General News
Scary! Get Ready for $10 a Barrel Oil
This is a very bad time for oil dependent country like Nigeria because a scary analysis in Bloomberg by Gary Shilling has predicted a further tumble in oil price,
According to Shilling, at about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107.
They may fall more, perhaps even as low as $10 to $20.
Here’s why.
U.S. economic growth has averaged 2.3 percent a year since the recovery started in mid-2009.
That’s about half the rate you might expect in a rebound from the deepest recession since the 1930s.
Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan.
Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased U.S. production from hydraulic fracking and horizontal drilling.
U.S. output rose by 15 percent in the 12 months through November from a year earlier, based on the latest data, while imports declined 4 percent.
Something else figures in the mix: The eroding power of the OPEC cartel. Like all cartels, the Organization of Petroleum Exporting Countries is designed to ensure stable and above- market crude prices. But those high prices encourage cheating, as cartel members exceed their quotas.
For the cartel to function, its leader — in this case, Saudi Arabia — must accommodate the cheaters by cutting its own output to keep prices from falling. But the Saudis have seen their past cutbacks result in market-share losses.
So the Saudis, backed by other Persian Gulf oil producers with sizable financial resources — Kuwait, Qatar and the United Arab Emirates — embarked on a game of chicken with the cheaters.
On Nov. 27, OPEC said that it wouldn’t cut output, sending oil prices off a cliff. The Saudis figure they can withstand low prices for longer than their financially weaker competitors, who will have to cut production first as pumping becomes uneconomical.
What is the price at which major producers chicken out and slash output? Whatever that price is, it is much lower than the $125 a barrel Venezuela needs to support its mismanaged economy. The same goes for Ecuador, Algeria, Nigeria, Iraq, Iran and Angola.
Saudi Arabia requires a price of more than $90 to fund its budget. But it has $726 billion in foreign currency reserves and is betting it can survive for two years with prices of less than $40 a barrel.
Furthermore, the price when producers chicken out isn’t necessarily the average cost of production, which for 80 percent of new U.S. shale oil production this year will be $50 to $69 a barrel, according to Daniel Yergin of energy consultant IHS Cambridge Energy Research Associates.
Instead, the chicken-out point is the marginal cost of production, or the additional costs after the wells are drilled and the pipes are laid. Another way to think of it: It’s the price at which cash flow for an additional barrel falls to zero.
Last month, Wood Mackenzie, an energy research organization, found that of 2,222 oil fields surveyed worldwide, only 1.6 percent would have negative cash flow at $40 a barrel.
That suggests there won’t be a lot of chickening out at $40. Keep in mind that the marginal cost for efficient U.S. shale-oil producers is about $10 to $20 a barrel in the Permian Basin in Texas and about the same for oil produced in the Persian Gulf.
Also consider the conundrum financially troubled countries such as Russia and Venezuela find themselves in: They desperately need the revenue from oil exports to service foreign debts and fund imports. Yet, the lower the price, the more oil they need to produce and export to earn the same number of dollars, the currency used to price and trade oil.
With new discoveries, stability in parts of the Middle East and increasing drilling efficiency, global oil output will no doubt rise in the next several years, adding to pressure on prices. U.S. crude oil production is forecast to rise by 300,000 barrels a day during the next year from 9.1 million now.
Sure, the drilling rig count is falling, but it’s the inefficient rigs that are being idled, not the horizontal rigs that are the backbone of the fracking industry. Consider also Iraq’s recent deal with the Kurds, meaning that another 550,000 barrels a day will enter the market.
While supply climbs, demand is weakening. OPEC forecasts demand for its oil at a 14-year low of 28.2 million barrels a day in 2017, 600,000 less than its forecast a year ago and down from current output of 30.7 million. It also cut its 2015 demand forecast to a 12-year low of 29.12 million barrels.
Meanwhile, the International Energy Agency reduced its 2015 global demand forecast for the fourth time in 12 months by 230,000 barrels a day to 93.3 million and sees supply exceeding demand this year by 400,000 barrels a day.
Although the 40 percent decline in U.S. gasoline prices since April 2014 has led consumers to buy more gas-guzzling SUVs and pick-up trucks, consumers during the past few years have bought the most efficient blend of cars and trucks ever.
At the same time, slowing growth in China and the shift away from energy-intensive manufactured exports and infrastructure to consumer services is depressing oil demand. China accounted for two-thirds of the growth in demand for oil in the past decade.
So look for more big declines in crude oil and related energy prices.
NLNG and the Nigerian Content Development and Monitoring Board (NCDMB) have commenced the construction of a research and innovation centre at Rivers State University, aimed at strengthening indigenous capacity in computer and electrical engineering.
