- Nigeria’s crude oil production up by 5.5% m/m to 1.419 mb/d in May
After operating in Nigeria since 1950 and enduring a torrid economic climate on the back of President Bola Tinubu’s administration, Guinness has announced it will exit the Nigerian market and sell off its controlling shares to Singaporean conglomerate Tolaram Group on Tuesday.
The brewery brand recorded a staggering N61.9 billion loss after tax between July 2023 and March 2024, just a few months after President Tinubu floated the naira in an effort to unify the currency’s value on the official and parallel foreign exchange markets.
But the move backfired and caused many multinational companies to suffer huge financial setbacks including Guinness Nigeria whose N61.7 billion loss after tax in Q3 was a 1000 per cent increase from the N5.9 billion revenue generated in the same period last year.
The loss exacerbated by the naira’s continued downward trend may have informed Diageo, Guinness’ parent company, to sell its 58.02 per cent majority stake to the Singaporean group.
“Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands,” the company said in a statement Tuesday.
Guinness Nigeria Plc, a public limited liability company quoted on the Nigerian Stock Exchange, was incorporated on April 29, 1950, as a trading company importing Guinness Stout from Dublin.
The Guinness brand has operated in Nigeria since 1950, but with Tolaram’s controlling stake acquisition expected to conclude by 2025, the global brewery brand will have spent 75 years in Nigeria.
In the statement, Guinness said the firm would leave Nigeria next year and hand over to a third-party venture. “The transaction is expected to be completed during fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria,” said the statement signed by Guinness’s legal director, Abidemi Ademola.
Diageo, however, stated that the sale of its Nigerian brand would not in any way affect its ownership of the Guinness global brand.
Diageo “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term,” the company said.
Diageo’s exit adds to a long list of other multinational companies, like GlaxoSmithKline and Microsoft, which have left Nigeria in the last one to two years, citing the harsh economic climate as making business unprofitable. Some of Diageo’s popular brands in Nigeria include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
Nigeria’s crude oil production up by 5.5% m/m to 1.419 mb/d in May
Meanwhile, Nigeria’s crude oil production in the month of May grew by 5.5 percent to 1.419 million barrels per day (mb/d) in May 2024 according to the Organisation of Petroleum Exporting Country monthly report released on Tuesday.
According to OPEC, data gathered from secondary sources shows that Nigeria’s crude production rose from 1.345mb/d in April to 1.419 mb/d in June, the highest since January.
Other African countries such as Gabon and Equatorial Guinea equally reported increased crude oil production while others like Libya and Congo recorded decreases during the period.
According to secondary sources, total OPEC-12 crude oil production averaged 26.63 mb/d in May 2024, 29 tb/d higher, m-o-m. Crude oil output increased mainly in Nigeria, Gabon and Equatorial Guinea, while production in Saudi Arabia, Kuwait, Libya and Congo decreased.
The report further disclosed that Nigeria’s crude production was lowest in 2022 with the average production rate of 1.210 mb/d, but the figures rose to 1.314mb/d in 2023, with average production in third quarter (Q3) 2023 at 1.381 mb/d and 1.414 mb/d in Q4, 2023.
OPEC stated that official reports from Nigeria indicate that crude oil production in Nigeria decreased by 2.34 percent in May as the data presented show a decline from 1.281 mb/d reported in April to 1.251 mb/d in May 2024.
Nigeria had set a target of 1.7 mb/d as its crude production benchmark for the 2024 financial year.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri has in recent time assured that the country is set to meet the target.
His Special Adviser on Media and Communication, Nneamaka Okafor in a statement said the country can boost crude oil production to 2 mbd.
Expressing his boss’s commitment to meeting the target, Okafor called for the support of industry stakeholders in achieving the mandate, stressing that, “The success of the upstream sector will determine the success of the midstream and downstream
“As a government, we are willing to sustain that engagement with the stakeholders so that in 2024, and beyond, we produce not just 1.7 mb/d that we need for our budget but ensure that we produce what is needed to meet the local demand.”
On his part, Group Chief Executive Officer of Nigerian National Petroleum Company Limited, Mele Kyari has disclosed late last month the country’s crude oil production has increased to 1.7 mb/d.
Kyari, who stated this while addressing members of the Nigerian Association of Petroleum Explorationist in Lagos, confirmed the potential to produce 2 mb/d in the not too distant future.
He blamed the country’s declined production on crude oil theft and pipeline vandalism in the Niger Delta region pointing out that the government is working hard to overcome the challenges.
“The good news is, there is substantial work that is being done by the government and I’m not going to speak about it. But I know that this will come to pass. It’s already subsiding. We are already seeing the results.
“As of today’s data, we are inching to 1.7 mbpd. Should we celebrate this? No, and I can tell you why. On April 17, 2024, our production, without doing anything, without drilling new wells, shot up to 2.2 mbpd,” he said
The latest OPEC report appears to confirm the optimism expressed by both the minister and Kyari as it concerns Nigeria’s crude oil production.
However, the current volume is still less than the projection made for the year by the Federal Government.
