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Shell’s $2.4bn sale of its Nigerian assets has emerged as the largest mergers and acquisitions transaction recorded in Africa for 2024, according to data from DealMakers AFRICA.

The deal, which involves the disposal of onshore oil and gas assets to a consortium of local and international investors, highlights Nigeria’s role in driving M&A activity across the continent. The transaction underscores the continued dominance of the oil and gas sector in Nigeria’s economy while also reflecting growing global interest in transitioning energy portfolios.

“Of the top 10 deals by value recorded by DealMakers AFRICA so far this year, the disposal by Shell of its assets in Nigeria to a consortium tops the table at US$2.4bn.”

Shell’s decision to divest aligns with its long-term strategy of focusing on cleaner energy sources and reducing exposure to onshore oil risks, including operational challenges and environmental concerns. This move comes as Nigeria continues to attract investor interest, with 48 recorded M&A deals positioning the country as the leader in West Africa and second only to Egypt on the continent.

The Central Bank of Nigeria has attributed the significant decline in oil revenue for the third quarter of 2024 to ageing pipeline infrastructure and operational inefficiencies.

According to the apex bank’s latest economic report for the third quarter of 2024, oil revenue fell by 24.72 per cent to N1.30tn compared to the second quarter of 2024.

This drop was largely due to lower receipts from petroleum profit tax and royalties.

Also, the revenue figure fell short of the quarterly target by 75.39 per cent, primarily due to frequent shut-ins caused by deteriorating pipelines and installations.

The report read, “Oil revenue, however, fell by 24.72 per cent to N1.30tn, relative to the level in Q2 2024 on account of lower receipts from petroleum profit tax and royalties.

“It was also 75.39 per cent short of the quarterly target due to shut-ins, arising from ageing oil pipelines and installations.”

It also noted that despite a modest increase in crude oil production to 1.33 million barrels per day from 1.27 mbpd in the preceding quarter, challenges including theft, vandalism, and infrastructure deficits severely hampered Nigeria’s oil revenue performance.

The ageing infrastructure not only reduced efficiency but also undermined the country’s ability to meet its OPEC production quota.

The report noted that global factors further compounded the situation, as the average spot price of Nigeria’s Bonny Light crude fell by 5.45 per cent to $82.23 per barrel during the quarter, reflecting subdued demand in the global market.

Similar declines were observed in other crude benchmarks, including Brent and the OPEC Reference Basket.

While the oil sector struggled, the Nigerian economy recorded growth of 3.46 per cent in Q3 2024, up from 3.19 per cent in the second quarter, driven largely by the non-oil sector, which contributed 3.18 percentage points to total GDP growth.

The oil sector’s growth slowed to 5.17 per cent year-on-year, compared to 10.15 per cent in the previous quarter, as operational inefficiencies and declining crude oil prices took a toll.

The fiscal implications were significant, with federally collected revenue falling 23.71 per cent short of the budget benchmark, despite a 7.48 per cent quarter-on-quarter increase.

The fiscal deficit, although narrowing by 22.51 per cent compared to the previous quarter, widened by 43.88 per cent relative to the quarterly target, reflecting ongoing fiscal pressures.

The report concluded that Nigeria’s goal of achieving an oil production target of 2mbpd by the end of 2024 remains under threat due to these challenges.

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The gypsum plaster market in Nigeria will become more competitive with the introduction of products from BUA Gypsum Plaster Limited.

Gypsum plaster, also known as Plaster of Paris (POP) or POP cement, is an essential ingredient in the production of suspended ceilings and other structures in the construction industry.

At the moment, the local market is saturated with products from outside the country, particularly from Egypt. Because of the exchange rate crisis in Nigeria, the price of a 40kg bag averages between N10,500 and N11,000.

BUA Gypsum Plaster, a subsidiary of BUA Group, is flooding the market with its product from the newly completed state-of-the-art manufacturing plant in Port Harcourt, Rivers State.

The company has the capacity to produce about 2,400 tons of gypsum plaster per day to meet domestic demand and cut down reliance on imports into Nigeria.

Business Post learned that the company is offering the product to distributors at an ex-factory promo price of N8,000 per bag. This is for those who register with the company on or before December 31, 2024.

“The commencement of production at BUA Gypsum Plaster marks a significant milestone in our mission to support Nigeria and West Africa’s infrastructure development.

