The Nation Newspaper

Tag: Oil price

  • Oil price drops as Nigeria’s output rises

    Oil price drops as Nigeria’s output rises

    Oil prices dropped more than three per cent yesterday due to return of Nigerian and Canadian crude output from outages and as traders booked profits at the end of the best quarter in seven years.

    According to Reuters, the market soared more than 25 per cent in the second quarter, as part of an 85 per cent rebound since hitting 12-year lows early this year, as unplanned production cuts from Canada to Nigeria eased the glut that prompted the worst price rout in a generation.

    However, production in Nigeria has risen to about 1.9 million barrels per day (bpd) from 1.6 million, due to repairs and a lack of new major attacks on pipelines in the Delta region, the Nigerian National Petroleum Corporation said.

    Resurgent Nigerian supply will put pressure on prices, Goldman Sachs said, adding that outages caused by Canadian wildfires would virtually end by September.

    OPEC’s oil output rose in June to its highest in recent history, a Reuters’ survey showed, as Nigeria’s output partially recovers from militant attacks and Iran and Gulf members boost supplies.

    Brent futures for August delivery, which expired yesterday, settled down 93 cents, or 1.8 percent, at $49.68 a barrel. The more active Brent contract for September delivery settled at $49.71, down 3.1 percent.

  • Being wary about improvement in oil price

    Being wary about improvement in oil price

    Residences can make do with solar energy if the government is willing to provide the right support

    The world is going to have to continue using fossil fuels, whether they like it or not. Oil and gas will still provide about 60% of the world’s energy demands by 2040, even if countries adopt climate change proposals agreed in Paris.—Rex Tillerson, CEO of ExxonMobil.
    This Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including holding the increase in the global average temperature to well below 2C or 3.6F above pre-industrial levels.—Article 2 of Paris Climate Agreement.
    We have therefore decided to turn the disaster that we inherited into a blessing by diversifying our economy away from the mono-product of oil, leveraging on agriculture, solid minerals as well as culture and tourism among others.—Lai Mohammed, Minister of Information

    Regular readers of this column would remember that three or four years ago, this column carried a four-piece article titled, Petroleum and the Future of Nigeria. Lovers of the easy life created by huge flows of revenue from petroleum wrote to call the author a Cassandra, someone whose ideas about anything or trend analysis should be automatically discountenanced. Now that the price of oil is going up again, it is necessary to warn our political leaders and civil servants who may be victims of short-termism not to do or say anything to suggest dilution of the rhetoric and praxis of diversification that has formed the core of President Buhari’sChange Agenda.

     It is for this reason that I provide the three quotations in italics overleaf. The first one by Tillerson is to encourage those who see petroleum or fossil fuel as synonymous with easy money to remain steadfast in their belief in the concept of oil as money spinner at least until 2040. The second is about the worry of about 134 countries that fossil energy may take life away from our planet if humans do not industrialize in an environmentally responsible manner that can sustain life on our planet. The third by the minister of information is a re-statementof commitment by the Buhari administration to govern Nigeria as if there is no oil in its picture.

    Despite the optimism of Tillerson, the picture of the future of petroleum and other forms of fossil fuel may not be as buoyant as the Tillersons of this world believe. Environmentally responsible leaders of nations are struggling to promote the ascendance of renewable energy and the chances that advances in science and technology can shift attention away from fossil energy are high enough to make serious national leaders more cautious about how they grow their economy. It is instructive that when shale oil emerged a few years ago, the government driven by petroleum under President Jonathan and the PDP belittled development of shale oil by saying that United States of America’s becoming a petroleum exporting country could not adversely affect their sale of petroleum to new customers. Before our very eyes, more petrol than the market could absorbcame to the market,  and the rest is now history. Nigeria’s leaders in the government of change cannot afford to play the Ostrich this time, particularly with the demand for controlling the rise of greenhouse gases and the promotion by advanced countries of renewable energy. We cannot afford to be caught napping again.

    It is reassuring that President Buhari has not wavered in emphasizing the character of Nigeria’s new economy that is to be driven by agriculture and solid minerals. It is also important to accept that what happened to petroleum can also happen to solid minerals later. Hence, the reliance on solid minerals should not be viewed for the long-term as the magic wand to neutralize all of Nigeria’s ills. As for the long-term, emphasis should be on nudging the country in the direction of food security through agriculture and self-reliance in terms of other items consumed by our people should be seen principally through manufacturing. Agriculture in all forms and manufacturing are energy-intensive activities that require constant supply of electricity. The issue of electricity should not be on the second page of the priority lists of the Buhari presidency. No major achievement is likely to be possible in the area of agriculture and solid minerals mining without reliable electricity.

