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Stocks Decline Before Fed Speakers as Lira Slides, Gas Advances

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WASHINGTON – Stocks fell in Europe and Asia after the Standard & Poor’s 500 Index dropped the most in two months yesterday. Turkey’s lira led emerging-market currencies lower while U.S. natural gas climbed for a third day.

The Stoxx Europe 600 Index slid 0.4 percent at 7:05 a.m. in New York, after closing yesterday at the highest level since May 2008. Japan’s Topix (TPX) index sank 2.3 percent and the yen weakened as the nation’s current-account deficit widened to a record. S&P 500 futures added less than 0.1 percent following the gauge’s 1.3 percent drop yesterday. The lira slid to an all-time low against the dollar. The 10-year Treasury yield rose two basis points to 2.85 percent. Natural gas added 1 percent.

EURO STOCKSFederal Reserve board members Charles Plosser and Richard Fisher are scheduled to speak after Atlanta Fed President Dennis Lockhart yesterday backed reductions in bond buying in the U.S., where retail sales data are due today. The S&P 500 climbed 30 percent last year, the best year since 1997, to close at the highest valuation in four years. The Stoxx 600 trades at 13.8 times its members’ projected earnings, more than the average over the last five years, after advancing 17 percent in 2013.
“The risk in the European market is if profits don’t follow multiple expansion, as that makes the market expensive,” said Nathalie Martin-Pelras, who oversees the equivalent of $1.3 billion as chief investment officer at KBL Richelieu Gestion in Paris. “After 2013’s multiple expansion story, corporate results have to deliver in 2014.”

Support Failed

Every industry gauge in Europe declined as the Stoxx 600 dropped. Celesio AG slid 6.1 percent after McKesson Corp. said it failed to gain support from enough shareholders to enable it to buy the German drug wholesaler. Ashmore Group Plc plunged 11 percent as the asset manager said that clients withdrew a net $3.5 billion from its funds in the three months through December. Jeronimo Martins SGPS SA slipped 2.4 percent after the Portuguese retailer said that sales growth slowed in Poland.

JPMorgan Chase & Co. was little changed in pre-market trading after reporting adjusted earnings per share that beat analysts estimates. JPMorgan and Goldman Sachs Group Inc. are among 29 members of the S&P 500 reporting earnings this week.

The S&P 500 declined yesterday the most since Nov. 7. The gauge traded at 15.4 times estimated earnings, more than their average multiple over the last five years of 14.1, according to data compiled by Bloomberg.

Last week’s payrolls report shouldn’t discourage Fed policy makers from pursuing cuts to asset purchases after they announced the first $10 billion reduction last month, Lockhart, who doesn’t vote on policy in 2014, told reporters yesterday. The economy was on a “solid footing,” he added.

Stimulus Cuts

Plosser, an opponent of bond purchases by the Fed, said this month policy makers shouldn’t try to make up for a permanent loss in potential growth caused by the financial crisis. Fisher argued for a $20 billion reduction in the central bank’s monthly bond purchasing pace instead of the $10 billion announced last month. The regional Fed chiefs and other voting members of the Federal Open Market Committee meet on Jan. 28-29.

A Commerce Department report today will probably show U.S. retail sales rose 0.1 percent last month, after increasing 0.7 percent in November, according to the median of 86 estimates of economists surveyed by Bloomberg.

The MSCI Emerging Markets Index slid 0.5 percent, with benchmark gauges in Russia and Turkey losing at least 1 percent. The lira dropped 0.6 percent to 2.1921 per dollar. It earlier weakened as much as 0.8 percent to 2.1964 after the country’s current-account deficit widened.

Labor Disputes

South Africa’s rand slumped to a five-year low on concern that labor disputes at the world’s three biggest platinum producers will weigh on mining output and dent the nation’s exports. The currency declined as much as 0.7 percent to 10.8952 per dollar, the weakest level since October 2008.

Japan’s currency fell against all of its 16 major counterparts after the current-account shortfall widened more than economists projected in November to a record 592.8 billion yen ($5.7 billion). The yen weakened 0.6 percent to 103.58 per dollar, the biggest decline since Dec. 18, after trading at 102.86 per dollar yesterday. The yen dropped 0.6 percent per euro. The dollar was little changed at $1.3684 per euro.

The Swedish krona strengthened after a report showed consumer prices rose more than economists estimated in December. It added 0.7 percent to 8.8273 per euro.

The cost of insuring corporate bonds against losses rose, with the Markit iTraxx Europe index of credit-default swaps on 125 European investment grade companies increasing 1.5 basis points to 73 basis points, the highest since Dec. 19. The Markit iTraxx Crossover index of contracts on speculative-grade companies rose 4.7 basis points to 288 basis points, the most since Dec. 20.

