India’s Reliance Industries, owner of the world’s biggest refining complex, saw its imports of Nigerian crude oil slump to zero in the first quarter of the year, compared to 9,800 barrels per day in Q1 2019.

India has remained the single largest buyer of Nigerian crude oil in the past few years after the United States slashed its imports from the country on the back of its shale oil production boom.

It said the March imports, at 1.24 million bpd, were 6.1 per cent per cent above the previous month’s.

Reliance shipped in about 43 per cent of its imports from Latin America, slightly lower than about 43.5 per cent a year before, the data showed.

The share of Middle Eastern oil in its overall purchases rose to 43.19 per cent from about 37 per cent a year ago. Imports from the US declined to about 10 per cent from 13 per cent a year ago, the data showed.

The nation’s hydropower plants have seen their output levels tumble in the past few days, causing total power generation to drop below 4,000 megawatts.

Electricity generation from Kainji, Jebba and Shiroro hydropower stations fell to 534MW as of 6am on Monday from 980MW on April 16, data from the Nigerian Electricity System Operator showed.

Kainji, Jebba and Shiroro generated 345MW, 294MW and 341MW as of 6am last Thursday, accounting for 22.85 per cent of total national generation.

But the three plants saw their output levels fall by 277MW, 157MW and 100MW respectively as of 6am on Monday, contributing 14.21 per cent to national generation.

Kainji’s 1G7 unit was said to be out on stator winding failure; 1G8 unit out due to oil leakage on governor runner head.

Similarly, 1G9 unit was out due to burnt 7.5MVA 33/0.415kV & 183.6MVA 16/330kV station service transformer and generator transformer, and 1G10 was shut down due to thrust bearing temperature problem.

Two units at Jebba, 2G2 and 2G4, were said to be out due to low load demand by the distribution companies; 2G5 tripped on unit vibration, and 2G6 was out due to burnt generator winding and automatic voltage regulator.

Generation from Shiroro’s 411G1 and 411G3 units reduced due to low-load demand by the Discos; 411G2 was out due to low-load demand by the Discos, and 411G4 was out on fault.

The nation generates most of its electricity from gas-fired power plants, while output from hydropower plants makes up about 30 per cent of the total generation.

The federal government has in the past two to three days paid over N200bn for power supply in Nigeria,Mele Kyari,  the group managing director, Nigerian National Petroleum Corporation, declared on Wednesday.

Also, the Association of Nigerian Electricity Distributors, the umbrella body for Discos, has said the proposed two-month free electricity for customers announced by power distribution companies recently will cost a total of about N120bn.

Kyari spoke on the N200bn payment at the Abuja headquarters of the federal ministry of power after a meeting with the minister of power, Sale Mamman; managing director, Transmission Company of Nigeria, Usman Mohammed; and managing director, Niger Delta Power Holding Company, Chiedu Ugbo; among others.

The NNPC boss stated that the payment would adequately help in settling the indebtedness of power generation firms to gas companies.

When asked what government was doing to resolve the non-payment for gas by power generation companies, Kyari said, “Actually the federal government has made payments of over N200bn for power in the last two to three days.

“This will go a long way in making sure that those payment issues are resolved. And we are engaging as a government and as a team to make sure that those payment issues are fully settled.”

He noted that gas supply for power generation had been increased by NNPC, adding that issues around power supply process were being resolved.

The international oil benchmark, Brent crude, wobbled on Monday, despite the historic oil production cut deal sealed by the Organisation of Petroleum Exporting Countries and its allies on Sunday.

The OPEC, Russia and other countries agreed on Sunday to cut output by 9.7 million barrels per day in May and June, representing about 10 per cent of global supply.

The deal was expected to prop up prices but Brent crude rose, then fell and rose again on Monday. It was up by $0.47 to $31.95 per barrel as of 6.40 pm Nigerian time.

Saudi Arabia, OPEC’s de facto leader, on Monday set its May official selling prices for crude, selling oil to Asia more cheaply and keeping prices flat for Europe while raising them for the United States.

The US President, Donald Trump, made a case on Monday for doubling the oil supply cuts just approved by OPEC+ to 20 million bpd, saying the move would restore the energy sector faster.

He said on Twitter, “Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 million barrels a day, not the 10 million that is generally being reported.

“If anything near this happens, and the world gets back to business from the Covid-19 disaster, the energy industry will be strong again, far faster than currently anticipated.”

His tweet did not appear to move oil markets, which were waiting for greater clarity on the deal reached on Sunday after Saudi Arabia, under pressure from the US, ended a four-day stalemate with Mexico that threatened to escalate a price war in the middle of the coronavirus crisis, according to S&P Global Platts.

Under the deal announced on Sunday, the 23-country OPEC+ alliance rein in 9.7 million bpd of crude oil production for May and June – down from 10 million bpd originally envisaged, as Mexico was allowed a more generous quota.

Outside of OPEC+, Canada has signalled a willingness to cut and Norway said it would decide about its cut “in the near future”.

African oil producing nations will experience a financial boost following global oil production slash that sees total world production down by 23.7 million barrels per day.

Nigerian minister of state for Petroleum, Timipre Sylva says he expects the oil price to rebound by $15 per barrel within a short term after the Oil Producing and Exporting Countries (OPEC) and its allies in the OPEC+ group cut global oil production by 20 million barrels per day on Sunday.

