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Oil price rises to $82 a barrel amid fears of global recession

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Oil prices rose on Friday to $82 a barrel amid fears of a global recession.

Brent crude, the global oil benchmark, climbed 1.29 percent to $82.64 a barrel at 19:30 GMT+1, while US West Texas Intermediate (WTI) crude rose 1.16 percent to $76.60 a barrel.

In January, World Bank had warned that given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions — could push the global economy into recession.

So far, the price of the commodity has remained below $100 a barrel in the year.

Bolade Agboola, oil and gas sector analyst at Meristem Securities Limited, told TheCable that the price of the commodity is expected to remain at its current level.

“We are not expecting any drastic upsurge in the near term and even if there would be, neither do we expect crude oil price to cross 100/bbl at any time this year,” she said.

“This is hinged on the expectation of a tight gap between global demand and supply.

“In addition, fears of recession in the global economy are expected to exert pressure on oil demand growth which might keep the price in check.”

The recent oil price is 9 percent above the benchmark in Nigeria’s 2023 budget.

Agboola said the current price presents an opportunity for Nigeria to finance the 2023 budget “as it is above the assumed price of $75/bbl in the 2023 FGN budget”.

However, she said the risk to this opportunity is not being able to attain or surpass the set production volumes for the country.

“In summary, oil prices hovering around $80/bbl would be beneficial if it is supported by higher production volumes,” Agboola said.

So far, Nigeria’s oil production figure has increased steadily from January 2023 to February 2023 (from 1.25 million barrels of oil per day to 1.30 million bpd).

But despite the rise in oil output, the country failed to meet its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8 million bpd.

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Nationwide blackout as national grid collapses ninth time in 2024

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The national grid has collapsed for the ninth time in 2024, leading to a total blackout nationwide.

Data obtained from the Nigerian system operator’s portal showed that the grid recorded zero megawatts (MW) as of 2:09pm on Tuesday.

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FG terminates Julius Berger’s Abuja-Kaduna road contract

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The federal government has terminated the contract for the rehabilitation of the Abuja-Kaduna road by Julius Berger, a construction company.

In a statement on Monday, Mohammed Ahmed, director of press at the ministry of works, said the termination was based on non-compliance with the reviewed cost, scope and terms, stoppage of work and refusal to remobilise to the site as directed by the ministry.

The contract covers section one of the Abuja-Kaduna-Zaria-Kano dual carriageway.

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According to Ahmed, negotiations had been ongoing for several months without any significant progress.

“It is a sad commentary on the company that rather than accepting the offer, they tinkered with the Bills of Quantities, as well as that of Engineering Measurements and Evaluation via a letter to the Ministry dated 29th October, 2024,” Ahmed said.

“The company was summoned for a meeting with the Management of the Ministry, today, 4th November, 2024 but refused to show up, hence the termination of the contract based on effluxion of time and non-performance.

“Based on non-compliance with reviewed cost, scope and terms, stoppage of work and refusal to remobilise to site, as directed, the Federal Ministry of Works has issued a 14-day Notice of Termination to Messrs Julius Berger (Nig.) Plc for the Rehabilitation of Abuja-Kaduna-Zaria-Kano Dual Carriageway in FCT, Kaduna and Kano States, Contract No.6350, Section I (Abuja-Kaduna), today, 4th November, 2024.

“Nigerians may wish to know that the contract for the Rehabilitation of the Abuja-Kaduna-Zaria-Kano Dual Carriageway, which was divided into three (3) Sections was awarded to the company on 20th December, 2017 and flagged off by the then Minister of Power, Works and Housing, H:E. Babatunde Raji Fashola at an initial sum of N155.7bn on 18th June, 2018.

“Sections II (Kaduna – Zaria) and III (Zaria – Kano) were partially completed and handed over during the twilight of the administration of former President Muhammadu Buhari, GCFR. Since then it has been one variation and augmentation or the other and finally, the present Minister of Works directed for the redesigning and re-scoping of the Section I of the contract.

“The alignment was divided into two with one phase redesigned to be on continuously reinforced concrete pavement (CRCP), while the remaining with asphaltic pavement. Approval for the Section I, Phase 1 for a length of 38 (thirty-eight) kilometres on concrete pavement was given to Messrs Dangote Industries (Nig.) Ltd, while the remaining 127 (one hundred and twenty-seven) kilometres remained with the substantive contractor. The Phase 1 was flagged off on 17th October, 2024 with a 14-month completion period.”

‘CONTRACT TERMS WERE NOT AGREED UPON’

The director said a request to rescope the project was approved by the federal executive council (FEC), but the contractor did not agree upon the contract’s terms.

“Due to the stalemate of the contract and, most importantly, the desire of His Excellency, President Bola Ahmed Tinubu, GCFR, as encapsulated in the Renewed Hope Agenda infrastructure initiative, to see to the completion of this laudable project, also to alleviate the sufferings of Nigerians plying the road, the ministry re-scoped it and got the approval of the Federal Executive Council (FEC),” he said.

“The award for the re-scoping and downward review of contract for the rehabilitation of Abuja-Kaduna-Zaria-Kano Dual Carriageway in FCT, Kaduna and Kano States, Contract No.6350, Section I (Abuja-Kaduna) in favour of Messrs Julius Berger (Nig.) Plc from the sum of N797.2bn to N740.7bn was granted by FEC on 23rd September, 2024 and conveyed to the company on 3rd October, 2024.

“As due to the socio-economic importance the road as a vital artery connecting Abuja, the FCT to the North, the Ministry conveyed the approval for a Final Offer on the Abuja – Kaduna Dual Carriageway to the company on 23rd October, 2024, stating that it should agree, in writing, to accept the reviewed contract sum of N740.7bn within seven (7) days or risk the termination of the said contract.”

On September 23, Dave Umahi, minister of works, said the Abuja-Kano road project handled by Julius Berger received approval for N740 billion.

Umahi said the project, which was initially valued at N155 billion, was revised to N797 billion by the previous administration and further increased to N1.5 trillion.

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Air Peace Abuja-bound flight turns back mid-air over ‘technical snag’

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Air Peace, a Nigerian airline, says its flight heading to Abuja from Benin could not continue the trip due to a technical snag the aircraft encountered shortly after takeoff.

In a notice on Monday, Ejike Nduilo, head of corporate communications, said the 12:50pm flight returned to Benin due to necessary safety measures.

He said passengers disembarked normally after the aircraft landed in Benin.

The airline spokesperson also said an alternative aircraft was made available to avoid disruptions.

“Our maintenance team are currently troubleshooting the cause of the snag,” Nduilo said.

“We are deploying replacement aircraft to Benin for us to minimise the disruptions and ensure passengers continue their journeys as soon as possible.

“We appeal for understanding of the passengers affected and others whose flights will be delayed as a result of this unforeseen development.”

Air Peace said it remained committed to upholding safety standards.

On May 30, Air Peace discontinued one of its foreign trips due to a low-pressure tyre.

The aircraft which was in Abidjan, Ivory Coast, disrupted flights bound for Gambia and Senegal.

On April 25, Air Peace said its Port Harcourt-Lagos flight landed at the destination airport earlier than scheduled, following a presumed fire incident on the aircraft.

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