    If our country is to make any impact in the areas being pushed as the core of the federal government’s agenda: agriculture, solid minerals, and tourism, the government has to review its policy on provision of power. It is not surprising that President Buhari had said that the policy on privatization of the power sector will not be reversed. On the basis of the experience of Nigerians with privatization of telecommunication of services in the era of Obasanjo, they are likely to find Buhari’s decision to allow privatization of this crucial sector acceptable. But the way the sector has been handled by its new owners calls for immediate attention from the new administration.

    Apart from the controversy over increase in electricity tariff, the sector has been characterized by underachievement since it has been privatized, to the extent that citizens still refer to electricity suppliers: GENCOS and DISCOS as NEPA, the agency that transformed electricity supply in the country into a trope for inefficiency. As ever, under the new owners of this sector, distributable megawatts have been going up and down from 5,000 to 2,500 and the excuses or reasons have remained the same: no gas to power the turbines, low water in the dams, or too much water in the dams. In addition, even what appears to the average citizen as a simple matter— installation of pre-paid meters in the residential units across the country—has appeared unachievable. Excuses have been about inefficiency of imported pre-paid versus locally produced meters. Now that there is no foreign exchange to import meters, DISCOS should be urged to push for improvement of local pre-paid meters, so as to assure consumers that there is no ulterior motive behind Discos’ inability to supply pre-paid meters.

    It is also encouraging that the minister of power has assured citizens that the government plans to commence soon a special initiative on use of solar energy. This is an area that should receive intense attention from the federal government for several reasons. The solar power technology is advancing phenomenally, to the extent that energy-rich countries such as the United States of America and South Africa have added provision of solar power to the list of their own equivalent ofGencos and Discos. Secondly, we need to be able to leave the inadequate megawatts produced at present to agriculture, mining, manufacturing, and tourism, the sectors that can create jobs for our youth. Residences can make do with solar energy if the government is willing to provide the right support.

    In all the top ten countries in production and use of solar power: Germany, China, Japan, U.S., Spain, Australia, France, Belgium, Italy, UK, and India, the governments provide support for development of solar energy industry and for use of solar power. Such support to users include subsidy and rebates. There is a need to give ourGencos and Discos competition by licensing private solar power company(ies). We started a Center for Solar Energy at Nsukka about 40 years ago, the same time we started a Nuclear energy center at the University of Ife. The governments need to think further now about the need for the country to take advantage of its states with high sun irradiation levels. This effort should not be just to source for cheap solar panels for individuals or approach countries to donate megawatts of solar energy to agencies, but to license solar energy companies for provision of off-grid electricity, to compete with existing fossil fuel energy producersacross the country. Since there are essentially rudimentary energy producers in the country at present, there is no need to worry about big lobby to frustrate a new solar power initiative. Grid electricity companies will be relieved to distribute whatever is available on their system to farmers and manufacturers.

  • Oil hits $50 a barrel

    Oil hits $50 a barrel

    The price of oil has gone above $50 a barrel for the first time in 2016 as supply disruptions and increased global demand continue to fuel a recovery.

    The benchmark Brent crude price hit $50.07 a barrel in Asian trade.

    The rise followed United States data on Thursday showing that oil inventories had fallen, largely due to supply disruptions following fires in Canada, the BBC reports.

    Brent crude has now risen 80 per cent since it hit 13-year lows of below $28 a barrel at the start of the year.

    U.S crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to U.S Department of Energy data.

    Canada is the biggest supplier to the U.S and wildfires in the western provinces have knocked out about a million barrels a day.

    Talks in recent months between OPEC and Russia about freezing oil production had already helped prices recover.

    Short-term disruptions to oil supplies have also lifted the price, as they have offset higher production from Iran and Saudi Arabia.

    As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

    Demand has also been better than expected from major economies such as China, India and Russia.

    Against this improving backdrop, analysts are starting to modestly raise their forecasts.

    Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017.

  • Oil price crash: Mismanagement, corruption backlash hunt economy

    Oil price crash: Mismanagement, corruption backlash hunt economy

    Experts say that if the refineries were working and Nigeria self-sufficient, the spill over effects would have trickled down to other sectors. The belief is that if the country had been able to produce and refine more crude for its domestic needs, it would have been in a position to export refined products and create jobs to add value to the growth of the local economy, particularly in this period of continued drop in prices.