“With a production capacity of 2,400 tons per day, this facility is poised to serve the housing and construction sectors and go a long way in reducing the reliance on imported gypsum plaster products,” the Chairman of BUA Group, Mr AbdulSamad Rabiu, said.

He noted that the gypsum plaster plant aligns with the organisation’s vision to improve the value chain and enhance capacity in the various industries it operates.

–By Dipo Olowookere

A 0.43 per cent growth recorded by the Nigerian Exchange (NGX) Limited on Wednesday has now moved the platform’s year-to-date (YtD) return to 34.38 per cent.

It has been a roller coaster for the local stock market in 2024, but it has remained strong amid the tough macroeconomic environment caused by inflation and the exchange rate crisis.

Yesterday, Customs Street performed well after almost all the key sectors experienced buying pressure, with only the industrial goods space closing flat.

Business Post reports that the insurance sector appreciated by 3.16 per cent, the banking index gained 0.68 per cent, the energy industry leapt by 0.33 per cent, and the consumer goods counter soared by 0.08 per cent.

At the close of business, the All-Share Index (ASI) was up by 426.52 points to 100,477.46 points from 100,050.94 points and the market capitalisation increased by N258 billion to N60.908 trillion from N60.650 trillion it ended a day earlier.

During the midweek session, a total of 42 equities ended on the gainers’ chart and 18 equities closed in red, representing a positive market breadth index and strong investor sentiment.

MRS Oil surged by 9.99 per cent to N159.70, Learn Africa chalked up 9.97 per cent to N3.53, International Energy Insurance rose by 9.77 per cent to N1.46, Coronation Insurance grew by 9.74 per cent to N1.69, and Livestock Feeds gained 9.73 per cent to sell for N3.72.

On the flip side, Africa Prudential lost 10.00 per cent to settle at N14.40, John Holt declined by 9.96 per cent to N6.51, Guinea Insurance slipped by 8.33 per cent to 66 Kobo, Deap Capital tumbled by 5.26 per cent to N1.08, and Consolidated Hallmark deflated by 4.17 per cent to N2.30.

Yesterday, the market participants traded 389.7 million shares worth N9.2 billion in 9,573 deals versus the 478.1 million shares valued at N22.5 billion transacted in 9,578 deals on Tuesday, implying a decline in the trading volume, value and number of deals by 18.49 per cent, 59.11 per cent and 0.05 per cent, respectively.

Sterling Holdings topped the activity log with 43.6 million stocks valued at N216.7 million, UBA traded 26.2 million equities worth N874.9 million, Fidelity Bank sold 25.7 million shares for N398.4 million, Universal Insurance exchanged 18.5 million stocks worth N6.8 million, and AIICO Insurance transacted 16.2 million equities valued at N21.6 million.

–By Dipo Olowookere

The NASD Over-the-Counter (OTC) Securities Exchange closed in negative territory on Wednesday, December 18 after it gave up 0.68 per cent at the close of trading activities.

The loss was influenced by the decline in the share price of FrieslandCampina Wamco Nigeria Plc by N4.00 to close the day at N40.00 per unit, in contrast to the preceding day’s N44.00 per unit.

Consequently, the NASD Unlisted Security Index (NSI) went down by 20.50 points to settle at 3,003.30 points compared with the previous session’s 3,023.80 points and the market capitalisation of the bourse decreased by N7.03 billion to close at N1.029 trillion versus Tuesday’s closing value of  N1.036 trillion.

Business Post reports that during the midweek trading day, the alternative stock exchange recorded a price gainer and it was Nipco Plc, which improved its value by N4.20 to settle at N136.46 per share compared with the previous day’s N132.30 per share.

Yesterday, the volume of securities traded at the bourse depreciated by 88.9 per cent to 59,624 units from 540,503 units, and the value of shares traded by the market participants shrank by 84.4 per cent to N4.6 million from the N29.4 million achieved a day earlier, while the number of deals increased by 66.7 per cent to 25 deals from 15 deals.

Geo-Fluids Plc remained the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units valued at N3.9 billion, as the second spot was picked by Okitipupa Plc with the sale of 752.2 million units for N7.8 billion, and the third position occupied by Afriland Properties Plc with 297.7 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with a turnover of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.7 million units sold for N5.3 billion.

-By Adedapo Adesanya