Energy

Nigeria rate cut on the horizon as global monetary easing cycle gains momentum

Published

5 years ago

July 25, 2019

grassroots

BY: Lukman Otunuga, Senior Research Analyst at FXTM

Unfavorable macroeconomic conditions across the globe have prompted major central banks to embark on a monetary easing cycle to counter a global slowdown.

There is widespread speculation that the US Federal Reserve intends to trim interest rates in order to prevent an economic deceleration in the world’s largest economy.

The global financial markets have reacted positively to the idea, which theoretically makes access to funding for business activities easier, boosting investor sentiment and economic growth.

The US central bank’s caution is influencing other central banks like the European Central Bank, Bank of England and Reserve Bank of Australia among many others. In Africa, the South African Reserve Bank has already cut interest rates while the Central Bank of Nigeria (CBN) is turning dovish amid deteriorating economic conditions in the wake of trade disputes.

However, in its July meeting, the CBN decided to keep its Monetary Policy Rate (MPR) unchanged at 13.5 percent to allow time for the full impact of other measures. So far, these include a firm bank directive from July requiring 60 percent of deposits to be available for lending to the real economy instead of buying government securities.

These securities are high yield because of the current 13.5 percent MPR and understandably attractive to the banking sector seeking stable investments of their own. Making sure money is in circulation instead of being tied up in government bonds sounds like a rational way to keep the economy on the road to recovery.

After surprising markets with an unexpected rate cut in March, the central bank could cut interest rates again during the second half of 2019. However, reducing the MPR when the inflation rate is already at 11.22 percent risks further overheating prices. Like many other emerging economies, Nigeria may be exposed to the impacts of a global slowdown but its economy is very different to the US’ which is currently experiencing anemic price inflation.

This may be why the CBN decided to prioritize reducing inflation to single digits and said it is in no hurry to reduce its key rate. In other effects, foreign investment in Nigeria is likely to see benefits from the CBN’s decision to hold rates at 13.5 percent.

This is based on the argument that international investors may be looking for higher-yield securities than those in the mature markets, especially in the light of declining or negative interest rate environments in Europe and the US.

The global monetary easing bandwagon has affected the oil markets differently from global equities. Instead of being heartened by the prospect of better lending rates, investors are focusing on the weaker global outlook for growth and Oil demand. The fact that OPEC decided to maintain its supply cuts until 2020 on the basis of weaker demand for Oil only reinforces the impression that it would take a dramatic event to reignite supply-shortage fears.

In addition, the US Oil industry is pumping output at record levels, meaning that OPEC supply cuts are effectively neutralized in terms of boosting Oil prices. These circumstances have pressured Oil price benchmarks, West Texas Intermediary (WTI) and Brent Crude. Oil prices depreciated during the course of July, pulled back by a reverse tide of lower growth expectations.

The third quarter holds the potential for the Central Bank of Nigeria to cut interest rates.

A fragile economic recovery coupled with external risks in the form of trade tensions and Oil price volatility should encourage the CBN to re-join the global monetary easing bandwagon.

Although a rate cut is in the pipeline, the level of inflation will determine how many times the CBN pulls the trigger on rate cuts. Signs of easing inflationary pressures during the third and fourth quarter of 2019 could offer enough breathing room for the CBN to cut rates to 13% by year end.

Energy

AVEVA Appoints Joanna Mainguy as New Sustainability Accelerator Director

Published

2 months ago

March 13, 2024

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Joanna Mainguy, Sustainability Accelerator Director at AVEVA

Joanna Mainguy will steer strategies for sustainability innovation across AVEVA’s portfolio and partner ecosystem, furthering ESG targets for 2025 and beyond

AVEVA, a global leader in industrial software, driving digital transformation and sustainability, today announced the appointment of Joanna Mainguy as Sustainability Accelerator Director.

Joanna’s appointment testifies to AVEVA’s dedication to strengthening the company’s sustainability impact in line with advancing global climate commitments.

As Sustainability Accelerator Director, Joanna Mainguy will focus exclusively on sustainability solutions and strategies to accelerate innovation that will help AVEVA’s customers to achieve their net-zero targets.

She will look at how AVEVA leverages current market and customer analysis to inform its in-house development team, advise on new customer collaborations and on how AVEVA should grow its partnership network and M&A pipeline to reflect its sustainability priorities.

Joanna will lead the implementation of a sustainability solutions plan tailored to meet the most pressing needs of AVEVA’s industrial customers on low-carbon transition, circularity and resilience, via an integrated product, marketing and sales approach. She will work closely with AVEVA’s portfolio, business area and R&D leads to continue to develop new sustainability capabilities and drive collaboration on go-to-market initiatives that support industry with contributing to an accelerated energy transition and shift to a circular economy.

Joanna was formerly Industry Director, EMEA, for Energy & Sustainability at Microsoft, where she led strategic engagements with major energy providers and supported the energy transition with digital solutions. She has worked across the entire energy value chain and has more than 15 years of experience in process industries and the energy sector, including work for major system integrators, software and energy companies.

