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Nigeria and Angola responsible for almost half of OPEC+ oil supply gap – Analysis

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2 years ago

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LONDON/LAGOS (Reuters) – Almost half the shortfall in planned oil supply by OPEC and its allies is down to Nigeria and Angola, data seen by Reuters shows, reflecting a number of factors including moves by Western oil majors away from African projects.

OPEC and its allies, known as OPEC+, pumped 1.45 million barrels per day (bpd) – equal to 1.5% of world supply – below its target in March, the OPEC+ figures seen by Reuters show.

According to the figures, Angola was responsible for almost 300,000 bpd of the OPEC+ supply shortfall while Nigeria was pumping almost 400,000 bpd below target. The war in Ukraine has also hit Russia’s oil trading and its output was about 300,000 bpd short of its March supply target.

The OPEC+ shortfall is one of the reasons global oil prices hit a 14-year high in March above $139 a barrel and it has prompted calls by the United States and other consumers for producers to pump more.

The Organization of the Petroleum Exporting Countries, however, has repeatedly rebuffed the calls – and one contributing factor is simply that some of its members don’t have oil available to pump.

In OPEC’s view, investment cuts after oil prices collapsed in 2015-2016 due to oversupply, along with a growing focus by investors on economic, social and governance (ESG) issues, have led to a shortfall in the spending needed to meet demand.

“There was massive underinvestment in the industry over the years, further complicated by the effect of ESG,” OPEC Secretary General Mohammad Barkindo told Reuters.

“There was a contraction of 25% in 2015 and 2016 – unprecedented. There was no significant recovery before 2020, when we registered a 30% contraction in investments in the industry,” he said.

Figures from the International Energy Agency (IEA) show there was no significant increase in investment in global oil and gas exploration and production during 2017-2019 – followed by a 32% plunge in 2020.

International oil companies are gradually pulling out of Nigeria’s onshore oil production, although they continue to invest in its vast offshore oil and gas resources, where costs remain competitive.

Shell, which helped transform Nigeria into a leading producer since the 1930s, did not immediately respond to a request for comment about investment and the reasons for the decline in Nigerian output.

GULF PRODUCERS BOOST INVESTMENT

OPEC’s Gulf producers led by Saudi Arabia are largely meeting their OPEC+ targets, and OPEC sources say their relative lack of dependence on outside investors has helped.

“The investment shortfall affected more the countries where reliance on foreign investment is more prominent,” an OPEC+ source from a Gulf producer said.

IEA figures show that in 2019, final investment decisions (FIDs) affecting over eight times more crude reserves in the Middle East were taken than those affecting African reserves.

Middle East approvals were also consistently higher from 2011 through 2018.

“Saudi Arabia, the United Arab Emirates and Kuwait are increasing investment and that to some extent can help offset declines elsewhere,” said Audun Martinsen, analyst at Rystad Energy.

“It also highlights why OPEC is not intervening more because it is quite hard for OPEC to increase production overnight,” Martinsen said.

Angolan state oil company Sonangol and Nigeria’s state oil firm NNPC did not immediately respond to Reuters requests for comment on their production decline or the reasons for it.

According to a 2021 report from the Arab Petroleum Investments Corporation or APICORP, Middle East and North African producers were still expected to boost energy investment to $805 billion in 2021-2025 – up $13 billion on the previous year’s five-year outlook, despite the impact of the pandemic.

In February, Saudi Arabia-based APICORP said it expected rising oil and gas prices to further support energy investment in the region.

TOO MUCH RISK

While Western majors are increasingly focusing on the energy transition and selling oil assets, they remain big producers in Africa. Big Western companies are responsible for 40% of output in Nigeria and 60% in Angola, according to Rystad.

Rystad sees some potential for new investment in Nigeria and Angola but projects remain “too expensive” for the majors.

“Since 2015 the majors have been focusing on cost and developing things in Africa has been too much of a risk with cost overruns,” Rystad’s Martinsen said. “It’s not really part of their key focus any longer.”

Angolan production has fallen 50% since 2015 and output is down by about 30% over the same period in Nigeria, he said. In Nigeria production is expected to grow slightly by 200,000 bpd in the coming years, but then decline again after 2024.

Shell said last month that oil spills arising from pipeline tapping in the Niger Delta doubled in 2021 to the highest since 2016.

Underlining the extent of the decline, exports of key Nigerian crude grade Bonny Light have fallen to just two or three cargoes a month from about eight or nine previously as a result of escalating oil theft.

(Reporting by Alex Lawler, Julia Payne, Ron Bousso, Ahmad Ghaddar and Maha El Dahan. Additional reporting by Noah Browning; Graphics by Alex Lawler and Ahmad Ghaddar; Editing by David Clarke)

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Businessman sentenced in $180m bank fraud that paid for lavish lifestyle, classic cars

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4 weeks ago

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November 4, 2023

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CLEVELAND (AP) — A businessman who orchestrated a $180 million check-kiting scheme and used the proceeds to live a lavish lifestyle and amass one of the world’s most revered classic car collections has been sentenced to more than eight years in prison.

Najeeb Khan, 70, of Edwardsburg, Michigan, told a federal judge Thursday that he was “blinded by greed” to carry out the scheme and buy more than 250 cars, as well as airplanes, boats and a helicopter, according to Cleveland.com. Besides receiving a 97-month sentence, he must pay $121 million in restitution to Cleveland-based KeyBank, $27 million to clients and $9.8 million in back taxes.