    Feeding fat on the commonwealth

     

    A specter hunts the economy – the specter of unbridled corruption. In the oil and gas industry, where over $32 billion (N6.4 trillion at N200/$1) was allegedly lost to massive corruption that characterised oil sales by the Nigerian National Petroleum Corporation (NNPC) under the last administration, according to an independent investigative analysis by the Natural Resource Governance Institute (NRGI).

    The report revealed that the over $32 billion oil revenue was lost to NNPC’s alleged mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements. The report found that the national oil company’s discretionary spending from domestic crude oil sale revenues skyrocketed, exceeding $6 billion a year for the 2011 to 2013 period (i.e. over $18 billion in three years). It also found no evidence that the NNPC forwarded to the treasury any revenues from sales of crude from Okono oilfield with volumes of over 100 million barrels, valued at $12.3 billion between 2004 and 2014.

    Corroborating the Nigeria Extractive Industries Transparency Initiative (NEITI), Pricewaterhouse Coopers (PwC) and Reconciliation Committee’s assertions about NNPC’s legacy of inefficiency and mismanagement, NRGI submitted that NNPC’s mismanagement of public revenues and its performance failures persisted due to lack of political will by successive governments to reform the corporation.

    Last year, (NEITI) declared that about $25.3 billion of the nation’s oil revenues missing. NEITI’s former Executive Secretary, Hajiya Zainab Ahmed, while briefing Kaduna State Governor, Mallam Nasir El-Rufai, said funds from crude product swap amounting to $866 million was lost from 2009 – 2011 and $8, 243 million in 2012.

    She said the $25.3 billion was stolen within eight years. Hajiya Ahmed handed over a dossier of alleged corrupt practices by the NNPC to El-Rufai, who is one of the four governors appointed to scrutinise the accounts of the NNPC and the Excess Crude Account (ECA) managed by the last administration to unravel N3.8 trillion not remitted to the Federation Account by the NNPC between 2012 and May 2015 as well as $2.1 billion, said to have been deducted from the Excess Crude Account (ECA.)

    The former NEITI boss, who gave the breakdown of how the funds were stolen said that between 2009 – 2012 alone, about 160 million barrels of oil valued at $13.7 billion was stolen. She also said, while subsidy payment from 2005 – 2012 captured that $11.631 billion had been paid to the NNPC, there was no evidence of the money being remitted to the Federation Account.

    Till date, Nigerians are yet to come to terms how more than $12.5 billion oil windfall grew wings. The enormous oil wealth came from the sudden jump in oil prices caused by the First Gulf War in 1990 and 1991. Although, accusing fingers have continued to point at administration of military President Ibrahim Babangida for “mismanaging” the $12.5 billion oil windfall from the Gulf War price jump, nothing has yet come of the investigations launched into the scam.

    Few years ago, the former World Bank President, Mr. Paul Wolfowitz, expressed concerns over the endemic looting of the public treasury by successive leaders.

    He said over $300 billion oil wealth disappeared from the country in the last 40 years. “Nigeria presents a classical example of how people in a resource rich country could wallow in abject poverty,” he said, noting that “about 75 per cent of Nigerians live on less than one dollar per day.”

    Onuegbu said despite the fact that 75 per cent of Nigerians live below the poverty line, more and more people are being pushed into this bracket with increasing cases of unemployment and rising precarious jobs.

    According to him, life and living has increasingly become a grind and deeply frustrating, as all the dimensions of poverty keeps exacerbating daily.

    The labour unionist noted the socio-economic problems underscore the fact that government’s huge budgetary spending, largely from oil, has not translated to a commensurate impact on the lives of ordinary citizens.

    “Since the advent of democracy in 1999, the Federal Government has budgeted and spent over N65t, while state governments and their local government counterparts budgeted around N45 trillion, totaling about N110 trillion. This huge gap between government spending and direct effect on the lives of the citizenry can only be explained by the horrendous systemic corruption that currently holds the nation in its thrall.

    He said that about 40 per cent of the budget is frittered away through corruption and inefficiency.

    “The continued hemorrhaging of our national resources as a result of blow-outs through corruption has undermined the capacity of governments at all levels to deliver on the various promises of democracy to the citizenry,” Onuegbu added.

