currency, which has forced the closures of manufacturing plants unable to import raw materials.

The World Bank says it supports “critical reforms for restoring macroeconomic resilience”. Western diplomats say the bank wants to see how Nigeria plans to lower its dependence on oil revenues and boost investment, which has been hit by a high official exchange rate for the naira currency.

Nigeria’s central bank, backed by President Muhammadu Buhari, has kept the naira rate to the dollar at 40 percent above the unofficial – or parallel – market rate, which has dried up dollar supplies on official channels.

The policy has also made investors reluctant to commit new projects as they expect the central bank will have to devalue the naira eventually.

($1 = 315.0000 naira) (Additional reporting by Felix Onuah, Oludare Mayowa and Joe Bavier; Writing by Ulf Laessing; Editing by Pravin Char)

 

Why education is essential in the Nigerian forex space – The Cable

BY ANDREAS THALASSINOS

Nigeria has entered its worst recession in over 29 years. According to the Nigerian National Bureau of Statistics’ (NBS) GDP report, Nigeria’s economy contracted by 2.06 percent in the 2nd quarter of 2016. This translates into its lowest growth rate in three decades.

While economic woes are affecting the outlook of the country, individuals are trying to insulate themselves from the effects of high interest rates, unemployment and an inflation rate of over 18%. Saving in this environment can be extremely challenging, even Nigerians who are able to save, are not getting traction. A lack of savings capital is not just a Nigerian issue however; a report issued by the OECD last year, revealed that there is a global pension crisis. It states that people retiring today can expect half the income of those who became pensioners at the start of the millennium.

A person buying an annuity today, who saved 10 percent of their income into a pension for 40 years, will receive just over half the earnings of someone who saved the same amount but retired 15 years ago. Consequently, it can come as no surprise that an increasing number of Nigerians are looking at alternatives to build up their wealth and Forex trading has become an interesting and accessible option.

The appeal of Forex trading, especially if you live in a country that is hamstrung by inflation and economic uncertainty, is that it offers investment opportunities in foreign instruments that deliver real returns in strong markets. In addition to Forex trading, products such as CFDs also offer the trader benefits because they can capitalise on opportunities regardless of whether the market is moving up or down given that they take the correct side of the trade.

A CFD is a “Contract for Difference”, it is a contract to exchange the difference in value of a financial instrument (the underlying market) between the time at which the contract is opened and the time it is closed. Traders also don’t need to own the underlying asset, meaning they can make investments with significantly lower capital commitments.

At first glance, Nigeria would not be your usual suspect if you had to speculate which nation would embrace Forex trading, but if you dig deeper, it makes perfect sense. Nigeria has been under the spotlight for some time as the economy has experienced some major disruptions. Notably, taking the title of Africa’s largest economy away from South Africa and enduring the consequences of unpegging the naira from the USD in 2016, as well as dealing with a massive debt burden. From my experience, when teaching students how to trade the financial markets throughout different regions, I am often asked about global events and how they are impacting the markets.

The media landscape is becoming more sophisticated and access to news via multiple devices is sensitising Nigerians to global issues and how they affect their economy. Increased coverage of global financial developments and awareness around market volatility, has helped to focus attention towards market movements and increased Nigerians’ desire to learn more about the financial markets.

Infrastructure has also played a pivotal role in the uptake of Forex trading, as Nigeria has made significant improvements in their internet connectivity and especially, mobile services. Statista, a Data and Statistics Portal estimated that Nigeria is likely to have about 15.5 million new smartphone users in 2017 and mobile internet has reached over 90 million users.

This means that there are more people taking advantage of mobile solutions and the huge array of applications that have been developed for smartphones. The rise of mobile trading apps and on-the-go solutions, have created the prime conditions for online trading – a trend we have seen confirmed in the extremely high demand for our ForexTime Trading App. An impressive one third of the downloads on active devices come from Nigeria.

While the ability to access a vibrant Forex trading market is good news for Nigerians, it comes with a caveat. Investing in Forex, or any other financial instrument for that matter, requires a degree of education.