The NLNG Research and Innovation Centre for Computer and Electrical Engineering (RICCEE), which was inaugurated yesterday, is the company’s largest Human Capital Development Institutional Strengthening project to date.
The centre is expected to provide specialised training, advanced research facilities and technological solutions for challenges in Nigeria’s energy and industrial sectors.
It will also house a professorial chair and operate as a research and development centre where industry-focused solutions, particularly for NLNG, can be developed and potentially commercialised.
Speaking at the groundbreaking ceremony, NLNG’s Managing Director and Chief Executive Officer, Adeleye Falade, described the project as a strategic investment in the country’s future and evidence of the company’s commitment to sustainable human capital development.
Falade, who was represented by NLNG’s General Manager, External Relations and Sustainable Development, Sophia Horsfall, said the facility would improve the university’s ability to produce highly skilled professionals while ensuring that research responds to industry needs.
He said the centre would also help bridge the gap between academic knowledge and practical industry requirements by creating opportunities for researchers and professionals to work together on innovations with commercial and developmental value.
Felix Omatsola Ogbe, the Executive Secretary of NCDMB, represented by the Director, Capacity Building, Abayomi Bamidele, said the project marked an important step in advancing the Board’s Human Capital Development objectives.
According to him, the centre is part of the Board’s Institutional Strengthening Programme, which seeks to build lasting partnerships with higher institutions through infrastructure that supports teaching, research, innovation and practical skills development.
Ogbe challenged the centre to emerge as a hub for discovery, creativity and technological advancement, where students can develop innovative ideas, researchers tackle real-world problems and industry can find reliable research and development partners.
The Vice-Chancellor of Rivers State University, Prof. Isaac Zeb-Obipi, said the project aligned with the institution’s 2026–2030 strategic plan, particularly its focus on research collaboration, innovation and entrepreneurship.
“We envisage the Centre as a world-class hub where researchers and students can develop practical solutions to engineering and technological challenges, where university-industry collaboration can flourish, and where innovative ideas can be transformed into useful products, technologies and services,” he said.
The centre will occupy about 9,336 square metres within the university and include specialised laboratories for electronics and signal processing, robotics and embedded systems, software engineering, and digital forensics and cybersecurity.
The facility will also feature solar energy provisions, energy-efficient lighting and other environmentally responsible systems designed to reduce operating costs and support reliable research activities.
RICCEE is one of NCDMB’s Institutional Strengthening Projects designed to improve learning institutions through modern infrastructure, research facilities, technical equipment and training aligned with industry needs.
General News
NITDA Seals Strategic Deals with Goose FL and Fireflies AI to Power $1 Trillion Digital Economy Vision
In a significant step toward expanding Nigeria’s tech footprint on the global stage, the National Information Technology Development Agency (NITDA) has signed strategic Memoranda of Understanding (MoUs) with Canadian tech companies Goose FL and Fireflies AI.
The signings took place during the Nigeria–Canada Investment Forum and the Nigeria Investment Economic Conference in Toronto, Canada, witnessed by NITDA’s Director-General, Kashifu Inuwa Abdullahi.
The strategic partnership centers on three core pillars designed to accelerate the nation’s digital roadmap:
- Expanding Financial Inclusion: Developing innovative technology solutions to broaden access to digital financial services and create sustainable economic opportunities for underserved communities.
- Deploying Local AI Infrastructure: Establishing indigenous Artificial Intelligence infrastructure and services to strengthen Nigeria’s internal capacity to build, manage, and benefit from AI technologies locally.
- Building a Stronger Digital Economy: Driving long-term economic growth through strategic global partnerships, technology transfer, innovation, and digital capacity development.
This international collaboration directly aligns with President Bola Ahmed Tinubu’s vision to grow Nigeria into a $1 trillion economy by 2030, anchored by innovation, digital technology, and human capital development.
By forging key global ties, NITDA continues to position Nigeria as a rising leader in the digital economy, ensuring that emerging tools like AI deliver real, tangible value for local citizens and businesses.
Anambra State Government says it is exploring partnerships with the Federal Government and other stakeholders to extend digital connectivity to underserved rural communities across the state.
The Managing Director and Chief Executive Officer of the Anambra State ICT Agency, Mr Chukwuemeka Fred Agbata, disclosed this during a virtual media engagement with journalists on Thursday.
Agbata said rural connectivity remained a major challenge because telecommunications operators were often reluctant to invest heavily in communities where network deployment might not be commercially viable.
He said the state was willing to explore opportunities to leverage Federal Government infrastructure and the Universal Service Provision Fund (USPF) to extend connectivity to underserved communities.
“We understand what digital inclusion means because we are dealing directly with these communities,” Agbata said.
According to him, the objective is to ensure that rural residents are not excluded from the benefits of digital government and the wider digital economy simply because of where they live.