    But, President Buhari has promised that his administration would look inwards, enforce regulations to stop financial leakages and adopt global best practices in generating more revenue to mitigate the effect of dwindling oil prices on the economy.

    However, the challenge is how he intends to build the trust of Nigerians, whose experiences under previous administrations have been everything but palatable.

    Buhari admitted this much when, apparently reading the minds of Nigerians, he said: “I know many people will say I have heard this before.  Indeed, trust in government, due to the abuse and negligence of the past, is at an all-time low.” How he restores such trust, observers say, will depend largely on how committed his administration is to the diversification agenda, the fight against corruption and the reform of the oil and gas industry.

  • Total refuses to cut jobs, despite oil price crash

    Total refuses to cut jobs, despite oil price crash

    French energy company, Total expects a drop in last year’s results but does not plan to cut jobs as peer British Petroleum has done to weather low oil prices, its Chief Executive, Patrick Pouyanne, said this during an interview with reporters.

    According to Reuters, he said  the group had the financial capacity to weather low oil prices, adding that Total like its peers was being hit by the fall in crude prices and that the company expected its results to drop by 20 per cent.

    A Total spokesman said Pouyanne was referring to the company’s full-year 2015 results, which will be presented on February 11.

    “We are resisting, but we are taking a hit,” he said.

    “We have the financial capacity to withstand the price volatility in crude. We know that in commodities, there are cycles. Yes, this cycle is very violent, down 20 per cent in less than a month, 60 per cent in a year.”

    Asked if Total would cut jobs, Pouyanne said: “No. We are used to these cycles, and jobs cannot be the adjustable variable because I’ll need these workers when the price goes back up, and it will go back up someday. I don’t know when.”

    British energy company BP said last week that it planned to slash five per cent of its global workforce, about 4,000 jobs.

    Pouyanne said Total had decided instead  not  to replace all retiring staff and to hire fewer people.

    Total shares were up 2.1 per cent, boosting France’s blue-chip CAC 40 index and tracking the sector index, which was also up by more than per cent.

  • ‘Oil price rise good for Nigeria’

    ‘Oil price rise good for Nigeria’

    The slight increase in the international price of crude oil from $36.50 per barrel to $38.10 in the last five days is going to be a blessing to Nigeria, if the trend continues to the second quarter of 2016,  a Professor of Energy Economics, Wunmi Iledare, has said.

    Oil prices peaked from $36.50 in December 30, 2015 to $38.10 on Monday, January 4, 2016, on the back of worsening relationship between Iran and Saudi Arabia, a development which has raised concerns about possible supply eruptions.

    According to him, the frosty relationship between Iran and Saudi Arabia, has put a premium on prices of crude, just as the market opened in 2016.

    Iledare, who was formerly with the University of Port Harcourt, Rivers state, said a cut in the supply of crude oil by Iran, is expected to shot up the price of crude globally.

    He said Nigeria, being a minor economy nation since it depends 70 per cent in revenues from oil for sustainance, would benefit if the price of crude continues to improve.

  • ‘Naira devaluation, oil price crash, others take toll on economy’

    ‘Naira devaluation, oil price crash, others take toll on economy’

    For an economy such as Nigeria’s that depends on crude oil for its sustenance, these are bad times. The situation has been worsened by the devaluation of the naira. But hope is not lost as President Muhammadu Buhari has embarked on the process of economic restoration. The Managing Director/ CEO, Neo Media & Marketing, Mr. Ehi Braimah, says the second half of the year holds a better outlook for the economy. He says marketing communications agencies should be innovative to overcome budget cuts during economic slowdowns. ADEDEJI ADEMIGBUJI met him.

    The first half of this year has not been very encouraging for the industry. Factors such as the general elections, oil price drop, among others, are believed to have affected businesses generally. What is the impact on the marketing communication sector?

    Every industry is affected and not just our industry. Look at the devaluation of the country’s currency- the naira, it is a big issue. When your reserve depletes, the external reserve is depleted and you need to devalue your currency. Secondly,the revenue from oil dropped by 50 per cent and that has had a terrible impact on the economy. You know, once your major source of income is from oil practically, your economy revolves around oil income, so if you are losing 50 per cent of your business, it only means that you cannot pretend things are normal. It can no longer be business as usual. Then we also had a crisis- the elections, which slowed down businesses, as people were waiting for the outcome of the elections before knowing what to do. Also, don’t forget that there were all kinds of predictions about Nigeria falling apart and, indeed, there was capital flight too. So taking together all these issues- uncertainty, drop in naira value and revenue from oil in the first six months of this year,  no meaningful business has taken place. We are actually now looking at the second half the year.