Even investing in a basic bank product needs research because different savings products offer a variety of returns and flexibility. As you move up the scale of investment products – the higher the returns, the higher the risks, so jumping into the Forex market “green” may have less than favourable results. Forex trading is now available to, and being considered by, a much wider audience with more varied backgrounds.

Potential investors may have no experience in finance or economics, so taking the time to learn about the technical and fundamental aspects of the trading environment, is crucial to the success of the investor. FXTM is acutely aware of this fact and has invested heavily in online tutorials, workshops and videos to make sure investors enter the market with confidence.

While Nigerian clients have shown a strong appetite for Forex trading, they have also acknowledged the need for education, and this has been confirmed by the fact that the FXTM workshops have been particularly well attended.

We have also witnessed a strong interest in FXTM Invest- our investment and copy trading program. In fact, over one third of the users of FXTM Invest are Nigerian. This trend shows that people are interested in trading but don’t necessarily have the time necessary to trade effectively, so they prefer to invest instead.

This is a correlation that we are also spotting outside of Nigeria and I believe that there is still room for further growth in social trading on a global level. At present, clients from Nigeria account for 36% of our active investors and we saw a growth of 114% in registered accounts in 2016.

The most popular currency pairs traded by our Nigerian clients are EURUSD, GBPUSD, USDJPY, as well as Gold and not surprisingly Oil, which is Nigeria’s primary export. As a result of the strong growth in this African market, we have expanded our operations to South Africa and recently secured a license to operate from the Financial Services Board.

Like all investments, currency trading carries risks that have to be managed. As brokers, it is our responsibility to ensure our traders have access to all the tools and information that will help them safely navigate the markets. Helping to build our traders’ skills in fundamental and technical analysis, and assisting them to get a solid understanding of the markets, ensures that investors will have rewarding trading careers.

As Nigeria makes its transition from a purely commodity-based to a more diversified economy, we see a bright future for currency derivatives and intend to continue investing and growing our presence in this country. We strongly believe that our focus on education is the key to a sustainable and successful relationship with traders.

Thalassinos, is a professor and head of education at FXTM.

Nigeria to raise 130 bln naira bonds on Jan. 18 -debt office – Reuters

LAGOS Jan 11 (Reuters) – Nigeria plans to auction 130 billion naira ($426 million) in local currency-denominated bonds on Jan. 18, its first debt sale this year, the Debt Management Office said on Wednesday.

The debt office said it would issue 40 billion naira apiece in bonds maturing in 2021 and 2036, and 50 billion naira of paper maturing in 2026, using the Dutch auction system.

Settlement for the bond sale is expected on the following day. All the bonds on offer are reopenings of previous issues.

Africa’s top crude producer and biggest economy issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

Last week, it said it plans to issue 340 billion to 430 billion naira worth of bonds during the first quarter.

The government has proposed a 2017 budget deficit of 2.36 billion naira for this year, which it aims to fund by borrowing 1.254 trillion naira domestically and 1.067 trillion naira abroad.

($1 = 305 naira) (Reporting by Oludare Mayowa; Editing by Catherine Evans)

 

Nigeria retail currency traders set FX rate before cenbank meeting – Reuters

By Oludare Mayowa

LAGOS Jan 10 (Reuters) – Nigeria’s bureau de change operators set their first ever reference exchange rate for the naira at 399 to the dollar on Tuesday, saying they wanted to help reduce the gap with the official interbank rate.

The government has been pressing retail operators to narrow what it says is a damaging gulf between the naira’s official rate – currently at 305 to the dollar – and the parallel rate – as weak as 490 in recent days.

Bureau de Change association president Aminu Gwadabe, who is due to meet central bank officials later on Tuesday, said his members had agreed to set a weekly reference rate to improve liquidity and help rebuild investors’ confidence on the economy.

“Once liquidity improves, the wide margin between the parallel and official market rates will be bridged,” Gwadabe told reporters.

He said the naira’s outlook was “promising” as crude prices have started to rise. Low prices have dried up the oil income that makes up 70 percent of government revenues, cutting the dollar supply and pushing Africa’s largest economy into recession.

