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Europe rides rebound in risk appetite, emerging markets shine

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LONDON – Revived appetite for emerging markets helped Asian stocks hit a near six-month high on Wednesday, driving more modest gains in Europe and other developed markets, where future stimulus looks less clear-cut.

It was an easier start for European bourses after a difficult couple of days during which tensions have escalated in Ukraine and the European Central Bank has tempered expectations of a new asset-buying program.

The pan-regional FTSEurofirst 300 .FTEU3 rose 0.6 percent as the main markets in London .FTSE, Paris .FCHI and Frankfurt .GDAXI helped claw back some of the 1.2 percent the FTSEurofirst has lost so far this week.

In the currency market, the euro and sterling both remained firm as the dollar retook a bit of the ground it has lost against a rallying yen in recent days.

The International Monetary Fund predicted on Tuesday the global recovery would strengthen this year and next as output in richer nations picked up.

But it was emerging markets that got the thumbs-up from investors again on Wednesday.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced almost 1 percent .MIAPJ0000PUS to its highest level since late October, helped by another EM outperformance .MSCIEF, both in stocks and currencies.

Talk that China could be readying new economic support measures has helped investors largely put aside worries about geopolitics and slowing U.S. stimulus that fuelled a turbulent start to the year for emerging assets.

The South Korean won led Asian currency gains on Wednesday as it hit a near six-year high thanks to capital inflows, while the Indonesian rupiah rose as parliamentary elections started. <EMRG/FRX>

“The divergence (in performance) between developed market and emerging market assets and currencies has continued,” analysts at Morgan Stanley wrote in a note to clients.

“A rotation from growth to value assets is being broadly cited as putting major DM equity markets under pressure.”

GREECE IS THE WORD

Core euro zone bonds were under pressure in early European trading.<GVD/EUR>

But periphery debt was back in favor as chatter focused on talk Greece was poised to announce its return to bond markets, just two years after a spectacular default that saw investors lose 70 percent of their cash.

Greece has hired a group of banks to manage the sale of a 2 billion euro five-year bond, Thomson Reuters markets service IFR reported last week, a move sources said would now happen on Thursday.

“The fact that Greece is returning is good news for the periphery in general,” one trader said. The yield on Greek 10-year bonds traded at 5.995 pct, its lowest since prior to its first bailout in 2010.

Nervousness about Ukraine failed to temper the revival of risk appetite. The United States accused Russian agents and special forces on Tuesday of fomenting unrest, saying Moscow could be eyeing military action as it had in Crimea.

The dollar stood at 102.00 yen, off a three-week trough of 101.55 hit on Tuesday and a long way off the 2-1/2 month high of 104.13 against the Japanese currency it touched on Friday.

The British pound’s strong run has also been a focus in currency markets in recent sessions.

It was little changed and buying $1.6744 at 0815 GMT having jumped on Tuesday after strong industrial output data and glowing comments from the IMF had stirred expectations for the Bank of England to raise rates ahead of its peers.

“While the strength of the yen has likely caught many participants wrong-footed and runs counter to the underlying theme favoring carry strategies and risk assets, it may be the pound that is the most surprising,” currency strategists at Brown Brothers Harriman wrote in a note to clients.

SAFETY FIRST

In the commodities markets, gold traded near a two-week high after rising 1 percent on Tuesday thanks to the sharply lower dollar and the renewed tensions in Ukraine.

Spot bullion traded at $1,310.30 an ounce, not far off Tuesday’s session high of $1,314.43. <GOL/>

The events in eastern Ukraine also provided some support for oil by fuelling fears that tensions between Moscow and Western powers may disrupt supply from Russia, one of the world’s top oil exporters.

Brent stood little changed at $107.34 a barrel, holding most of the gains made when it surged 1.7 percent on Tuesday.

– REUTERS

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Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd

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Enhanced adoption of artificial intelligence and other digital technologies to improve operations in Nigeria’s oil and gas industry is taking the centre stage in relevant circles.

The issue came up strongly when the President-elect of the Nigerian Institute of Petroleum and Gas Engineers NIPetGE, Prisca Kanebi, paid a courtesy call at the Nigerian National Petroleum Company Limited (NNPC Ltd), Abuja.

Biztellers reports that the Kanebi led delegation was received by the Group Chief Executive Officer of the NNPC Ltd, Bayo Ojulari, represented by the Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye.