    What  are the implications of states owing workers’ salaries ?

    I do not have the information but from what we have read in the papers, we understand that the economy is in a bad shape and that is to be expected knowing how government could no longer pay salaries before the bailout  by President Muhammadu Buhari. So, that can only be expected if you mismanage your resources,your economy. With the income Nigeria has made from oil in the last six years, I am surprised that government could not pay their workers when we all knew that most of the time they devote between 70 and 80 per cent to recurrent expenditure probably next to nothing to capital expenses. The governors owe Nigerians explanations why they could not pay their workers because they collect money from Abuja every month. So, what did they do with all the money? Some of them were launching ambitious projects that were unrealistic like building airports. For me, they just mismanaged their resources. That is why they went bankrupt and could not pay workers and stop blaming it on drop in oil revenue. If you plan for the rainy day, then you will know that because you were making money in boom time it doesn’t mean you will not save for the rainy day. Every business circle experience boom and down time. So, you must also anticipate that one day it will not just be the same story of increased revenue from oil every month. It’s been very tough for us this year and we have also lost some businesses on account of the economy that has refused to pick up since January. We want to believe that the second half of the year things will be a lot better. There were lots of borrowing by the federal and state governments. That is part of the problem that made me asked what they did with all the money. They had money from the excess crude account apart from their monthly allocation. What did they do with all these money running into billions of naira every month? On top of that, they were still borrowing money and floating bonds and taking loans. The other day, I was listening to the chairman of the governor’s forum saying some of that money they borrowed that their tenure is stressed as much as 20 years. So you just borrow for generations unborn to come and pay? It doesn’t make sense. I understand some governor left some money in the treasury in this difficult time such governors were so prudent they had a lot of development in their states and they still left some money behind in the treasury. I think such governors should be congratulated and honoured if you ask me, believe me, because they were very prudent managers of resources.

    So how do you think foreign investors will react to these indicators? Does it portray a very good business confidence in the economy?

    Nigeria, any day, is still a great business destination and a lot of investors outside Nigeria still want to come here but the signals that  received prior to this  have been very discouraging. You know if you take the issues of security, corporate governance, transparency, and others, most investors won’t want to come here. Take the case of Richard Branson for instance. He said he wanted to invest in this economy but he was frustrated out and that he will never come here again. So, there are a lot of other investors who have put in money in this economy and they want to take the money out. Before the elections, there were lot of capital flight and we had stories like people now looking the direction of Ghana, South Africa, Kenya for investments purpose when there were so much of uncertainty  here. I will not blame this people who wanted to take their money out. We believe now that we have a new government and there should be a deliberate attempt to woo investors to come into Nigeria because the country still presents a great opportunity for investment.

    When there is lull in the economy, companies are known to cut down on their marketing communications’ budget. Has that been the case this year?

    That is true. We were also having problem, some of the clients we were working for also had to cut budget or cancel outrightly some of the project they used to do with us because what we do is basically public relations. When the economy is bad, the first place to go to is marketing budget to trim it down. I can assure you that a lot of companies did that this year but that is not to say, most of the companies in the first quarter experienced negative growth. It will always be like that. I want to look at it as a period of temporary setback and the elections were largely a setback. Most people were not sure of the outcome of the election and you cannot plan; you don’t want to stick out your neck but am looking at the second half of the year becoming much more dynamic. I think we should look at the brighter side and I think as we begin to settle down and the politicians are beginning to get their acts together, the economy will bounce back fully.

    The president appears not to be in a haste to appoint ministers. The National Assembly too has its battles. Where does these lead to?

    Well the president has told us that there is so much mess. He needs to clear them and he is not in a hurry to appoint some of government officials. I think yes the momentum is slightly slowing down; I think we should still give him benefits of the doubt. These are still early days. I know Mr. President means well for this country. So, it is too early to say we are so much in a hurry. Nigerians are very impatient people. They want to see the president get to the seat today and appoint ministers tomorrow. Yes, we are in a hurry I agree but at the same time the president has his own style and his methods and we must concede that to him. Let us begin to expect that there is going to be a complete turnaround of the situation in terms of the economy, the opportunities for Nigerians, for investors so that we move from what I will call unacceptable state of affairs. The economy is slowing down, workers are not being paid fully their salaries arrears, nobody knows what is happening, inflation is also going on, cost of borrowing money is also going up, the dollar today is about N226. It is unacceptable because about six month ago we still bought dollar in the black market in this country for about N170. So now we have to pay more and it is likely to go higher so we have a crisis and that is the truth.