Retail currency operators account for less than 5 percent of total foreign currency trading in Nigeria. But with liquidity poor on the official market due to low oil revenues and the central bank left as the main dollar supplier, the bureau de changes have done more business.

Gwadabe said the body was seeking approval from the central bank to access dollars from exporters and has recommended suspension for some of its members for failing to submit documents on forex purchases from money transfer agents.

The naira lost a third of its official value against the dollar in 2016. (Writing by Chijioke Ohuocha)

 

W. Africa Crude-BPCL takes Nigerian, China snaps up Angolan – Reuters

LONDON Jan 9 (Reuters) – Chinese demand for Angolan crude continued apace, and another Indian refiner booked Nigerian oil via a tender, but other spot trading was relatively quiet.

* Outright prices for West African crude slipped along with benchmark dated Brent, which was trading 3 percent lower on word that OPEC member Iraq marked record exports from its southern Basra port in December despite an OPEC commitment to cut overall output.

* Angolan state oil company Sonangol has cut output by 78,000 barrels per day to (bpd) to 1.673 million bpd as part of an OPEC agreement to lower supply from Jan. 1, it said in a statement late on Friday.

* The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) oil labour union will stage a three-day strike at Chevron CVX.N and Exxon Mobil XOM.N fuel depots from Wednesday in a protest over sackings if talks with the government fail, union officials said on Monday.

NIGERIA

* India’s BPCL took two cargoes of Nigerian crude, and a pending tender from IOC set to close this week could absorb more.

* The awards included Agbami, Akpo, Bonga and Bonny Light.

* Other buying interest was notably thin due in large part to unpredictable loading plans for several grades.

* There had been no fresh Bonny Light loading schedule issued since the closure of the Trans Niger Pipeline due to a fire on Jan. 3, and offers for the grade had also gone quiet.

* Offer levels for other grades were slipping due to the demand constraints. ExxonMobil had offered Qua Iboe as low as 80 cents above dated Brent.

ANGOLA

* Chinese demand for Angolan crudes and other medium grades was robust, traders said, due in part to the narrow spread between Brent and Dubai crudes that made West African grades more attractive.

* China’s Unipec has snapped up several cargoes over the past two weeks, including Pazflor from ExxonMobil at dated Brent plus $1.20 per barrel, Nemba from Sonangol at around minus 60 cents along with cargoes of Dalia and Saxi.

* Traders said Cabinda was around 40 cents below dated Brent, Hungo minus $1.30 per barrel and Mondo at minus $1.20.

TENDERS

* Indian refiner BPCL had awarded its tender to buy February-loading crude oil to BP and Shell with cargoes of Agbami and Akpo, respectively.

* More details emerged on a tender awarded last week by fellow Indian refiner IOC. It purchased one VLCC from Shell and another from Total, including Bonga, Bonny Light, Akpo and Girassol.

* Vitol had won a tender from Perenco for Djeno crude oil loading in February, traders said. Djeno was trading at around dated minus $1.30 per barrel, but details on the tender were not immediately available.

* India’s IOC was running two tenders this week to buy oil, one for sweet crude and another for sour. (Reporting by Libby George; Editing by Ruth Pitchford)

 

Why China withholds $20b concession loan to Nigeria – Guardian

Presidency official blames negative economic growth

Multiple negative growth recorded in the economy in 2016 has been identified as one of the reasons the Chinese government withheld a $20 billion concession loan earlier promised Nigeria upon due verification, The Guardian has learnt.

A top Presidency source privy to the development told The Guardian that the Federal Government had been hopeful that the Chinese government would release the loan last year, given the relationship between the two countries, but expressed disappointment that the money was withheld.

The action of China may well be an indication of the loss of confidence in Nigeria’s credit worthiness by the global financial community. Analysts have predicted that the current economic downturn would dent the country’s credit worthiness. The situation has increased the concern over Federal Government’s ability to borrow the $30billion for infrastructure development, which the National Assembly has refused to approve.

