₦airaland Forum

Oil prices keep climbing. May get to $80 per barrel soon. The world must be prepared.

Cardoso wants to bite the bullet once and for all before the recapitalisation exercise comes to an end which is just early next year.

Agbalowomeri:
So up till now nobody knows which banks are affected

GT is the safest from all articles I’ve read. Zenith and Access may not be as safe as GT now but they have significant capacity and can still put their heads above water.

A comprehensive perspective on the forbearance loans and how the banks stand currently by nairametrics.

https://nairametrics.com/2025/06/16/six-nigerian-banks-face-risk-of-lower-profits-dividends-over-end-to-cbn-forbearance/

Omo. Alhaji is ready, he is not here to play at all.

Dangote Grand Controller of Nigeria, crazy feat it's.
Waiting for the steel mills. https://t.co/niG7vAdpLB pic.twitter.com/Nuq04GuEgx

— FelixNotJoao (@felix_olaosegba) June 15, 2025

Raider76:
How? Alhaji is creating 4,000 new jobs for drivers.

Also, using CNG trucks for this is a very smart move.

DANGOTE PETROLEUM REFINERY TO BEGIN DISTRIBUTION OF PMS AND DIESEL NATIONWIDE

...Deploys 4,000 CNG Tankers To Enhance Distribution Network Nationwide

…Offer open to Marketers, Petrol Dealers, Manufacturers, Telecoms Firms, Aviation and other large users

Dangote Petroleum Refinery is pleased to announce the commencement of a significant national initiative designed to transform Nigeria’s fuel distribution landscape. Effective 15th of August 2025, the Refinery will begin the distribution of Premium Motor Spirit (PMS) and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country, with free logistics to boost distribution network.

To ensure smooth take-off of this scheme, Dangote Refinery has invested in the procurement of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers. This phase of the programme will continue over an extended timeframe. The refinery is also investing in Compressed Natural Gas (CNG) stations, commonly referred to as daughter booster stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless product distribution.

This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability and supporting Nigeria’s economic development. It affirms our dedication to improving the availability and affordability of fuel, in support of broader efforts to strengthen the economy and improve the well-being of all Nigerians.

Under this initiative, all petrol stations purchasing PMS and diesel from the Dangote Petroleum Refinery will benefit from this enhanced logistics support. Key sectors such as manufacturing, telecommunications, and others will also gain from this transformative initiative, as reduced fuel costs will contribute to lower production costs, reduced inflation, and foster economic growth. Players in these key sectors and others can purchase directly from the Dangote Petroleum Refinery.

In addition, the refinery will offer a credit facility to those purchasing a minimum of 500,000 litres—allowing them to obtain an additional 500,000 litres on credit for two weeks, under bank guarantee.

This pioneering effort marks a major milestone in our vision to revolutionise Nigeria’s energy sector. Dangote Refinery is dedicated to ensuring that no place is left behind. Our goal is to provide equitable access to affordable fuel for all Nigerians, regardless of location, making energy more accessible and sustainable for everyone, wherever they may be.

It is expected to revitalise previously inactive petrol stations, thereby driving job creation, stimulating small and medium-sized enterprises (SMEs), increasing government revenue, improving fuel access in rural and underserved communities, and strengthening investor confidence in Nigeria’s downstream petroleum sector.

This initiative is inline with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, reflecting our shared commitment to economic progress, stability, and inclusive development. We sincerely thank the Federal Government for its continued support, especially through the Naira-for-Crude scheme, which has helped stabilise fuel supply amid global price volatility. It marks a major revolution in the midstream and downstream sectors and stands as a key example of President Bola Tinubu’s bold and reformative economic policies.

We invite marketers, petrol dealers, manufacturers, telecom companies, and all key stakeholders to embrace this landmark initiative. The registration process, including Know Your Customer (KYC) verification, will take place from 16 June to 15 August, spanning a total of 60 days. For enquiries, please call +234 707 470 2099, +234 707 470 2100, +234 816 961 8390, +234 703 796 8308, +234 812 362 2893. Email: Email: sales.enquiry@dangote.com.

Okay it seems this is the announcement Dangote was talking about last week.

Access Bank with another acquisition. This time in Gambia. I think Access Bank is positioning for something big in Africa.

https://standard.gm/access-bank-takes-over-standard-chartered-bank/

moneymanager:
https://www.thisdaylive.com/2025/06/15/regulatory-forbearance-cbn-directs-first-bank-others-to-suspend-dividend-payments-bonuses/

If First Bank is there then I don’t know who will be exempted.