Lisa Wee, Global Head of Sustainability, AVEVA, said: “We are excited to welcome Joanna to AVEVA. She will bolster our mission to enable faster uptake of existing sustainability solutions across the industrial landscape, while in parallel we continue to invest in product capabilities and partnerships that will push out the frontiers of sustainability innovation for industry. At AVEVA we look to lead by example on sustainability and we achieved a 93% reduction in Scope 1 and 2 emissions last year. We aspire to help our customers better leverage digital solutions to realize their own ambitious sustainability targets early, and Joanna brings a wealth of experience to help support this.”

Commenting on her appointment, Joanna Mainguy, Sustainability Accelerator Director, AVEVA, said: “I am delighted to join AVEVA at such a pivotal time in its sustainability innovation and growth trajectory. I look forward to working with AVEVA teams and customers to continue to grow the sustainability benefits that can be achieved with AVEVA software. I am also keen to work closely with our partners to drive further positive change at scale, since we know addressing the climate crisis will continue to require expanded collaboration”.

AVEVA actively embeds sustainability into its core product strategy with specific capabilities in its software portfolio.

AVEVA’s software enables organizations to connect and contextualize key sustainability data with artificial intelligence and human insight, enhancing their agility, resilience and sustainability in order to help drive responsible use of the world’s resources.

AVEVA’s 2023 Sustainability Progress Report reveals significant progress across all three pillars of the company’s sustainability framework, encompassing product strategy, operations and culture.

Energy

Climate Change: NNPC Ltd/Total Energies JV Achieves Zero Gas Flare

Published

3 months ago

February 15, 2024

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In pursuit of meeting the targets of 20% (unconditional) and 47% (conditional) greenhouse gas emission reduction as contained in the Nationally Determined Contribution under the Paris Accord signed by the President Bola Ahmed Tinubu administration, the NNPC Ltd/TotalEnergies Joint Venture has achieved zero routine gas flare in all its assets.

According to a statement signed by Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd., this feat was announced on Thursday during an inspection tour of OML 100 in South-eastern Niger Delta, off Port Harcourt, by a joint NNPC Ltd and TotalEnergies Team to ascertain the success of the OML Flare Reduction Project launched in December 2023.

The NNPC Ltd/TotalEnergies Joint Venture, which is the concession holder of four leases, had hitherto achieved zero routine flaring across OML 99 (2006), OML 102 (2014), and OML 58 (2016), leaving OML 100 as the only lease with routine flaring going on.

The significance of this achievement is that the last routine flare volume of about 12MMscf/d (twelve million standard cubic feet per day) of gas has now been eliminated giving rise to a greenhouse gas emissions reduction of about 341KtCO₂e/yr.

The achievement is an outcome of a programme introduced by the NNPC Ltd to galvanize action towards achieving the zero routine flare by 2030 across its portfolio of assets.

It is also a testament to NNPC Ltd’s prioritization of sustainability anchored on the ‘first R’ of its 5R Strategy (Reduce, Replace, Renew, Re-plant, Repurpose), as it strives to reduce its carbon footprint.

Work is ongoing across all other assets within NNPC Ltd’s Upstream Directorate to ensure that all assets achieve zero routine flaring by 2030 or earlier.

Energy

NNPC Celebrates 14,000bpd Production from Akpo West Field

By SANDRA ANI

Published

3 months ago

February 7, 2024

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In line with President Bola Ahmed Tinubu’s directive to the Nigerian National Petroleum Company Limited (NNPC Ltd) to optimise production from the nation’s oil and gas assets, the Company has announced the successful commencement of oil production from the Akpo West Field.

The milestone, which is the result of meticulous planning, strategic collaboration, and unwavering dedication from all stakeholders involved in the project, will add 14,000 barrels per day condensate to the nation’s production. This will be followed up by the production of about 4million cubic meters of gas per day by 2028.

The development of Akpo West which is on Petroleum Mining Lease (PML) 2 (formerly OML 130) leverages the existing Akpo Floating Production Storage and Offloading (FPSO) facility via a subsea tie-back to keep costs low and minimize greenhouse gas emissions.

The milestone was enabled by the strategic leadership of the Group Chief Executive Officer (GCEO), Mr. Mele Kyari, and the Upstream Directorate of the NNPC Ltd whose support played no small role in propelling the operators to actualise the short- and mid-term hydrocarbon production goal of the President Tinubu administration.

Located 135 kilometres offshore, Akpo West is one of the discoveries on PML 2 with proximity to the Akpo main which started up in 2009 and produced 124,000 barrels of oil equivalent per day in 2023.

PML 2 is operated by TotalEnergies with a 24% interest, in partnership with CNOOC (45%), Sapetro (15%), Prime 130 (16%), and the Nigerian National Petroleum Company Ltd as the concessionaire of the Production Sharing Contract (PSC).