According to the source, government immediately swung into action after the President’s return from a visit to China as well as the follow-up visit of the Budget and National Planning Minister, Udo Udoma, to immediately fulfill the conditions for accessing the loan.

“We were very hopeful that we would secure that loan and other levels of assistance from the Chinese government. This is not to say we have given up though. We had set up an inter-ministerial committee working closely with the Chinese government officials as well as the China Exim Bank experts. They may have their reasons, but we are determined to fulfill our end of the bargain, and the Federal Government has already appropriated large sums for payment of counterpart funds on key projects to enable us to commence work proper,” the source said.

In 2015, China had, at a summit of the Forum on China-Africa Cooperation (FOCAC) held in Johannesburg, South Africa, pledged a $60 billion assistance to countries on the continent, including Nigeria, to develop and grow their infrastructure and human development capacities.

The move was not surprising as China had remained the continent’s top trade partner for six consecutive years.

The Chinese government said $35 billion had been set aside for concessionary loans, out of which about $10 billion was to go into the China -Africa Fund for Production Capacity. About $5 billion each was earmarked as non-interest grants for China-Africa Development Fund, and special loan schemes for the development of Small and Medium-Scale Enterprises (SMEs) among qualified African countries. The funds were said to have been on ground for prompt disbursement.

The Federal Government had last year planned to raise a total of N2.2 trillion through external borrowings from China and other foreign finance institutions to fund the deficit in the 2016 budget, the implementation of which it said would continue till May 2017.

Unexpectedly, the nation’s Gross Domestic Product (GDP) – which measures the market value of all final goods and services produced in a period, suffered a steady decline from quarter to quarter in 2016, sending negative signals to investors and lowering Nigeria’s credit worthiness in the international financial market.

In the first quarter (Q1) of 2016, the Nigerian economy contracted by -0.36%, followed by further contraction by -2.06% in Q2, even as the slide continued in Q3 to -2.24%.

Hopeful that the concession loan and other categories of financial assistance from China would be approved early, President Muhammadu Buhari led a delegation to Beijing in April last year to make a strong case for the country.

This was, however, not to be, as the Chinese government was advised by its economic experts who visited Nigeria for physical assessments to exercise caution, citing the shrinking economy and falling value of the naira.

They also alluded to high risks in diverting the loan to projects not specified in the agreement and requested a direct monitoring of the projects, in addition to the need for full compilation of all current trade agreements between the two countries till date, The Guardian learnt.

A team of experts from China Exim Bank had also expressed fear of possible mismanagement of the funds and requested an overhaul of some of the priority areas presented by the Federal Government for closer study on their viability and sustainability.

The Chinese financial experts, it was further learnt, expressed reservations about some areas the Federal Government was keen on investing the loan, saying they did not fall in line with the FOCAC vision.

However, a ministry official, who pleaded anonymity, in a text massage response to The Guardian, said: “All appropriate loan prospecting options by the Federal Ministry of Finance are on course, and are undergoing normal process of negotiation,” without giving further details.

The National Assembly has refused to approve the $30 billion worth of loans until the executive provides details of what they are meant for, even as there are speculations that the refusal was more political than economic as the executive had opposed the provision for constituency projects in the budget.

Nigeria targets 2.6 million barrels per day refining capacity – Guardian

Nigeria may be on the path to becoming self-sufficient in the production of petroleum products, as the Federal Government expects to increase the country’s refining capacity from 445,000 barrels per day to 2.62 million barrels per day.

To achieve this, the Department of Petroleum Resources (DPR), has granted licences to 22 private firms to establish refineries, which are expected to produce 1.97 million barrels per day in the short, medium and long period.

If these refineries come on stream, the country is expected to save over $15 billion yearly from the importation of petroleum products, create jobs and meet the needs of industrial firms, which depend on by-products from refineries.

Already, nine companies have submitted bids for co-location of new refineries within the complexes of Nigeria’s three existing refineries in Kaduna, Warri and Port Harcourt, which are expected to increase the nation’s refining capacity from 445,000 barrels per day (bpd) to 650,000bpd.