I was expecting First Bank to be there actually.

ositadima1:
My point is clear: what is shared is the profit after costs, taxes, royalties, and other deductions. And clearly, the profit is not shared on a 50:50 basis contrary to what you claimed. Not even close.

So what is it from your article? How much crude oil profit is our share from our JV partnership and production sharing contracts with the IOC’s both offshore and onshore? You have not countered what I wrote. But we can just kill it here.

ositadima1:
In this era of easy access to information, It took me just a minute to ask Gemini AI a few questions, and it extracted this information. I hope you take the time to read it carefully and understand why your 50% sharing idea doesn't work.

Here's a breakdown of how oil revenue is typically shared in Nigeria:

1. Types of Agreements:
* Joint Ventures (JVs): Historically, these have been the dominant mode of operation. In JVs, the Nigerian National Petroleum Company Limited (NNPCL) (formerly NNPC) holds a majority equity stake (often around 55% or 60%) in the venture with International Oil Companies (IOCs). In this arrangement, both parties contribute to the costs of exploration, development, and production in proportion to their equity share, and then they share the profits accordingly. However, the government's consistent failure to meet its "cash call" obligations (its share of the funding) has led to challenges.
* Production Sharing Contracts (PSCs): These are common in offshore and deepwater operations. In PSCs, the IOC (the contractor) typically bears the initial exploration and development costs and risks. Once oil is discovered and produced, the revenue is shared in a specific order:
* Cost Oil: A portion of the crude oil produced is allocated to the IOC to recover its capital and operating expenditures.
* Royalty: The Nigerian government receives a royalty on the crude oil produced. This is a direct payment for the extraction of the natural resource. The rates for royalties have been adjusted over time, particularly with the Deep Offshore and Inland Basin Production Sharing Contracts Act amendments. For instance, in deep offshore areas, it's now often 10%.
* Tax Oil: A portion is also set aside for the Petroleum Profits Tax (PPT) which is a tax on the profits of the oil companies.
* Profit Oil: The remaining oil after cost recovery, royalties, and tax oil is "profit oil," which is then split between the government (NNPCL) and the IOC in agreed-upon proportions. These proportions can be influenced by factors like oil prices and production rates.


2. What the Percentages Refer To:
When someone mentions percentages, they could be referring to:
* Equity Share in JVs: If they are talking about Joint Ventures, Nigeria's NNPCL typically holds a majority stake (e.g., 60% or 55%), meaning they are entitled to that percentage of the crude oil and are also responsible for a proportional share of the costs.
* Profit Oil Split in PSCs: In PSCs, the 60/40 or similar split would likely refer to the "profit oil" remaining after costs, royalties, and taxes have been accounted for. The exact split for profit oil can vary based on the specific contract and other clauses (like "R-factor" which relates to the ratio of cumulative revenues to cumulative costs).
* Overall Government Take: This encompasses all the ways the government derives revenue from oil, including royalties, petroleum profits tax, NNPCL's share of profit oil (in PSCs) or equity crude (in JVs), and other bonuses.


3. The 40%/60% Scenario:
It's plausible that in some specific Production Sharing Contracts, after cost recovery, royalties, and other deductions, the remaining "profit oil" is split with 60% going to Nigeria and 40% going to the IOC. However, it's crucial to understand that this 60% for Nigeria is not of the total revenue generated by the oil company from sales, but rather a share of the profit oil after various deductions.
Important Considerations:
* Petroleum Industry Act (PIA): The recent Petroleum Industry Act (PIA) aims to reform Nigeria's oil and gas sector, including its fiscal framework. It introduces new royalty rates, taxes, and contractual terms designed to increase government revenue and attract investment. This means the specific percentages and terms of revenue sharing are subject to the provisions of the PIA for new and renegotiated contracts.
* Cost Recovery: A significant point of contention has often been the high costs declared by IOCs, which directly impact the "profit oil" available for sharing. Inflated costs can reduce the government's share of profits.
* Royalties and Taxes: The Nigerian government also earns substantial revenue through royalties and various taxes on oil company profits, which are independent of the direct profit split in some agreements.

In summary, while a 60% to Nigeria and 40% to IOCs split might apply to the "profit oil" in some agreements, it's not a direct split of the total revenue generated by the companies. The actual percentage of revenue that comes to Nigeria is derived from a combination of equity stakes, royalties, taxes, and profit-sharing arrangements, which are complex and subject to specific contract terms and the evolving legal framework.

I really don’t get what your point is. I gave a rough estimate of 50% across both onshore and offshore operations. You can see from your article that there’s nothing fixed and it varies. So when I say we gain only about 50% of the exports, how does your article about our JV agreements disprove this?

You should also know that only in 2025 did both NNPC and indigenous companies increase their share.