Authorities have said Khan carried out the fraud from 2011-2019 while growing his payroll processing business in Elkhart, Indiana. He funneled dozens, sometimes hundreds, of checks and wire transfers with insufficient funds through three banks, artificially inflating the amount in his accounts. He siphoned off about $73 million for himself.

He used the money to fund a lavish lifestyle that included expensive vacations, mansions in Arizona and Michigan and properties in Florida and Montana, as well as planes and yachts. His massive car collection included pristine vintage Ferraris, Fiats and Jaguars.

Khan had plead guilty to bank fraud and attempted tax evasion. His attorneys said he had helped his victims recover some funds, in part by selling off his car collection that fetched about $40 million at auction.

Prosecutors said that when Khan’s scheme collapsed, about 1,700 of his clients lost out on money Khan’s company had withdrawn for payroll taxes. Those companies included small- and mid-sized businesses, nonprofits and charities, including the Boy Scouts of America and four Catholic dioceses.

Some victims had to pay the IRS or their employees out of their own pockets or take out lines of credit, prosecutors said. Others laid off employees.

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Houston’s Mayor, Sylvester Turner at the FITCC Event – Spectacular Photos

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4 weeks ago

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November 4, 2023

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Houston’s Mayor, Sylvester Turner, attended the Fidelity International Trade & Creative Connect (FITCC) conference where he gave an opening speech emphasizing the significance of hosting such a global event in the fourth-largest city in the United States. October 24-25, Fidelity Bank Plc. Nigeria premiered this international trade and creative fair attracting the brightest minds and industry leaders to explore the ever-evolving landscape of international trade, exports, and creative connections.

Houston’s Mayor, Sylvester Turner is being introduced to Mustafa Chike-Obi, Chairman of Fidelity Bank Nigeria by event facilitator, Linda Anukwuem.

Houston’s Mayor, Sylvester Turner is being introduced to the President of Afreximbank, Professor Benedict Oramah

To Mayor Turner, this event meant so much to his administrative agenda regarding global commerce. For instance, he just led a three-country trade mission to West Africa. He will out-serve his tenure next month, making this event his last endeavor to strengthen the City’s business ties with Africa.

Houston’s Mayor, Sylvester Turner greets the President of Afreximbank, Professor Benedict Oramah

Houston is designated as a hub for international commerce, known as the energy capital of the world, and a global leader in healthcare, aeronautics, advanced manufacturing, and innovation. Besides having the largest Nigerian population in the country, the city remains the most diverse, with over 2.5 million residents. The city also holds the largest port in the U.S. in foreign tonnage, two international airports, and the largest medical center in the world. In addition, more than 5,000 Houston companies are engaged in international business, and approximately 1,000 Houston firms report foreign ownership.

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Nigeria-based Women Group Excels at Fidelity Bank’s International Trade and Creative Fair Debut in Houston

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1 month ago

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October 26, 2023

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Houston was set agog October 24-25 when the Fidelity Bank Plc. Nigeria unveiled its premier international trade and creative fair in Houston, Texas. The just concluded event called the “Fidelity International Trade & Creative Connect” (FITCC) attracted the brightest minds and industry leaders who swapped ideas, created trade/business partnerships, and navigated the ever-evolving landscape of international trade, exports, and creative connections.

President of AWEAA, Deborah Adebisi Odeleye (Right) and treasurer, Juliet Obi. The AWE program has been rewarded heavily for its role as a U.S. government-funded exchange program in over 100 countries, empowering women entrepreneurs by equipping them with knowledge, networks, and opportunities.

Among a long list of participants, partners, exhibitors, and supporters is the Academy for Women Entrepreneurs Alumnae Association (AWEAA), a Nigerian-based organization with a mission to empower and support women as they embark on their entrepreneurial journeys.

Enriched with inspiring women fellows of the Academy for Women Entrepreneurs program, the AWE directly supports the U.S. National Strategy on Gender Equity and Equality. At a local level, AWE harnesses the power of public-private sponsors and local partnerships to help women and their businesses attain economic growth and prosperity.

Attending the FITCC event thus offers the AWEE the opportunity to explore the global market, galvanize foreign direct investments, and create avenues to expand global outreach. According to the president of the group,

According to the President of AWEAA, Deborah Adebisi Odeleye, “We pretty much knew the importance of this event. That was why we opted for full participation. For instance, we had a booth and brought in the necessary resources to showcase our activities, goals, and potential as a global entity.”

Over 15 members of the AWAEE visited from Nigeria for this event.  Adebisi Odeleye said, “Our presence here is  to gain access to new markets. This is critical in navigating new grounds in building women’s entrepreneurship. For us, the FITCC created the opportunity for networking with fellow entrepreneurs and potential investors, thereby expanding our horizon in accomplishing our organizational mission and objectives.”

AWE program has been rewarded heavily for its role as a U.S. government-funded exchange program in over 100 countries, empowering women entrepreneurs by equipping them with knowledge, networks, and opportunities. “Our program’s alignment with the U.S. National Strategy on Gender Equity and Equality underscores our values in promoting gender equality on a global scale,” Adebisi Odeleye said.

The group’s treasurer, Juliet Obi, who equally was at the FITCC event encouraged women entrepreneurs to step forward in the world of exports and intensify their economic capacity and influence. “Global markets are enthusiastic about African products, and understand the dynamics and logistics of navigating this new territory.”

The FITCC which took place at the George R. Brown (GRB) Convention Center in Houston, presented the opportunity to harness the shared synergy of the Nigerian and US economic possibilities and created a fertile structure for business development. AWAEE supports women in scaling their businesses by providing the essential support, mentorship, and opportunities necessary for expansion.

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