DPR, in its yearly report on the oil and gas sector stated that the Federal Government hoped to achieve 50 per cent domestic refining capacity by 2020, through a combined policy of deregulation and rehabilitation of aging plants.

According to the agency, in line with this aspiration, DPR has already granted 25 Licenses to Establish (LTE) and five Approvals to Construct (ATC) refineries in Nigeria to qualified companies.

It stated that one of the 25 LTE holders, Dangote Oil Refinery Company (DORC) has progressed the refinery development project to the equipment fabrication stage.

DPR said that the DORC project is due to be commissioned in 2018 and would add 500,000 BPSD to the domestic refining capacity.

The agency stated: “The modular refinery model is now emerging as a credible solution to the dismal share of domestic refineries. The model is gaining credence due to its comparatively lower establishment and running costs. Compared to bigger refinery projects, the modular solution appeals more to the marginal upstream producers desiring maximisation of assets value through local refining of produced oil.

“So far, DPR has issued 22 LTE and three ATC, respectively for modular Refineries projects. The projects have cumulative potentials to boost the domestic refinery capacity by more than 671,000BPSD on completion.”

The DPR noted that Nigerian refineries are plagued with peculiar domestic challenges and are not able to produce at sub-optimal levels partly due to the increasingly aging plants.

It added that incessant disruption of crude oil and product pipelines have posed further challenges to operations.

DPR said that there is a yawning gap between domestic demand and output from the domestic refineries, clearly underscores the need for proactive policies to bridge the gaps.

The agency noted that the continued low domestic refining capacity especially poses a peculiar policy challenge, in view of expanding local market for petroleum products.

According to the DPR, growing the domestic refining capacity would reduce the dependence on foreign products, boost local content, generate new jobs and develop requisite competencies in the ancillary sectors. “It would also free the foreign exchange market from undue demand pressures of petroleum products imports,” it added.

The agency said the future of the domestic refinery sector would be greatly improved through policy consistency, secured crude oil supplies and improved infrastructure. “Government is committed to tackling all the associated challenges facing the effective development of the domestic refinery sub-sector by promoting the business-friendly environment that is capable of driving the growth that will ensure the emergence of Nigeria as a refining hub in Africa,” it added.

The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf urged the Federal Government to liberalise the downstream petroleum sector for unfettered private sector participation and investment, while ensuring that the refineries are operated as commercial business entities.

He said the approach should be subjected to appropriate regulatory framework that defines the role of NNPC, while a model that would allow for a level playing field for all operators including the NNPC should be adopted.

“We have concerns over lack of clarity on the deregulation and liberalization of the sector. This policy lacuna has put many investments in the sector at risk; while many other investment decisions have been put on hold.

Nigeria interbank lending rate eases on budget cash injections – Reuters

LAGOS Dec 16 (Reuters) – Nigeria’s overnight lending rate fell this week to around 3 percent on Friday from an average of 3.9 percent a week ago on expectations that budget cash will be injected into the banking system on Friday or Monday, traders said.

Nigeria, an OPEC member and Africa’s biggest economy, relies on crude oil sales for two-thirds of national income. All government revenue is shared among the country’s federal, state and local governments each month.

On Thursday Nigeria distributed 387 billion naira ($1.27 billion) revenue, among the three tiers of government. A portion belonging to state and local governments is passed through the banking system.

“Interbank rates are priced at 3 percent on the expectation that the budget allocation will be credited to the system on Friday or latest by Monday,” one senior currency dealer said.

Though Nigeria raised 147.48 billion naira ($484.33 million) worth of treasury bills and 69.2 billion naira in bonds maturing in five, 10 and 20 years’ time at auctions on Wednesday, the market remains liquid enough to support the prevailing rate, traders said.

Traders said the cost of borrowing among commercial lenders should stay flat in the coming days as banking activities slow ahead of the festive season and the year-end closure of financial year. ($1 = 304.50 naira) (Reporting by Oludare Mayowa; Editing by Alexis Akwagyiram/Mark Heinrich)