But let’s assume we get a remittance of 60% currently in total, how does that give us a surplus that can help the foreign exchange considering that we only had a 5.17 trillion naira trade surplus with the total included?

Total exports ( including about 40% repatriated): approx 20 trillion naira

Crude oil exports : approx 12.5 trillion naira

Trade balance : approx 5 trillion naira

emmaodet:
From the attached pictures, the market cap of nigeria stock market is twice that of total 8 francophone west african countries (ivory coast, mali, burkina faso etc)
So the market cap of companies listed on nigeria stock exchange is twice of theirs and these are the countries people throw shade at nigeria.
Which means there is more companies offering more jobs in nigeria than total combined of these 8 countries.

Even despite the naira depreciation (3.5 times depreciation) in just 2 years.
Not only is our stock market the biggest by market cap in west Africa but also in east and central africa despite having the worst devaluation rate of any African country in the last 2 years.
But we can do more though. South African market cap is over a trillion dollars.

ositadima1:
I don't think it's "nada." You used to spend 1,000 naira on item B, and now you're spending only 200 naira on the same item. Not only that, you're now selling that same item you used to spend money on and earning extra income from it. How exactly is that your "nada"?

The difference is little for now compared to what crude oil exports can give. You can check statisense on twitter to see it. Crude oil exports also declined due to lower prices.
Remember also that debt servicing of our foreign loans are higher now compared to what they were in 2021 and 2022 due to global issues and several other factors.

ositadima1:
What exactly is your argument here? What is a trade surplus? Whether it's crude oil or palm oil, when you earn more than you spend, that’s a surplus. If you earn more than you spend as a country, you require less foreign currency, and as a result, your exchange rate improves.

I don’t understand your roundabout argument.

Because most of this surplus is from crude oil and associated gases. We do not receive all the oil we export rather at least 50% are repatriated immediately. All of it still shows in the surplus but it means nada.

ositadima1:
Can you truly separate the economy from the exchange rate when the exchange rate is a floating one? A floating exchange rate is primarily driven by supply and demand: if a country imports more than it exports, it will require more foreign currency, and vice versa.
If current statistics are accurate, Nigeria has started to experience a trade surplus, mostly due to reduced dependence on imported refined products. This should eventually be reflected in the exchange rate.

The same principle applies to stocks—greater demand drives prices higher, while lower demand pushes prices down. There’s no mystery in that, and I don't see why a floating exchange rates should be any different.

This is not the first time we are having trade surpluses. I think we have always had trade surpluses especially when oil prices are high.

The problem is that 80% of our exports are from oil.

Also, the huge budget deficits we have been having for over a decade took another dimension after COVID. The APC ideology of spending your way out of trouble caused this problem especially after COVID in 2020.

The printing by the CBN was then on another level and we grew by 3.65% in 2021 and then printed even more in 2022 and 2023 (including 3.5 trillion naira printing by BAT in 2023) to help the budget and only 2024 was different. This is the major problem with the naira today

Trade surpluses do not solve this easily except the non crude oil exports which have started rising, rises significantly to offset this or we increase our revenue significantly or we cut spending (which is usually harder for Governments to do).

Sunrisepebble:
What I’m hearing is that GT for sure are clear.

GT, Zenith, and UBA are very strong banks fundamentally. I doubt they have these issues.

KarlTom:
When we add the Petrochemicals and Fertilizer, the effect will enter full swing...

I swear. Some underestimate the benefits of this refinery because they expect it to bring prices down or improve the exchange rate.
I have been saying it that Dangote refinery may not massively boost the exchange rate because of low margins in the refining industry (whether he imports crude or buys in naira from Nigeria) but the chain effect on the economy (especially the petrochemicals), the jobs and energy security it provides and would provide at full capacity is priceless.

Mehn Dangote refinery alone almost single handedly changed the dynamics of our petroleum products exports and imports in 2024/2025. This is a really good one for Nigeria.

https://www.thecable.ng/petroleum-products-import-fell-by-75-5-to-n3-7trn-in-q1-says-nbs/

Payunsin:
How will the market react to Israel striking Iran?

Oil prices are already reacting to just the rumour and signs for now but if it eventually happens, oil prices may shoot to $80 per barrel.

Edit: Oh wait, Isreal is attacking Iran already.

Streetinvestor2:
Na you feel he is losing money from sugar.They pay themselves via many means. Age is beginning to tell on him from direct managerial positions..If na me I for done retire completely to go enjoy my money. Man way no even get official wife with all this wealth and associated stress. Money way you go die leave

Well, since no official wife, my man tried to relax with one of those American baddies, e nor end well as everything just spread all over social media
Na rich people wahala be this. No privacy 🤣.