According to a statement made available on Sunday, discussions at the meeting focused on the future of Nigeria’s hydrocarbon industry amid global energy transition concerns, technological changes and sustainability targets.

ALSO READ: NNPC Ltd, IOCs Raise Crude Supply to Local Refineries by 103% in 4 Months

The statement indicated that the NNPC Ltd acknowledged the role of NIPetGE in policy advocacy, technical development and innovation within the sector.

Speaking during the meeting, Kanebi highlighted recommendations from the institute’s recent conference, including the proposed establishment of a national centre for intelligent energy systems to support the deployment of artificial intelligence, the Internet of Things and robotics across the petroleum value chain.

She also commended the Federal Government’s decarbonisation efforts and reiterated the institute’s support for policies aimed at improving sustainability in the industry.

The institute also recommended the creation of a hydrocarbon-linked emissions trading system to allow Nigeria to take part in global carbon markets.

The institute also proposed fiscal incentives to support local manufacturing and service delivery in the oil and gas sector, as well as the expansion of the Energy Transition Plan to include measurable upstream decarbonisation targets backed by tax credits.

Other proposals included increased public-private partnerships in emission control infrastructure, carbon capture projects and hybrid renewable energy initiatives.

Both organisations also stressed the need for stronger collaboration between industry and academic institutions to improve professional capacity and align petroleum engineering practice in Nigeria with international standards.

The institute further disclosed that its bill seeking chartered status had passed second reading and was progressing towards a third hearing at the National Assembly.

It added that NNPC Ltd pledged support for future collaborations with the institute on initiatives aimed at improving efficiency and innovation in the energy sector.

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FHC Orders NUPRC to Comply with PIA

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Local Firms Lead Revival of Idle Oil Wells – SPE

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Nigeria’s indigenous oil and gas companies are reopening dormant wells and ramping up production from assets acquired from international oil companies (IOCs) to boost crude oil output.

The Society of Petroleum Engineers (SPE), Nigeria Council, made the assertion through its Chairman, Francis Nwaochie, on the sideline of the Offshore Technology Conference (OTC) which ended at the weekend in Houston, Texas.
Nwaochie said indigenous operators were already taking advantage of opportunities created by disruptions in the global energy market to increase production from existing assets.

According to him, local firms that recently acquired onshore and shallow water assets from IOCs were aggressively reviving inactive wells and maximizing available infrastructure to raise output levels.

“What we are seeing now is that indigenous companies are reopening wells from the assets they acquired from the IOCs. Some of them have almost doubled production from those existing assets,”.

He explained that the renewed focus on dormant wells and existing facilities had become critical at a time the global oil market was facing supply shortages triggered by geopolitical tensions in the Middle East.

The SPE Nigeria Council Chairman noted that Africa, particularly Nigeria, was well positioned to benefit from the supply gap because of the continent’s relative stability compared to some other oil-producing regions.

“There is a huge opportunity for Africa right now. The focus is gradually shifting to Africa because of the volatile environment in many other producing regions.”

He stated that indigenous operators were leveraging digital technologies, financing opportunities and local expertise to improve production efficiency and optimise existing fields.

He added that stronger implementation of local content policies was also helping to create a more stable operating environment for oil and gas investments.

“Local content is very critical. Once communities and local companies clearly understand their roles and benefits, then you create peace across the industry. Business only thrives in peaceful environments.”

ALSO READ: Nigerian Navy Recovers Large Cache of Illegal Refined Petroleum Products

Nwaochie also stressed the need for Nigeria to move beyond crude oil production and begin developing indigenous technologies for the energy industry.

According to him, SPE Nigeria Council was actively supporting innovation and technology development among young Nigerian engineers and researchers.

He disclosed that the association was engaging the National Universities Commission(NUC) on reforms to engineering curricula in universities to better prepare graduates for the future of the energy industry.

“One of our major focuses in SPE is technology development. We should not only import machines and equipment, we must begin to develop our own technologies locally.”

Nwaochie revealed that SPE was already supporting local innovators working on technologies such as remotely operated underwater vehicles (ROVs), noting that indigenous technology development will strengthen Nigeria’s economy and deepen local participation in the oil and gas sector.

“We may not get everything right immediately but we must start somewhere. That is how countries that dominate the global energy industry built their capacities.”

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