Stockpiles Forecast

U.S. natural gas climbed 5.5 percent yesterday, the most since April 29, after Citi Futures Perspective forecast a record drop in stockpiles after last week’s cold weather. Inventories probably fell by 303 billion cubic feet in the week ended Jan. 10, Citi Futures Perspective said before Energy Information Administration data on Jan. 16. That would surpass the biggest-ever decline of 285 billion on Dec. 13.

Gold fell 0.4 percent to $1,248.11 an ounce, the first drop in four days, and West Texas Intermediate oil advanced 0.2 percent to $91.94 a barrel.

– BLOOMBERG

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PENGASSAN Urges Strategic Focus on Local Refining Expansion

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The Nigerian authorities have been called upon to focus on strengthening domestic refining capacity.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) made the call in a communiqué issued at the end of the three-day PENGASSAN Energy and Labour Summit (PEALS 2026).

It stressed the need for adequate protection for refineries operating in the country.

The PENGASSAN said Nigeria must reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products by creating an environment that supports domestic refining and other value‑adding activities.

The communiqué, signed by the union President, Festus Osifo, and General Secretary, Jerry Amah, stressed the need to protect refineries, including Dangote Refinery and Waltersmith Refinery.

The association said the expansion would enable Nigeria to retain a greater share of the value generated from its petroleum resources while creating jobs, conserving foreign exchange and stimulating industrial development. PENGASSAN linked the growth to wider opportunities in petrochemicals, gas processing and other downstream activities.

READ ALSO: Umar Cautions Against Irregular Policies in Nigeria’s Oil Industry

The communiqué reads in part: “The summit called for sustained policies and investments to expand Nigeria’s domestic refining capacity and reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products. The need to protect refineries (such as Dangote Refinery, Waltersmith Refinery, etc.) within Nigeria’s jurisdiction was emphasised.

“Nigeria must progressively retain more value from its petroleum resources through domestic refining, petrochemicals, gas processing and other value‑adding activities capable of generating employment, conserving foreign exchange and stimulating industrial growth.

“Ultimately, the strength of Nigeria’s oil and gas industry will not be measured merely by the resources beneath the ground, but by the projects delivered, the value created, the Nigerian capabilities developed, the decent jobs sustained and the prosperity generated for the Nigerian people.”

The association also warned that abrupt policy changes, overlapping mandates, repetitive approvals and conflicting directives increase the cost of doing business and weaken Nigeria’s competitiveness for global energy capital.

The PENGASSAN called for faster regulatory approvals, digitalised processes and clearer timelines, arguing that the effectiveness of regulation should be measured by its impact on investment, production, government revenue, job creation and national value rather than simply by the number of licences or approvals issued.

On gas, the PENGASSAN advocated an integrated approach to developing Nigeria’s more than 215 trillion cubic feet of proven reserves, including investments in processing facilities, pipelines, storage, LNG, LPG and CNG infrastructure. It said gas should be deployed more aggressively for power generation, manufacturing, transportation, fertiliser and petrochemical production.

The association also urged stronger protection of workers’ rights, occupational safety and employment during mergers, acquisitions, divestments and asset transfers, saying sustainable investment requires skilled and fairly treated workers and that increased production must not come at the expense of workers’ lives and wellbeing.

In addition, the PENGASSAN said the next phase of Nigeria’s petroleum industry must focus on execution with measurable targets and clearly assigned responsibilities to ensure policies translate into projects, production, investment and sustainable employment.

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PENGASSAN to Link Up with NUPRC to Unlock 3mmbopd

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Two key stakeholders in Nigeria’s oil and gas industry have resolved to work closed to unlock three million barrels per day (bpd) of crude oil by 2030.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), according to the new President of former, Comrade Bosun Olabiyi-Agoro, would be working closely with each other to attain the objective.

He made the disclosure on Wednesday while on a visit to the NUPRC corporate headquarters.

The Head, Media and Corporate Communications, NUPRC, Eniola Akinkuotu, who made the disclosure in a statement, also credited the PENGASSAN President with declaring that inasmuch as the union is open to negotiations, issues bordering on the rights of workers to freely associate and join the union are non-negotiable.

READ ALSO: Tinubu Banks on NLNG Train 7 to Boost Nigeria’s Gas-led Economy

He made it public that issues surrounding contract staffing will be one of the key issues his administration will address.

“The President of Nigeria has an ambition which he runs through the CCE which is to make sure that by 2030 we are able to produce three million barrels per day. All of us have to work to make that happen. It will be our happiness to make sure that that target is actually attained. We can assure you that we are here to collaborate. We will be very reasonable,” Olabiyi-Agoro assured.