Streetinvestor2:
This is thr usually stat.Why is it not affecting the value of naira which should be the first place to notice it

Because our exports are still 80% oil and gas of which the NNPC gets only about half of that. So if in a year we get 50 Billion USD from oil exports, what we get would be around 25 Billion USD, the rest are repatriated by the likes of Shell and Chevron to their parent companies. Our exports are not yet diversified so the predominant source of FX is oil which we don’t fully control to some extent.

The value of the naira is also affected by the very high debt servicing (especially foreign) and the budget deficits we have had non stop since 2013.

Deal with China done. Oil prices now clocking $70 per barrel this evening.

SonofElElyonRet:
That's June ending latest.. dangote said fertilizer will be listed first. Meaning we might have both fertilizer and refinery listed this month

Hmm he also said before the end of the year (a tone that doesn’t show indication of urgency). Fingers crossed though. We dey here.

SonofElElyonRet:
Usually when a company lists by introduction, price from first shoots up then falls.. will same scenario play out with dangote oil refinery and fertilizer?

Dangote has applied to list the Dangote petrochemicals.

“Speaking on the impact of Dangote Petrochemicals’ listing, Kwairanga highlighted NGX’s commitment to facilitating growth and investment in Nigeria’s financial markets”.

“Dangote Refinery has already applied for their petrochemical listing, and we are working to ensure their inclusion before the end of the second quarter,” Kwairanga stated.

https://nairametrics.com/2025/06/07/dangote-petrochemicals-listing-on-ngx-to-strengthen-nigerias-stock-market-chairman-kwairanga/

SonofElElyonRet:
The surprise next week obviously isn't listing.. let's wait and see what he's talking about. Perhaps he's going into petroleum products marketing (stations)?

I guess so since he said it’s going to change the downstream sector.
Or perhaps a new deal with NNPC to be their sole supplier again?

Mpeace:
From the video, he intends listing the fertiliser first.
He said the surprise will come next week and it will result in an overhaul of the downstream sector. And that the refinery will come on nse after the fertiliser. Hmmmm.
Make we just dey look sha

Yeah he can list the fertiliser and even the petrochemicals separately.

moneymanager:
Sir, see all the adjectives you used
Comparatively, on the average, seemed, seem that bad.
With all due respect sir, if you will indulge me and not take my response as impertinent, this is a noncommittal tangentially misleading response.

Aight let’s look at loan losses of the FUGAZ for example.

Zenith loan losses

N401 billion in 2023
N594 billion in 2024
N36 billion in Q1 2025

GTCO

N102.8 Billion in 2023
N137 Billion in 2024
N13.4 Billion in Q1 2025

UBA

N154 Billion in 2023
N258.9 Billion in 2024
N11.1 Billion in Q1 2025

First HoldCo

N174.7 Billion in 2023
N371 Billion in 2024
N41.2 Billion in Q1 2025

Access Holdings

N84.4 Billion in 2023
N92.9 Billion in 2024
N70 Billion in Q1 2025

You see that Access Holdings are the only ones having it worse in 2025 compared to 2024 for instance with such a high Q1 data.

(It doesn’t seem any of the quarters in 2023 and 2024 were as low or close to the low of Q1 2025, if any were, present the data and I would admit my methodology is flawed).

We do not know what the numbers for Q1 2023/2024 were for instance and this is why I said we would need data of Q2 as well to see where the trend would likely go.

I am not giving you definite predictions since we don’t have all the data yet, I am only looking at the low Q1 2025 numbers. You can counter me by showing that Q1 2023 and 2024 also had low numbers or that it could be as low in any of the quarters of those years and then spike in another quarter. All of these are possible, but I am only giving you a trend here (dealing with probabilities based on the data we have)

Streetinvestor2:
Then the crash lol.
The market is repricing to our new exchange rate of 1600

The reason I’m not that scared about the crash is because for the NGX this time, it would be nothing close to what it was in 2008 due to the dominance of local investors.

The NGX this time is affected more by policies of the Tinubu Government (take the sudden uptick in livestock for example after the ministry was created) and by results/performance of companies. In 2008, it was largely dominated by foreign investors.

I would still say we need more foreign investors coming in though

I mean if Jonathan could kneel as a president before a certain pastor and Peter obi could cry yes daddy, yes daddy to Bishop Oyedepo, why can’t Soludo consult the gods of his fatherland?

Alhaji says he would announce something very soon but he wants Nigerians to know that the Dangote refinery belongs to them.

Could this be the moment we have been waiting for? The listing of the Dangote refinery? Fingers crossed.