According to the minister, Nigeria joined its other OPEC+ counterparts to bring into effect the agreement to cut 9.7 million barrels of supply following the alignment of Mexico. The intervention of the United States of America resulted in Mexico agreeing to a cut of 100 KBOPD and to be complemented by an additional 300 KBOPD by US producers.

Initially announced Thursday, the agreement was delayed as Mexico refused their share of production cuts. The original OPEC+ deal would have seen a cut of 10 million barrels of crude per day from an October 2018 baseline, for an initial two-month period. With OPEC+ letting Mexico off the hook, the official OPEC+ cut now stands at 9.7 million barrels, as Mexico agrees to cut 100,000 barrels per day instead of 400,000 barrels per day.

In reality, however, the OPEC+ deal will cut more than the quoted 9.7 million barrels, since current production levels are much higher than the October 2018 baselines used to calculate the production cuts. The deal sees Russia and Saudi Arabia absorbing the brunt of the cuts, each agreeing to cut their production down to 8.5 million barrels per day. Saudi Arabia’s production stood at 12.3 million barrels per day, and Russia was producing 11.29 million barrels of oil per day in March. Both countries, however, used 11 million barrels per day as their baseline in the deal.

“These production adjustments are historic. They are largest in volume and the longest in duration, as they are planned to last for two years. We are witnessing today the triumph of international cooperation and multilateralism which are the core of OPEC values,” said Secretary General of OPEC H.E. Mohammed Barkindo. Barkindo also noted that the OPEC+ deal paves the way for further collaboration with the G20.

In a meeting on Friday, the G20 nations also agreed to take action to stabilize the market. The United States, for example, is set to use the Strategic Petroleum Reserve to store vast quantities of oil. Additionally, the US will see production cuts of at least 2 million barrels as the market responds to a lack of demand. The US has also reportedly offered to take on an additional cut of 300,000 barrels per day on Mexico’s behalf, although the details of how such a deal would play out have not been released.

The OPEC+ group is expected to request the G20 to cut over 3 million barrels per day of production. The G20 energy ministers agreed Friday to create a task force to monitor the situation and formulate strategies. The Texas Railroad Commission, the agency that regulates the state’s oil and gas industry, is also scheduled to meet on Tuesday to discuss regulating formal cuts, though the US has largely maintained that the free market will determine oil production cuts.

US President Donald Trump tweeted his support for the OPEC+ deal on Sunday.

“This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia,” he said.

Finally, in a reported, but not confirmed, side deal, Saudi Arabia, Kuwait and the United Arab Emirates could agree to reduce production by an additional 2 million barrels of oil per day.

NJ Ayuk, Chairman of the African Energy Chamber, lauded the efforts of the OPEC+ deal, as a stable oil market will provide economic relief and save jobs throughout the continent.

“OPEC has hit a home run,” Ayuk said. “OPEC has breathed life and given hope to African nations, oil workers, investors and the African business community. We need to focus on exploration soon again. Now we have the ball; we need to run with it and start the process of bouncing back. We need to defend the African oil industry like a junkyard dog in the face of a hurricane.”

South Sudan, a member of the OPEC+ alliance, also welcomed the deal, said the country’s Minister of Petroleum Hon. Puot Kang Chol.

“South Sudan is East Africa’s only producing country. Our production was over 350,000 barrels per day before the civil war. At the present moment, we are producing about 185,000 barrels per day with a target on attracting more investment into the oilfields to get our nation to 300,000 barrels per day. The current price war and coronavirus has affected our economy,” he said.

“We welcome all efforts to stabilize the oil market and South Sudan will continue to play its role. Our government will continue doing its utmost best in making the oil production and fighting the Coronavirus a priority and we will continue collaborating with all our partners,” he added.

Each nation, aside from Saudi Arabia and Russia, which are both cutting substantially more, is expected to cut 23 percent of production from May to June. Iran, Libya and Venezuela are exempted from the production cuts, and Mexico is only cutting 100,000 barrels per day.

After this initial two-month period, overall production cuts will lower to 8 million barrels per day from July to December and then lower to 6 million barrels per day from January 2021 to April 2022. The OPEC+ group will meet in July to discuss further action, if needed.

With about 40 percent of the world’s population ordered to stay home to stem the spread of COVID-19, demand for oil and gas has decreased by about 30 percent, from over 100 million barrels per day to under 85 million barrels per day, according to the Energy Information Agency.

The International Energy Agency, which called for the G20 meeting of energy ministers on Friday, argued the market conditions were too much for OPEC+ alone to handle.

“The extreme volatility we are seeing in oil markets is detrimental to the global economy at a time when we can least afford it,” said Dr. Fatih Birol, Executive Director of the IEA.

“Today’s oil crisis is a systematic shock that threatens global economic and financial stability. It requires a global answer. That is why the G20 can be an indispensable forum for decisive leadership when it is urgently required,” he added.

Brent crude was averaging $55.70 per barrel in February, but, with an oil price war and the impacts of COVID-19, both Brent and WTI have reached their lowest level in years, with Brent hitting $22.76 per barrel in March, its lowest price since November 2002.

As demand for oil and the price of oil has declined, storage capacity is also reaching its limits. In just a few weeks, analysts predict oil production may be shut in due to a lack of global storage capacity.