On her part, the Commission Chief Executive, Oritsemeyiwa Eyesan, said the President Bola Tinubu-led Federal Government had been working assiduously to increase production as evidenced by the latest executive order which is targeted at deep offshore investments. She noted that production had risen from a low of 1.1mmbopd a few years ago to an estimated 1.755mmbopd in 2026.

Seeking the support of PENGASSAN to achieve this target, Eyesan, said industrial stability remained critical to hitting higher production targets.

“As you settle into your new role, be assured that the commission will give you 150 per cent cooperation. In addition to the support we will give you, we want to ask that we work very closely to actualise government objectives.

“We want to grow production from our current level to 3 million barrels in 2030. For gas, we are still doing under 8bcf and we want to grow that to 12bcf by 2030. So, let’s make that happen,” she stated.

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Tinubu Banks on NLNG Train 7 to Boost Nigeria’s Gas-led Economy

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As the multi-billion-dollar Nigeria LNG Limited (NLNG) Train 7 Project reaches more than 90 percent completion, President Bola Tinubu has described it as critical to Nigeria’s gas-led economic agenda.

According to Tinubu, the successful delivery of the project would help expand Nigeria’s gas exports, create jobs, deepen local capacity and strengthen investor confidence in the country’s oil and gas sector.

The President spoke at the State House, Abuja, on Thursday when he received an NLNG delegation led by its Managing Director and Chief Executive Officer, Adeleye Falade.

The delegation briefed the President on the progress of Train 7, prospects for further expansion and challenges affecting the company’s operations and contributions to the national economy.

The discussions also covered the pricing and accessibility of liquefied petroleum gas (LPG), trucking along the Bonny-Bodo Road corridor, NLNG’s contribution to public revenue, its investments in the Bonny-Bodo Road and other social-impact projects, and the need for a more enabling business environment.

Tinubu congratulated Falade on his appointment, describing his assumption of office as coming at a defining period for the NLNG and Nigeria’s gas development ambitions.

Tinubu expressed the view that the completion of the Train 7 project must translate the country’s vast gas reserves into jobs, increased exports, industrial growth and long-term economic value.

“I congratulate you, Leye, on your appointment. Train 7 is at the centre of our national gas agenda. Its success matters not only to NLNG, but to Nigeria’s economic future,” the President said.

Tinubu commended the progress recorded on the project, describing Train 7 as a benchmark for project delivery, partnership, Nigerian content development and investor confidence.

He assured the NLNG management that the Federal Government would continue to improve the business environment, provide greater regulatory clarity and remove bottlenecks affecting major oil and gas investments.

“Nigeria is open for business, but it must be business that creates value at home — building capacity, supporting communities, protecting the environment and contributing to national prosperity. NLNG must continue to lead by example,” he added.

Responding, Falade thanked the President for his administration’s support for NLNG and the broader gas sector, assuring him that the company remained committed to the safe and successful completion of Train 7.

“With the project now over 90 percent complete, our immediate priority is to deliver the remaining work safely, efficiently and to the required quality, while preparing the plant for reliable and sustainable operations,” Falade said.

He said the project would increase Nigeria’s LNG production capacity, support export growth, create opportunities for Nigerian workers and businesses, deepen local participation and generate greater long-term value from the country’s gas resources.

Falade also restated NLNG’s commitment to supporting the domestic LPG market and improving access to cleaner cooking fuel for households and businesses.

He, however, called for coordinated action among the Federal Government, regulators and industry operators to increase domestic supply, improve storage and distribution infrastructure, eliminate avoidable costs and create a more transparent and efficient LPG market.

“Improving LPG accessibility is important to Nigeria’s energy transition and to the wellbeing of millions of Nigerian households. NLNG remains committed to supporting the domestic market, but improving affordability requires coordinated action across the entire LPG value chain,” he said.

The NLNG chief also sought the President’s intervention in addressing ease-of-doing-business challenges, particularly the proliferation of taxes, levies, charges and regulatory demands imposed by different tiers and agencies of government.

According to him, multiple and sometimes conflicting fiscal and regulatory obligations raise operating costs, create uncertainty and could discourage existing operations and future investments.

Falade assured the President that NLNG was ready to align more closely with the Federal Government’s development agenda and explore additional areas of partnership.

The meeting ended with a renewed commitment by the Federal Government and NLNG to sustain momentum on Train 7 as the project enters its final phase.

Both sides also agreed to strengthen their partnership to support the project’s successful delivery and NLNG’s broader contribution to Nigeria’s gas development and economic growth.

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