    ‘It’s been very tough for us this year and we have also lost some businesses on account of the economy that has refused to pick up since January. We want to believe that the second half of the year things will be a lot better’

    Let us look at the industry generally we have PR, we have advertising, we have media, we have experiential marketing. It is said that out of this sectoral groups under the marketing industry, PR industry is not fully exploiting it’s great opportunities in marketing. How has PR fared in marketing communication?

    Well, I will let you know that the PR industry is growing and the practitioners are also warming up to that challenges that you have just identified. There is a knowledge gap obviously, there is a practice gap and I think we have responded to that by having the Public Relations Consultant Association of Nigeria which is an association of practitioners, consultants, consulting aspects of the practice aspect of PR. We believe that through that forum, we will begin to engage one another; we will develop the potential to build the industry for the practitioners. I can assure you that as I speak to you now, so many organisations locally are beginning to engage PR firms whether from corporate communications or to help them to promote their brands and marketing communication campaign but like I said during the last election period most, of the politicians also work with a lot of the PR people on a consultancy basis in terms of delivering their key messages, helping them to engage with the media and all of that. Most of those things also happened, I believe that with more training, with more engagements, the industry can only grow. PR industry has a lot of potentials like I said we are gradually coming up.

    One of the major challenges the industry is having is statistics. No statistics to ascertain the worth of the industry financially. So what are the challenges towards getting to this direction?

    It is an area we have identified in terms of the PR campaign. We are having different committees working and I want to assure you that the president is actually working around the clock to make sure we do things properly. We actually know the value of that business, the industry in Nigeria in terms of billings even the rating of the agencies we want to know who is doing what and the kind of business that we are doing. So it is a process that is continuous and I believe if we get it right the industry, the practitioner will be better for it.

    So many clients are looking towards experiential marketing.  They say through evaluation, experiential marketing delivers more impact than some other areas of communication. How do you react to this?

    It is not peculiar to Nigeria. I think all over the world, the brands budget on top brands are moving from above-the-line to below-the-line but that is not to say traditional advertising communication platform is no longer or losing its relevant. It is just that you have to move with the times. The trend now is the consumers are beginning to dictate how their product should be given to them. Secondly, they want to jointly own the experience, so our technology is playing a big role in that transition. So, the truth of the matter is we want to engage with consumers, consumers want to experience the brands in all its dimensions. So it is no longer enough to just put your brands on the shelve, the consumers want to be properly engaged to know the full benefits of that brand. Why should I buy your brand instead of buying the other brands? So through that experience, it could be creating events, live events. For example, the consumer becomes connected emotionally with your brand so, that way, the brand gets the patronage from consumers. The tendency now is to look for those channels where you can connect your brand with your consumer and then you create an experience that is a memorable for them to make them to always come back. Advertising is not sufficient. When you run a campaign on television, radio, you are just informing me but if I experience the brand first hand in terms of direct engagement. When the consumer responds then it is like two way traffic. So you have what is called activation platform where the brand and the consumers interact, it is like a emotional space. We are actually now doing what we call emotional marketing where as the functional benefits has been communicated through the normal advertising but the emotional path is through experiential marketing. So I think that trend is what is beginning to gain attraction; even when defining event marketing the simple definition I always give “it is the design and implementation of an event and then you manage the media below-the-line activities so you are actually engaging with the consumers directly whether through the sense of smell, touch, the five senses, so you give an awesome experience and then the consumer feels he is a part of your space now, now the consumer are now becoming a part of the space, now there are no longer there to receive information, they want to be part of your total marketing experience for that brand.

    ‘These days, you don’t just create facts for your brands you create what you now call fanatics and very good way we now do that now is to identify people that will own that experience on behalf of the brand in terms of music influencers, you can use as ambassador to reach your consumers that is also an emerging trend’

    Can you share your views on experiential marketing and the purpose of its conference?