Agbata said the effort formed part of the state’s broader digital transformation agenda, which is targeting deeper digitalisation of government services and a more digitally enabled business environment by 2030.
He said the second phase of the agency’s digital transformation agenda would focus on e-governance, digital infrastructure, smart government and the use of emerging technologies to drive development.
“My core vision is that we would have digitised every single government entity in Anambra State,” he said.
The ICT boss said the digital transformation agenda would extend beyond government ministries, departments and agencies (MDAs) to businesses and residents across the state.
He said the agency was already developing websites for government MDAs and transforming them from mere information platforms into channels for delivering government services.
“We are building websites for all the MDAs. We are also automating them to be able to carry out services and give government support and government services through their websites,” he said.
Agbata said the initiative would reduce the need for citizens to physically visit government offices to access basic services.
He said the Smart Anambra platform had already demonstrated growing demand for remote access to government services.
According to him, the platform recorded about 14,000 visits between July 9 and July 29, averaging approximately 700 visits daily, despite limited publicity.
He said the data indicated that residents were interested in accessing government services online, including applications, permits and identification-related processes.
“What the data is already showing us is that we really need to build a system that allows people to actually get government services remotely,” Agbata said.
He explained that the objective was to allow residents to initiate processes online, complete forms remotely and only visit government offices where physical presence was eventually required.
This, he said, would reduce the time and cost citizens spend travelling to Awka or other government offices to access services.
Agbata said services in areas including hospitals, schools and other government processes were being connected to Smart Anambra.
Anambra Targets 2030 for Digital Government
Agbata said the state’s 2030 target was to deepen the digitalisation of government services and create an environment where businesses could increasingly operate within the formal digital economy.
He said the agency was working with the Ministry of Commerce to promote the formalisation of businesses, particularly SMEs and businesses operating in major markets.
“One of the biggest challenges that we have is that SMEs are not formalised enough,” he said, adding that the agency was exploring partnerships to address the challenge.
The ICT agency boss said the transformation would be gradual because major government initiatives required the necessary approvals and resources.
On the possibility of making Anambra completely paperless, Agbata disclosed that the State Executive Council was already operating a paperless system.
He, however, said the entire civil service might continue to operate a combination of digital and paper-based processes for some time because of the complexity of government operations.
“What might happen is a dual situation,” he said, adding that selected MDAs could be used as pilots for deeper digital transformation.
Agbata also disclosed that the Anambra State ICT Agency had commenced the deployment of a locally trained artificial intelligence (AI) system to automate its operations and explore applications in governance, revenue management and public-sector productivity.
He explained that the agency did not develop a frontier large language model from scratch because of the huge computing and financial resources required.
Instead, he said, it adopted an open-source model, modified it and was training it for specific local use cases.
“We have started doing our own local AI system. It is an open-source system, so we didn’t build our own frontier model. We basically looked at open source and modified it, and we are training it,” Agbata said.
He said the system had already been deployed to automate the agency’s operations end-to-end.
“We have used it to automate our agency end-to-end. Everything that we do now is currently automated,” he said.
Agbata said the agency was exploring how the model could be applied across other areas of government to improve productivity, address revenue leakages and strengthen governance.
He said the AI initiative formed a major part of what he described as the agency’s “2.0” phase following his reappointment by Gov. Chukwuma Soludo.
According to him, the second phase would build on achievements in infrastructure, capacity development, e-governance and smart government while placing greater emphasis on AI and emerging technologies.
Agbata also said the state’s free public Wi-Fi initiative remained operational, stressing that the programme was introduced before the electioneering period.
“The free Wi-Fi didn’t start as a political thing, a campaign thing. It started way before the campaigns,” he said.
He explained that the strategy was adjusted during the campaigns to enable residents to follow the governor’s activities and participate in live engagements while on the move.
According to him, existing Wi-Fi locations, including facilities at the state Secretariat, remain operational, although occasional downtime occurs, particularly during periods of adverse weather.
“There are downtimes now and then because with the rains and all of that, these things have their uptime and their downtimes, but it is still very much available,” he said.
He disclosed that there were currently no plans to establish additional Wi-Fi locations, noting that existing sites were still providing services.
Agbata said the state would continue to develop digital skills and education programmes, including Smart Schools and other capacity-development initiatives.
He also called for stronger collaboration among government, technology companies, telecommunications operators, local technology manufacturers and other stakeholders to accelerate the state’s digital transformation.
He cited the procurement of about 2,000 computers supplied by indigenous technology company, Zinox, as an example of the state’s engagement with local technology providers.
Agbata said the agency would remain open to partnerships capable of supporting Anambra’s technology agenda.
He said the ultimate objective was to build an Anambra where residents and businesses could increasingly interact with government digitally, while technology becomes a central driver of economic development across the state.
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