Peter Thiel, savvy United States Silicon Valley investor, judges the situation in his country as “urgent”. For Thiel, the future depends on solving tough questions. To assuage his conscience, he voted Donald Trump. Indeed for both EnergyNewsTM and Nigeria, finding solutions to tough questions is the goal. There is an urgent need to apply logical and empirical reasoning to solve these questions, especially those that relate to our economy.
As reported in EnergyNewsTM updates Issue 115, the Federal Government (FG) announced through the Nigerian National Petroleum Corporation (NNPC) that there are No Plans to Increase Petrol Prices. The concern came up because of the difficulty oil marketers are having in sourcing foreign exchange to import refined products.
At first glance the stories in EnergyNewsTM, EBook 18 is a compendium of stories that form the bedrock for industry and economic independence. For instance, when crude oil prices rose above $45 a barrel on August 10th, 2016, Nigeria also had to contend with the destructive effects of the activities of the Niger Delta militants, as well as the resolution of Right of Way issues to enhance transmission capacity by the Niger Delta Power Holding Company along the Itu-Calabar axis .
Then came the paradoxical story, ‘Kerosene Prices? Nigerians Return to Charcoal and Firewood’ The intense scarcity of Kerosene resulted in about a 100 per cent increase in its price, despite the liberalization in the petroleum products market. Many marketers simply refused to join the Nigerian National Petroleum Corporation in the import of kerosene as they mostly continued to focus on petrol.
On the other hand, Nigeria sent warning signals to international oil companies to stop treating the country like a “trading colony” and demanded that they invest in its energy sector if they want to retain access to its resources. In ‘Nigeria: No Longer A ‘Trading Colony’, minister of state for petroleum Emmanuel Ibe Kachikwu, said that some of the world’s biggest independent oil traders had benefited for years from exporting Nigeria’s crude and selling back refined petroleum products without putting money into the development of the industry.
Interesting times indeed as ‘OPEC Approves Breakthrough Deal, Cuts Oil Production.’ Rising from its 171st meeting held at Organization of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Wednesday November 30, OPEC reached a landmark deal that will effectively cut oil production by about 1.2 million barrels per day, or about 4.5 percent of current production, to 32.5 million barrels per day. This will be the first time since 2008, that OPEC would be accomplishing such a feat that is expected to tackle the key challenge of low oil prices in the international market.
In ‘Shell (sought) to block Nigerian case from being heard’; find out why on November 22, at a hearing at a High Court in London, a judge was urged to rule that the court does not have jurisdiction to try actions by two Nigerian communities over oil spills in the Niger Delta.
Welcome to our cover story. A story of how the mindset of Nigerian businesses will work in a ‘regular’ situation. EnergyNewsTM, seeks to draw parallels between Peter Thiel’s projections for his country and those of third world business moguls. We have attempted to x-ray their thought processes on recent calls in ‘NLNG: Enter the Dragons: Why the National assembly must apply the brakes on moves to amend the NLNG Act.’ Nigerians have raised concerns over alleged surreptitious moves by the National Assembly to repeal the Nigeria Liquefied Natural Gas Limited Act, which took more than 30 years to come into fruition. The NLNG is part owned by the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation (49 per cent); with Shell Gas BV (25.6 per cent); Total LNG Nigeria Limited (15 per cent); and Eni International (10.4 per cent) as the other shareholders who together own 51% equity.
The NLNG Act has been pivotal to the commencement of the gas company from which Nigeria had raked in over $33bn from its initial investment of $2.5bn. The Act enabled the company to grow from its original two trains to six trains, creating an asset base of $19bn, 49 per cent of which the Federal Government owns. The Central Bank of Nigeria governor, Godwin Emefiele, was the first official to propose the disposal of part of government equity holdings in some national assets to raise about $10 billion funding for infrastructure development.
Bottom-line. What to do with the goose that lays the golden eggs? To Sell or not to Sell? That is the question that begs for answers. It is a trite story. It is also a bid to understand the thought processes of quintessential public servants, politicians and investors. A call to critical thinking. Please read and enjoy. Then again. Happy holidays.
The Monthly EnergyNewsTM E-publication is available for download