    The experiential marketing summits hold every year in the U.S and this year it was held in San Francisco from May 11 to 13. We had practitioners in the industry from all over the world coming to attend and the idea is to share knowledge, review case studies from different organisations. All of these were shared and the results were very interesting. These days, you don’t just create facts for your brands you create what you now call fanatics and very good way we now do that now is to identify people that will own that experience on behalf of the brand in terms of music influencers, you can use as ambassador to reach your consumers that is also an emerging trend. We are also beginning to do things like that in Nigeria because you engage where the consumers live or work or shop, you take the activities to them in those places, you engage them. It is called channel marketing. Where they shop, you meet them there; where they live, you will meet them there; where they work, you meet them there. So it is an experience through engagement. That way, like I said, there is an emotional connection and I think at the summit, we had a lot of case studies, opportunities to network, opportunity to collaborate, opportunity to have new resources to learn about new trends.

     

  • ‘Falling oil price ‘ll worsen Nigeria’s economic woes’

    ‘Falling oil price ‘ll worsen Nigeria’s economic woes’

    The fall in the international prices of crude oil to $40 per barrel last week would further affect Nigeria that is grappling with paucity of fund due  to the glut in the oil market, former President, Nigerian Chapter, International Association of Energy Economics (IAEE), Prof Adeola Akinisiju has said.

    He said the country would further experience paucity of funds as the prices of crude oil plummet further.

    He said the Federal Government is finding it difficult to curb crude oil theft,pipeline vandalism an other untoward practices that made the country lost several billions of naira.

    He said: ‘’ The oil price has peaked in recent times as it went up to over $50 per barrel. “At that point in time, the government, and operators were praying that the price should rise further to enable the country generate revenue for fiscal project. But this has failed to come to pass, as the prices dropped again,” he said.

  • Oil price as Buhari’s albatross

    SIR: Nigeria has been battling so many macro-economic problems such as low productivity, unemployment (with an army of unemployed graduates estimated at 30%, plus 1.3million jobs lost in Q2 of this year according to recent report by the national bureau of statistics), a general price increase etc. Now the country is facing a daunting challenge of oil price drop. Insecurity too, has fuelled our economic woes. Economic activities in the entire north-east region and by extension, northern Nigeria, have gone to a remarkably drastic low ebb.

    Will President Buhari with his change mantra achieve any meaningful change with the changing petro-economy?

    Optimists will completely agree that multi-sectoral economic plan or diversification will be the saving grace or leeway towards stabilizing the economy. It’s all about touching every facet of the economy. As an economy grows, its production activities and employment shares move from agriculture to industry and services, with the services eventually claiming the vast majority of the country’s employment potential. That is real growth.

    Now that President Muhammadu Buhari has adopted the transformation policy on agriculture, it is heartwarming but countries are moving from being agragrian to industrial.Yet we cannot achieve industrialization without harnessing our agricultural potentials. Outputs from agriculture mostly serve as inputs in our industries, thus the need to develop it.

    Diversification is indispensable to countries’  economic growth in the long term. Nigeria has been heavily dependent on revenues generated from oil, ignoring other key area like agriculture, mining etc. jeopardizing our chances for meaningful and sustainable growth.

    I strongly believe that our economic policy makers under President Buhari have a clear understanding of why diversification of the economy is necessary.

    To address the negative effects of the decline in oil price on our economy, President Buhari must go with Obama’s lexicon of building ‘strong institutions’ by firm commitment, investment in critical infrastructure and a clear cut macro-economic policies. They are key to achieving meaningful economic growth.

     

    • Ukegbu Chieke James,

    Owerri.

     

  • Oil price won’t rise even with reduced quote – OPEC

    Oil price won’t rise even with reduced quote – OPEC

    Organisation for Petroleum Exporting Countries (OPEC) has said that prices for oil would not significantly rise even if the cartel’s daily production quota is reduced by 2 million barrels from the current 30 million.

    OPEC Secretary-General, Abdallah el-Badri, said the organisation did not plan to reduce the quota.

    He made the comments after meeting with Russia’s energy minister in Moscow to discuss the influence of Iran increasing sales of oil following the removal of Western sanctions against that country.

    El-Badri called the removal of such sanctions a great achievement.

    Iran reached an agreement with the international community this month to remove sanctions imposed over concerns that its nuclear programme could be used for military purposes.

    Russia’s economy has drastically suffered from relatively low prices for oil, which have roughly halved since mid-2014.

    Russia’s Energy Minister, Alexander Novak, expressed optimism that oil prices would stabilise in 2016, with demand increasing by 7 to 10 per cent annually until about 2020 and then 15 to 20 per cent until about 2040